Managed service providers have been a leading force in a technology industry that has been moving from capex to opex, from hardware sales to services, from commodity sales to value-added services. And there are plenty in the tech industry who have noticed and want to get in on the services business, too. For instance, look at Best Buy (NYSE: BBY)’s acquisition of mindSHIFT, Dell (NASDAQ:DELL)’s purchase of Quest Software or HP (NYSE:HPQ)’s buy of EDS. But it’s harder for big companies with entrenched identities and cultures to make sweeping changes.
This week Intel CEO Paul Otellini made a surprise announcement that he planned to retire next May at the age of 62, three years ahead of the traditional CEO retirement age at Intel. The retirement comes at a critical point for Intel. There’s no successor lined up as has been the case in previous retirements. And Intel will face some seismic shifts in the years ahead -- falling demand for the PCs that drove its business as smart phones, tablets and other mobile devices take over as the devices of choice; competition from other companies such as ARM for the processor technology that runs these new devices; and physical limitations to the continuation of Moore’s Law (the business model behind the company’s success). Otellini’s successor must be able to clearly identify Intel's opportunities, focus the company to execute in those areas and then lead it into the future. No small task.
WWANCEOD (What would a new CEO do?)My favorite scene in the book Only The Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company (written by Intel forefather Andy Grove) is the one when Grove and then-CEO Gordon Moore (of Moore’s Law) find their new company Intel in a crisis moment. Their core product, the one that had formed their identity, was losing money. That core business was manufacturing memory chips (not processors). And they were in the midst of an economic recession. Grove asked Moore: “If we got kicked out and the board brought in a new CEO, what do you think he would do?”
Moore replied: “He would get us out of memories.”
“Why shouldn’t you and I walk out of the door, come back and do it ourselves?” asked Grove.
A new pathThat was a moment of clarity about the company's best path. And it was the beginning of Intel’s historic transformation to focus on processors instead of memories. It required taking the focus off the company’s perceived identity and culture and looking at the big picture of what was actually working.
That’s a great occasional exercise for any company or person or organization. What is working? How can we build on that? What isn’t working? Can we let go of that?