October 04, 2004

Innovation: Great Stuff from Grove

Andy Grove on practical strategy
We were sitting around feeling sorry for ourselves. I asked Gordon something: What if the board fired us? (Laughs) The board wasn't going to fire us because the board didn't fire founders in those days. But theoretically, you could think about it. We lost $200 million on $1 billion in sales in all those years and had no strategy to make it better. If the board fired us and brought in a new CEO, what would he do?

Gordon said that he would get us out of memory -- without pausing. I stared at him and said: Why don't we go out the revolving door and come back as if we were the new CEO and do it ourselves? Literally, this conversation took place in exactly that way. And we were of the character to do that.

But it was almost unthinkable. You pretend to be a dispassionate person. But we kind of founded a company to build semiconductor memory. And all the previous -- almost 20 -- years of the company's existence revolved around memory. It was not just a thought exercise, it was a third of the company. Something like eight plants got shut down, almost 8,000 people laid off. Eight out of 20-something [plants]. It was a big restructuring.

Q: What lessons of management and innovation are there?
A: As for people management, I think living in a constructive and open culture in which people can speak their minds is crucial to getting to the right answer to things. But the debate has to stop at one point, and everyone has to accept the position and support it, whether or not they advocated for it. The shorthand inside Intel is "disagree and commit." It's O.K. to disagree. You don't have to be a sycophant, but you have to argue, get your best choice, and support it. Very simple concepts, very hard to live by.

Strategically, the most important learning that I have summed up in the years of teaching and studying our strategies, other people's strategies, is: Strategy is what you do, not what you say. You want to find out what some company is doing, look at what they do and infer it from this. Forget their strategic talk.

Innovation Attack

US News, Time, and Business Week all have cover articles dedicated to innovation and technology. I will post "mylights" I read through them. BW's is by far the most pervasive.

Innovation: The Darwin Factor

Open with Darwin
Penicillin, Teflon, Post-it Notes -- they sprang from such accidents as moldy Petri dishes, a failed coolant, and a mediocre glue. It's no wonder so many executives throw up their hands. "Our approach has always been very simple, which is to try not to manage innovation," shrugs Silicon Valley venture capitalist Michael Moritz, a partner with Sequoia Capital. "We prefer to just let the market manage it."

Yet even in the Darwinian chaos of Silicon Valley,
...and Close with Darwin
Therein lies a fundamental constant of innovation: Nothing stays constant. Contending with innovation's disruptive influence requires what Amazon's Bezos calls a "culture of divine discontent" in which everyone itches to improve things. "Most people, unleashed, are innovators," he says. "We're this great species of tool-using animal who likes to make our world better." The companies that can unleash that particular animal instinct are the ones that will thrive.

Innovation: Best Poetry So Far

Muhammed Ali meets Innovation Management
To hard-headed business people, innovation often seems as predictable as a rainbow and as manageable as a butterfly.

Innovation: Mining the White Space with Core

Confirmed Suspicion
The most successful startups may be those with one foot firmly planted in info tech and the other in emerging technologies.
I've thought for a few years that marrying complementary technologies together and/or adaptive technology transfer is fertile ground...so do they.

Innovation: After the Gold Rush

Only Executives and Senior Engineers can afford to live in the "innovation hotbed"
The cost of living in the Valley is now so prohibitive that cash-strapped startups can't afford to hire many people here at the salaries they need. The median price of a single-family home has shot up 240% over the last nine years, to $640,000. The result: Only 21% of the people who live in Silicon Valley now earn the median income necessary to buy a house, down from 36% in 1995, according to Leslie Appleton-Young, chief economist at the California Association of Realtors. That's one reason why the Valley is expected to see just 1% to 2% growth in employment for the next several years, according to Economy.com.

and basic engineering (they need to explain that more) start offshore...

Innovation: Money Quote so Far

Here's the US Secret:
And as the pace of innovation increases, America benefits by having the immense amount of capital and the entrepreneurial culture needed to win the race to market
and culture doesn't get taught in school or magically occur in India or China.

Innovation: Obligatory Non-Sequitur

Obligatory Non-Sequitur
In today's superfast world, yesterday's "big thing" becomes a commodity and moves to lower-cost offshore factories, says Stanford University physicist Burton Richter, a Nobel laureate: "So now, if we don't fund the physical sciences, where will the Next Big Thing come from? We don't generate new ideas like we used to." That's why Richter is spearheading an effort to increase federal support for basic research in the physical sciences.

So big things become commodities because a commodity is something that is made in an offshore factory so we don't know where the next big things will come from but we need more government investment to get more big things that can quickly be made in offshore factories to become a commodities which are bad.
So we need more government money to make more bad things...got it?

Innovation: Smith, Hayek & Schumpeter Doing Grave Rolls

What does he mean by nurturing?
And even if an innovation boom occurs globally, the U.S. could still not get the full benefit. "What we have is special and needs to be nurtured and enhanced," says Amgen's Sharer.

Innovation: More Money, More Cool Stuff

Global growth of R&D as % of GDP is up by 31%
In the industrial countries, non-defense private and government spending on R&D has risen from 1.6% of gross domestic product in 1981 to 2.1% in 2002, the last year for which data are available.

October 03, 2004

But was it Free Range Chicken?

When reporters add things that are just plain silly
On Thursday, as news was leaking out that Russia was likely to ratify the Kyoto global warming treaty, a group of U.S. business executives was discussing climate policy as they lunched on chicken and avocado sandwiches in Washington's St. Regis hotel"


I have this new fantasy where reporters are not allowed to use any modifying words or phrases. The can only write with Subjects, Verbs, and Objects.