Some of you are asking about my intentions with this blog given my diminished posting rate. And someone posted this comment to my lone January entry:
Excuse me, but why do you blog if you never actually blog? You actually have some interesting insights that others at Intel fail to share, but a monthly posting is about as effective as Paul having someone write his blog entries for him.
That's a fair enough question. I know that I won't keep readers without writing regularly. My intent is to post at least once per week - a goal I am clearly not meeting. It's largely a matter of time. I've been balancing some unexpected life events and some travel for work. I also spend a fair amount of time on these posts, and if don't finish one it could me many days before I can get back to it. Finding uninterrupted blocks of time to finish my posts has been a challenge.
But those are excuses. I'll do my best to write more regularly. I have plenty of topics started, but they don't always develop the way I'd like them to. During the recent lull I started a couple of posts that were intended just to get something out there, but I wasn't comfortable posting just to post.
Thanks for the interest. I'll try to keep up a more regular pace.
7 comments:
For many of us ex-Intel folks, it would be nice to hear more about how Intel is changing, especially since announcing the need for drastic change last year. You would think stockholders would be just as interested. For many years Intel has needed to re-invent itself and has tried a number of times – in all cases, the effort was left half undone. The lack of action caused many of the most talented employees to leave and when action is announced, the result seems to be less than dramatic and certainly very slow in result. It seems like much of the same is happening again. From an outsider’s perspective, this is not the Intel of old where action was king and results were demonstrated in stock price run-up. Stockholders and current employees must be growing a bit restless and impatient with the inability of such a “cutting edge” company to make change. Even HP was able to respond faster than Intel has and it seems those that are responsible for Intel’s success are still seeing the fat paychecks with little stockholder payoff. When are we going to see the resulting jump in stock price associated with a real “growth” company? I predict that we will have to wait much longer because it is clear from the outside that not enough has happened internally to make a significant difference. It won’t be until Intel overhauls its leadership that the payoff will come and we all know the leadership overhaul has not happened.
How is Intel changing? I think the answer to that is it depends on where you are at, how well your middle manager believes in the vision of the higher ups, and how much you are getting squeezed in the cost arena.
I don't believe Intel will ever become a "growth" company like we once saw. I am not a financial analyst so I guess you could say what do I know, but "growing" revenue without growing income hardly makes you a growth company, and the current climate within the company is very, very, very cost-sensitive and without spending money you aren't going to significantly grow revenues and you can only squeeze cost so far to grow income before you start affecting your underlying revenue.
In some areas I think we have seen some improvement in decision-making and identifying one person as the decision maker. In general there are way too many cooks in every kitchen at Intel and that is what slows down the decision making.
I am not sure what "change" people are really looking for - I think the Core 2 Duo product line is very impressive (I am writing this post from a Core 2 Duo 6700 that I got through the Intel Chip loaner program and it is wonderful - I love it). We have as impressive silicon out there today as we have had in many, many years. Our investments in other growth areas like communications, consumer electronics, handhelds, and flash have never been very profitable certainly not anything that had a tremendously positive impact on the bottom line. With those failures where does Intel go I think for now we are making some subtle moves in a few places (Digital Health and WiMax for example), unsure about what to do in others (VIIV), and perhaps trying to read the tea leaves to understand what to do next because what we tried previously didn't succeed.
Before you jump on the current administration for the failures in the communications biz, etc... remember that those business were acquired and failing under the previous administration. And a bad start in an area can doom you in the tech world so cutting and running to an extent isn't a bad idea.
It will be interesting to see how things turn out over the next few years. With Intel's manufacturing breakthroughs and AMD's acquiring of ATI there should be some interesting things coming up as we see what can be done to take advantage of those things to differentiate products from each other and drive demand.
Any comments about the Intel change of giving out Restricted Stocks (RSU) versus the traditional stock options?
Per the question on RSU's. They basically replace likely worthless stock options with a minimal worth replacement. If the stock price ever does grow again, say to $40, RSU's are a very bad deal for employees compared with options. While unlike options the RSU's do have intrinsic value, the potential upside is far less because you have far less of them to begin with. It seems to me that the switch to RSU's was almost an admission that the execs can't get the stock price to move. I've been with the company 8 years and haven't made a dime on the options. One thing to note, sell your RSU's as soon as they vest. If you must have your cash tied up in a single company's stock it should'nt be Intel. You'd get more growth from a bank savings account. Same advice for ESPP shares, sell them and invest elsewhere as soon as you get them. I believe Intel is the worst performing stock in the Dow over the past 5 years. Basically a flatliner.
Stock options were one way to motivate employees and were useful when the stock price was climbing dramatically. It basically overshadowed the punishing but fair environment at Intel in the late 90s. Back then, you could attract and retain talented people as long as stock prices were climbing. With the stock price increases at a standstill, Intel has lost its primary employee retention and motivation tool. Employees have lost faith that the under-market salary can be overcome by the variable portion of pay (stock). Add the somewhat punishing culture (as opposed to a culture where teamwork, cooperation and recognition of individual strengths are rewarded), and you have the ingredients for an underperforming company. If Intel is no longer a growth company from a stock perspective, motivation needs to come from another tool. I would think that subtle changes to Focal and the Eight-Reports-to-a-Manager are not enough to juice the company – Something More Dramatic is Needed!
In the past few years, I've observed that many experienced (and middle aged) hands-on engineers left (some were forced out of) Intel. And Intel just keeps hiring new, young engineers.
It seems that the system fosters this kind of environment, given that Intel prefers engineers to focus on a very narrow area and be good at it. You can be very good at that particular area, but at some point, that area could be falling out of favor, or some young engineer could be not as good as you are, but good enough to replace you at lower cost.
Managers often say that you can branch out to other areas to broaden your expertise. But this is much easier said than done, since branching out into another area often means stepping on other people's toes, and with the system, every engineer (may be unconsciously) is very defensive of his own area(s).
Any comment?
To the poster of the first comment, I'll try to spend some time covering how Intel is changing. It does feel like the change is slow, even from the inside. But Intel has a well established and conservative culture that is resistant to change. It's somewhat ironic that Intel tells us to embrace change, but it took years of work to get the modest changes we saw in focal.
Post a Comment