Monday, April 30, 2007

Catching up...

A few comments have come in on the last couple of posts that I wanted to address here rather than replying with additional comments. Someone wrote:

I think we're all hoping that the old growth rate and stock price will come back.

imo, it's just not going to happen for a couple of reasons. Intel now has a market cap of $126B and is in about the top 30 worldwide. There isn't a lot of headroom there. GE is #3 in market cap with $380B, but they are tremendously diversified relative to Intel. Microsoft is number #4 with $295B, but they don't have to pay for fabs. Fabs cost a lot of money, and they depreciate relatively quickly. Another reason is Intel's stock price during the .com boom was simply unreasonable for a manufacturing company. The market does what it does, but the stock price is at a more reasonable p/e ratio now than it was in 2000. I'd love to see stock back up to $30+ as well. It's going to take a lot more revenue to get it there.

There were some good comments about focal from the In the news II post. I encourage you to read those few comments if you haven't done so. They reflect the diversity of options about focal. One commenter said:

Focal pushes employees to do what will look good at focal, not what's good for the company.

There's no doubt that's true. But I'm not sure it's significantly different at other companies. People always tend to do what's best for them, whether it's sucking up to the boss, or spinning their work to look better than it is, or lying, cheating, and stealing to get ahead. Some people do these things at Intel, just like they do everywhere else.

I'll admit to being very conflicted about the focal process. As an employee, and especially as a manager, I find it an unpleasant experience to go through. Some dislike it less than I do, but I don't know anyone who looks forward to it. The idea of focal is (I think) to put some process and objectivity around an inherently subjective process. It's by no means perfect, and it can be painful, but overall I think it tends to work. It yields results that generally puts the higher performing people at the top, and the lower performing people at the bottom. Generally. Every time I've taking people through focal I've going into it worried about the outcome, and I come out feeling like it was relatively fair.

I really struggle with the idea of forced distributions. I believe this is done largely because most managers don't deal with poor performers. I see this every day. Too often people get swept into a bad category because of a forced distribution. But conversely, far too many poor performers would never be identified if managers weren't forced to do so.

One year I ended up representing three different groups in focal by myself. I don't remember the circumstances, but two other managers were not there to take their people through the process. Most of the employees were in rank groups where I was the only manager representing them. My boss made me prepare work sheets and take them through the process. The two of us sat in a room for 4 hours discussing each person, with her asking hard questions about the deliverables, and my rankings and ratings. And I had to hit a distribution.

The point is that I wasn't able to go off and just do whatever I wanted to with those people. Going through the process made me think about the people differently than I would have otherwise, and it made me identify the (relatively) slower performers. It was unpleasant, but I got to a good result. My philosophy about focal is that it needs to be improved, and the forced distributions need to be reconsidered. I think of it as similar to the system of government in the U.S: It seems broken, inefficient, tedious, and stupid some of the time. But overall it seems to work, and I'm not sure I could replace it with anything that would work better.

11 comments:

Anonymous said...

I think you missed the points about focal. Most companies recognize teamwork and the achievement of the overall goals for the good of the company. Intel has virtually no recognition of great teamwork and focal is solely focused on individuals claiming individual credit for things that almost certainly required the work of many.

BTW you seem to have posted the most recent post 4 times. Maybe need more coffee before blogging at 5am :)

Intel IT Guy said...

Indeed that entry was posted four times. I will try to get more coffee before posting.

You make an excellent point about team work, and I didn't address this in my post. Doing so here would make my comment unbearably long, and this probably needs to be another post. But for now I'll ask how we could solve the R&R problem? Could Intel just stop doing focal and evaluate people based on team contributions?

Anonymous said...

Focal has left such a bad taste in almost everyone’s mouth that that alone should be enough to motivate change in a progressive company. The fact of the matter is the system was built for a Growth company many many years ago when the company was much smaller and full of entrepreneurs battling it out to show who was the best and brightest. The company was small enough that everyone could also see who was contributing the most. Today, the company is full of career-minded corporate folk that don’t behave the same way. The system should adapt for the new reality. How are Fortune’s Best Places to Work handling performance? No change simply reflects no creativity.

Anonymous said...

One way to encourage teamwork would be do give more money or a shifted distribution to groups that are meeting goals and performing well as a whole. That way if you are a good worker among super-stars you don't get penalized.

Anonymous said...

So, what could be done instead of focal? Read Chapter 9, Performance Without Appraisal, of Peter Scholtes "The Leader's Handbook" and simply do that.

Now let's look at the company's lack of growth as an indicator of how well focal works. The first two lines of the book, "Double Digit Growth" are: "Which has grown faster since 1997: Intel or inflation? If you picked Intel, you lose."

To grow, requires new products that create market and buzz and that simply isn't happening. If focal creates a strong company, then why no growth?

And finally, focal is not applied equally top to bottom, Richard Taylor in a recent vidcast said something like 'the company rarely hits the numbers at the top' (paraphrase). If focal works so well, wouldn't the top be the best place to apply it consistently?

ex-intel dude said...

The performance appraisal system has to make sense to those that use the tool in order for it to work well. Team-based performance tools are best wielded by leaders with an innate understanding of people and how people inter-relate. Some scientist or technical people may be talented in this skill but most probably are not and Intel is led by technologists for the most part. Try to hand them a tool that they don’t understand and you probably end up with a bigger mess than it is worth. The only way to make Intel a great place to work is to replace the technologists with people leaders. We all know that focal does not reward the people leaders and, therefore, you don’t have many in the upper echelon, so don’t expect to see performance management to change any time soon. Good luck!

Anonymous said...

The comments I have read about Focals being conducive to anti-teamwork is definately true. I have never seen such back-stabbing and under-handed actions from my colleagues at Intel versus other companies I have worked for. Sure this also happens at other companies, but unfortunately, the Intel Focals mentality promotes and rewards such behavior.

Intel IT Guy said...

Some excellent points made here about focal. There is little doubt that focal is not applied consistently across the grade range. An argument could be made that only the best move into the higher grade ranges, so applying a forced distribution there would be counterproductive. Another argument could be made that Intel protects those in leadership positions regardless of performance. When is the last time you heard of a director or VP being demoted for poor performance?

Also agree that Intel leaders generally don't have the best people management or leadership skills. HR has made some progress in getting feedback on manager performance, but it's still a small bolt-on addition to the evaluation process.

Anonymous said...

You seem to have gone the same way as the Unofficial Intel Blog. Dead Blog? Were you hunted down and destroyed by powers greater than all of us?

Intel IT Guy said...

I'm still here. Some work travel, vacation, and other things conspired to keep me from posting. Will get back at it in a day or two.

Anonymous said...

Anybody know why people cannot blog, or at least comment on blogs, anonymously within the internal Circuit blog site? The internal blog contents are already reviewed before any postings anyway. I believe this will encourage greater participation.