Intel CEO Says Changing Corporate Culture Is Key to Coping With New Challenges
Lai Shasha
DATE:  Oct 15 2019
/ SOURCE:  yicai

(Yicai Global) Oct. 14 -- Intel Corp, the world's second-largest chipmaker, is feeling the heat as the world of computing expands to include fifth-generation wireless telecoms, artificial intelligence and autopilot systems. The firm's chief executive talked to Yicai Global about reviving the 51-year-old company through a transformation of its corporate culture.

In a market where one firm has more than a 90 percent market share, your customers have little choice, said Bob Swan. But if you have just 25 percent of the market, you have to engage with your customers in a much deeper way, he added. And that is what Intel is trying to do.

Corporate cultural transformation comes first. The former chief financial officer wants Intel to focus less on internal competition and more on the external race. He has designed a 'cultural framework' for the company to advance its internal transformation to 'run faster, jump higher and dare to dream.'

Since coming into office nine months ago, Swan has spent much of his time in talks with customers. Whenever Intel holds a meeting about products or delivery times, he always puts an empty chair labeled 'client' to remind himself of what the customer thinks and if they would be satisfied with the decisions made at the meeting. This is an example of Intel's cultural transformation.

A Data-Centric Evolution

Yicai Global: What is your company strategy? How has it changed?

Bob Swan:Strategy is not an event, it's a process. We're always evolving strategically. But at the core we haven't changed a whole lot. Our ambitions are to transform the company from a personal computer-centric company to a data-centric company, to a firm that builds the technologies that power the world. Those are the ambitions that we are going after.

To do this we need to evolve from a company that designed and built computer processing units for PCs and then servers, to designing and building artificial intelligence-based accelerator chips, or XPUs, for all these different computing devices. It's no longer just the PC and a server. The car you drive increasingly resembles a computer. The retail stores that consumers go to increasingly look like computers. The cities that we live in look more and more like computers. Factories that build products increasingly look like computers. So we are taking our core CPU competencies and taking them to where we see computing happening, which is not just on the desktop or in our hand, but in all the different things that surround us.

YG:With so many things to do, how do you spend your time? Is most of your time spent developing corporate culture or meeting customers?

Swan:Our company has four key constituents. The first constituent is our customers. Second is our investors. The third, and certainly not the least, is our employees. And last, we have communities.

These are our four major constituents. And that's how I try to spend my time: delighting customers, educating shareholders, inspiring employees and ensuring that we're taking our responsibilities as a large employer to give back to the communities in which we operate.

Transforming Corporate Culture

YG:In our last interview five months ago, you said that the biggest challenge for you was to fully unleash the potential of your workforce. Why do you focus so much on developing corporate culture and the workforce?

Swan:First it starts with our ambitions. We have very big ambitions about the role that we can play in bringing technology to our customers. In order to do that, we start with sand and we want to end with technologies that power the world. In between those two things are 110,000 employees. How do we take these incredibly talented employees and go from sand to technologies that power the world? At the heart of it, like most companies, is the makeup of the people. How can we inspire people by educating them on what we are trying to accomplish, the products that we need to build and why? In so many ways, we need to get out of the way and let them perform to their fullest potential.

YG:I heard that you have laid out a cultural framework. Can you tell us about it?

Swan:The framework that we use is simple. It has five components. First, we need to be obsessed about the needs of our customer. Second, we must be aware of what's going on around us, such that we as one company, one Intel, work together to solve the problems of our customer. The third, we call being fearless. Fearless means that as a company with big ambitions we need to take more risks.

The fourth component of our framework is called truth and transparency. Information flows rapidly through the company. Both good news and bad news flows every which way. We must be well informed about the decisions we make. And the fifth component is diversity and inclusion, which are the key ingredients of everything that we do. How do we, as a company, surround ourselves with the right talent and people and give them the tools they need to perform at their fullest ability as a member of the Intel family?

That's our framework. And this is from a company that had 90 percent market share and then overnight said, "No, it's 25 percent." By definition, the opportunities to play a bigger role in our customers' success are greater. By definition, we have to deal with more competition. By definition, we have to take more risks and we need to move faster.

As our ambitions get larger, the role we want to play with our customers expands. This forces us to evolve from a certain work culture to one that listens better to our customers, works more efficiently as one team and is fearless in everything we do. There is truth and transparency in the way we work, and diversity and inclusion to get the most out of our 110,000 people, so that we can convert sand into the technologies that power the world.

That's what our cultural transformation is all about.

Tough Competition

YG:What major challenge is Intel facing? You have rising pressure from other chip makers such as Advanced Medical Devices, Nvidia, Xilinx. You said you have total solutions but also need to allocate resources. How do you coordinate CPU with other processing units?

Swan:We're going to launch a graphics processing unit at the end of next year. We have a very strong position with graphics integrated with CPU. In the future, we're also going to have a discrete graphics unit, which is something that our customers have asked us for. In that world, there's real competition, but we feel confident that we have the intellectual capacity inside our four walls to develop these products and establish leading positions in the market. And our competition is going to fight us every step of the way. We're okay with that. It'll make us better.

The challenge for us is to continue to accelerate the rate of innovation to protect and extend the role that we play in our customers' success. In doing that, we're always going to have competitors, ecosystems that we tap into and that we compete against, to ensure that we're innovating faster and faster in the areas that we think are going to provide the biggest opportunities for us. Competition is the nature of the game and it's not new, it's been around for a while. The real change is our ambitions are bigger.

YG:What about competition from your customers? More and more customers are trying to make their own chips, like Amazon, Google, Alibaba. What do you think of this phenomenon?

Swan:I think it's natural, considering the rate of innovation that's happened in the semiconductor industry. In Silicon Valley in particular, there's so much demand for data. Everybody wants new and different ways to create data, consume it, make it relevant and do something with it.

The fact that other people want to do it says that we're on the right track. And we have to, we can't stand still. If we stand still, they will do it on their own. If we listen to them, incorporate their thinking into our innovations, and deliver great products that solve their needs, everything else will take care of itself.

Continued Input into China

YG:What's your China strategy?

Swan:Our China strategy isn't dramatically different. How do we build the technologies that serve the needs of our customers so that we can play a bigger role in their success? That strategy transcends borders. That's what we're primarily focused on.

In terms of execution of our strategy, memory is a growing part of our business. We do all our production here in Dalian. So how do we continue to get more capacity and throughput out of our Dalian plant to serve the needs of our customers around the globe?

Our strategy is very consistent across the globe. How we execute it in different markets depends on the presence that we have there, such as our customers, employees and our manufacturing footprint. After 34 years, China is a very important market for us, and we continue to invest to play a bigger role in our customers' success.

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Keywords:   Bob Swan,CEO,Intel