Ambiguity & Audacity
Ambiguity is a killer of motivation and innovation. Be audacious.
On January 13th, semiconductor giant Intel - under immense pressure from activist investor Third Point LLC - replaced its finance-focused CEO, Bob Swan, with chip designer and 30-year Intel veteran Patrick Gelsinger, who for the past 8 years has led software maker VMWare.
Why call out the two CEOs' functional focus in the recap? Because it gives us insight into the steady decline of Intel as a global force in the semiconductor space, and what the firm is planning to do in an effort to, hopefully, regain its positioning as a major player in the space.
For the past 24 months, Intel has dramatically underperformed the S&P 500, returning just 24% compared to the index's 110% gain. Furthermore, Intel's arch-rival, AMD, has seen its share price rise some 349% in the same period. It is no surprise then that the sharks began circling the wounded whale.
For those of us in the US, there are national security implications in play as well. The ground that Intel has lost over the past several years has been made up by Taiwan Semiconductor Manufacturing (TSM), who has become a behemoth in the chip manufacturing sector - so much so that Intel is discussing a manufacturing partnership with the Taiwanese organization to close capabilities gaps. So, with the global political turmoil in focus, and China's turbulent relationship with the US-Taiwan alliance, the notion that US firms may not be able to rely on a US-based manufacturer of chips and technology can be seen as unsettling.
Activist investors and Boards replacing CEOs with their own choices is nothing new, and not all that interesting. What is interesting, however, is the chatter around the culture at Intel - and how the firm, by installing Gelsinger, is setting itself up for a major organizational mindset overhaul. The idea? Out with the quants and in with the engineers - at least at the top jobs. In order to regain its position as the dominant semiconductor and chip innovator, Intel wants to bring back a culture of innovation by letting its engineers take the lead.
Ambiguity: The Silent Killer
I've been trying to become fluent in the Chinese language for years. I've tried most methods - YouTube, textbooks, Rosetta Stone, you name it. Lately, I'm trying 15 minutes a day on Duolingo… (read: 15 minutes a week). I'm aware enough to know that this level of engagement isn't going to work, but I fool myself into thinking it'll make some impact.
The issue? A lack of focus. I'd be far better off investing the requisite time and energy in one platform, and then putting in the work to make sure the language sticks.
Strategically, nothing hurts an organization more than a lack of vision and focus. Ambiguity - across messaging, marketing, communications, and expectations - slowly erodes the fabric of a workforce, such that after a long enough time period, an organization suddenly realizes it is nowhere near its initial goal.
Beyond the multiple it gets from having an innovator who draws a cult-like following as its leader, Tesla outperforms all other automobile manufacturers because it out-messages its competition. It is feverishly focused on a singular marketing message: accelerating the world's transition to sustainable energy.
As of this writing, Tesla's market capitalization is $783 billion - equivalent to its next 9 automotive competitors combined (Toyota + Volkswagen + BYD + NIO + Daimler + General Motors + BMW + Ferrari + Hyundai).
For Intel, returning to a focus on innovation and engineering means it can slowly position it’s messaging properly, and reposition its competitors so it can draw out its competitive advantages - of which it has many, all legacy pioneer brands do.
Audacity by Association
People associate. It's human nature. As a society, we think that because an individual has amassed a massive fortune that they then have domain expertise across a host of unrelated areas.
Harry Beckwith writes in Selling the Invisible, "We tend to think, for example, that attractive people are smarter, friendlier, more honest, and more reliable than less attractive people. We associate one positive thing - attractiveness - with many other good things."
I've had plenty of meals in nicely decorated restaurants with great ambiance and convinced myself that the food was better than it was. Quality by association.
The same phenomenon happens in employer branding and human capital, too. We like to assign irrational multiples (see: Tesla) and unrelated attributes to brands and companies by virtue of external cues. Does that company have an indoor arcade room in their office? They must be a great place to work.
Association is a two-sided coin, though. And Intel can tap into the upstanding side of a coin by re-investing in its people, making innovation and engineering the principle values of the organization, and re-establishing its human capital as the strategic advantage it can be. With an engaged and motivated workforce, moonshots become ideas that are reachable.
Intel's value proposition reads: We create world-changing technology that enriches the lives of every person on earth. I'll pose the question of when the last time we, as consumers, felt that Intel was delivering on this promise?
The firm should tap into our tendency to associate - and begin flooding the airwaves with messaging that inspires, partnering with individuals on the leading-edge of innovation (in their own fields), and leveraging its human capital (it's true competitive advantage) to change the tenor around the company going forward.
A Final Thought on Ambiguity
Marketers constantly weigh impact against audacity in messaging. The best marketers tap into one of the four or five fundamental human needs to elicit an emotional response to their products or services. However, audacity in marketing is a tightrope. For every great example of audacious marketing, there is a counter-example of a campaign that fell flat on its face.
More and more it seems impact is a function of the balance between societal anger and fervor. Think of the juxtaposition of support and anger in response to Nike's work with Colin Kaepernick, or the response elicited by Gillette's campaign highlighting toxic masculinity.
There is something to be said about brands and organizations willing to be audacious. In as much as marketing is about publicity, great marketing is capable of another important aspect of the business: warding off prospects that are not a good fit. This applies to clients, future hires, ideas, technologies, and so on.
Audacity does this for an organization. Be audacious.
Until next week,