Many technology industry executives are surprisingly inept when it comes to planning and executing reorganizations effectively.
One of the most evident signs of dysfunctional executive management is reorg-du-jour (reorganization of the day, for those who didn't take French in high school). Nothing is more disruptive or counterproductive to the effectiveness of an organization than frequent reorganizations.
Not to pick on Yahoo, but the frequency, if not the execution, of its notorious reorgs has almost certainly contributed to its talent exodus and loss of productivity at a time when it can scarcely afford it.
That said, reorganizations go hand-in-hand with changes in corporate and product objectives and strategy that are often implemented to meet an ever-changing competitive landscape. To that extent, they can be critical to business success, if done correctly.
When do reorganizations make sense and when are they frivolous and disruptive? How can they be executed to minimize productivity disruption and worker frustration? Here's an insider's perspective on organizational change in two parts. First we deal with "how," then we deal with "when" and "why." ... Read more
What do you get when you mix Al Gore, global warming, whacky environmentalists, skyrocketing oil prices, lots of venture funding, and irrational exuberance? An alternative-energy bubble.
What, you don't believe that there's an alternative-energy bubble? Then you're just not paying attention. It may not be the biggest bubble in the history of technology--yet. And it may not be ready to burst--yet. But it's a bubble, all right. All the signs are there.
In solar energy alone, hundreds of millions of dollars of venture funds have been poured into the likes of Nanosolar, SoloPower, OptiSolar, HelioVolt, eSolar, SolFocus, Solel, Miasole, GreenVolts, Hydro Green, Infinia, Sopogy, Cyrium, SkyFuel, BrightSource Energy--the list goes on and on.
All the usual suspects are in the game: big-name venture capital firms, investment banks, private-equity firms, energy companies, technology companies, individual investors, a new batch of investment companies focused primarily on energy, and even a hedge fund or two.
There are lots of recognizable names, as well, including Google founders Larry Page and Sergey Brin, Microsoft founder Paul Allen, and Sun Microsystems founder and ex-Kleiner Perkins partner Vinod Khosla.
... Read more
Updated March 22, 2008. Edits explained at the end of the post. - ST
I was reading a news item about the resignation of Mathstar's chief financial officer. I was surprised to see a publicly traded semiconductor company I'd never heard of, so I checked it out.
Turns out that Mathstar is like a number of companies I've come across over the years: they come in under the radar screen and, as such, investors think they've found something special.
Sure, these companies are special, but not in a good way.
(Credit:
Mathstar)
Mathstar markets itself as a development-stage fabless semiconductor company. Its products are called field-programmable object arrays, or FPOAs, and are targeted at high-performance, data-intensive applications like defense, security, medical imaging, and video.
Sounds good, right? ... Read more
How do we value technology companies? Ingenuity and invention, quality of service, brand loyalty, manufacturing muscle, operating efficiency, supply-chain management, price, great place to work. There are lots of metrics.
For those unfamiliar with the wily ways of Wall Street, the stock market has its own way of expressing what it thinks of companies. It's called market capitalization or market cap for short. ... Read more
My in-laws were in town this past weekend, escaping the Wisconsin snowstorms for a few sunny days in Silicon Valley. Hanging out with them was a welcome break from all the usual nonsense we call day-to-day life.
It got me thinking about how infrequently we take a step back from our gadget-filled, workaholic lives to gain some perspective. How often do you ask yourself if you like what you're doing, if you're on the right track, or if you should be doing anything differently?
The same goes for companies. After all, companies are made up of people. Executives and directors are people. How often do they step back and assess the company's technology, products and services, and strategy with respect to the competition? ... Read more
Crises happen. They happen to all companies and to all people. They happen in our personal lives and in our professional lives. By definition, crises bring change, big change. They can change the entire trajectory of your life or your company's future. That's why how we behave in a crisis, how we manage a crisis, is such a big deal.
For example, Yahoo is going through a crisis right now. It's attempting to reinvent itself. Microsoft's bid to buy the company further complicates matters. The way Yahoo's board handles this crisis will determine the fate of the company and its thousands of employees and shareholders. That's a pretty big deal.
One company's crisis can have a ripple effect on others. You might say that Microsoft is attempting to capitalize on Yahoo's crisis. In so doing, the software giant has created its own. Negotiating tens of billions of dollars to acquire a large company and remake its Internet business is definitely crisis material. ... Read more
Yes, I know Yahoo rejected Microsoft's bid of $31 per share. But that's just standard negotiating strategy in the world of mergers and acquisitions.
Sure, Microsoft's offer - a 60% premium over the price of Yahoo's stock at the time - was designed, not only to get Yahoo's board's attention, but to back them into a corner. If no other suitors emerge - as I predicted in a prior post - it's an offer Yahoo's board can't refuse without risking shareholder litigation or revolt.
But that doesn't mean Microsoft didn't leave itself any wiggle room, and Yahoo's board knows that. They also know that this is Microsoft's big chance, perhaps its only chance, to jump to number 2 in internet search and advertising and challenge Google. That means Yahoo has some negotiating power. ... Read more
Note: I wrote this on Thursday before Microsoft's latest bid for Yahoo; it's a follow-up to a post I wrote six months ago. I have two comments on Microsoft's offer: 1) It's aggressive and it's a sweetheart deal for Yahoo's shareholders; I think Yahoo's board will accept it; and 2) nevertheless, the issues I present are the same; it just becomes Microsoft's problem.
It's been seven months or so since Yahoo chief and co-founder Jerry Yang replaced Terry Semel at the helm of the ailing internet giant. At the time, I pondered the obvious question: Can Yang fix Yahoo?
For the record, I thought the board acted rashly in appointing Yang--a relatively inexperienced executive--to perform what would clearly be a challenging turnaround. I didn't think he had the experience to pull it off.
At the time, I thought that Yang--a visionary--wasn't what Yahoo needed. I thought Yahoo's problem was largely failed execution and missed opportunities in search advertising that allowed Google to leapfrog its more mature rival.
At this point, I'm even more convinced that Yang was the wrong choice. But I think the problem is bigger than missed opportunity and failed execution. The company does indeed need a new vision. And it needs a CEO who's capable of articulating and selling that vision down through the ranks and ensuring everybody's goals are aligned.
That's a tall order, but it can be done. Lou Gerstner did it at IBM, and that was no walk in the park. But Jerry Yang is no Lou Gerstner. ... Read more
I don't know how many times I've read a post or an article by some small-minded, self-important journalist advising a public company's board of directors on how to "fix" the company. The most common advice is "sell the company," "fire the CEO," or better still, "fire all the executives."
Even if a company is screwing up, how is a journalist--whose entire management experience consists of looking at his watch to be sure he files a story by 3 p.m.--qualified to dole out management advice? Is mastery of a keyboard sufficient experience to know how to run a company?
... Read moreOnce upon a time there were no iPods, iPhones, Xboxes, Blackberrys, or Tivos. Really, I'm not kidding. There were PCs, though. And they were really expensive. But we didn't have anything else to spend our money on, so that was OK. We paid $2,000 for our PCs and liked it.
Back in those days, there were three microprocessor companies--Intel, AMD, and a little Texas (it's an oxymoron, I know) company named Cyrix. If you don't recognize the name, that's because Intel had such a lock on PC makers back then that Cyrix's processors were sold primarily through the third-party reseller channel.
It's a popular misconception that Cyrix "cloned" Intel's processors. Cyrix's processors were actually all original designs. In fact, Cyrix's manufacturing partners--initially Texas Instruments, later IBM and ST Microelectronics--licensed Cyrix's designs for their own branded processors.
... Read more
