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Saturday, 16 October 2010

A New Intel Brand: Do Wholesale Changes Foretell a Better Day at Intel?


I've always considered Intel to be one of the world's best-managed technology brands. Last year, Interbrand ranked Intel as the fifth most valuable brand in the world. And it consistently stays in the top ten because management works hard to make sure the brand remains relevant in the fast-moving semiconductor market.

Of late, Intel has garnered a lot of press regarding the sweeping changes management intends to make in the company's brand and product line. In many ways, these changes will send the world's largest chipmaker into uncharted territory. Some analysts are saying that Intel's new direction will necessitate creating a new brand. However, at its core, I believe Intel will very much remain the same company, mainly because the deeply established core values that drive the Intel brand are alive and well and working exactly as designed.

Under founder Andy Grove and successor CEO Craig Barrett, Intel thrived by concentrating on the microprocessors that power personal computers. They invested billions of dollars in plants that could crank out millions of processors, and in the process they helped give life to the age of the personal computer with ever-faster, more powerful chips. Occasionally, Grove and Barrett ventured into areas beyond microprocessors and personal computers. But from the outside, those tentative forays looked more like cautious experiments than full commitments to new markets. For the most part, Intel stuck to its very narrow focus, and in doing proceeded to bury the competition.

A New Direction

New CEO Paul Otellini appears to be steering Intel in a very different direction. Instead of remaining focused on PCs, he's pushing the company to play a key technological role in a half-dozen fields, including consumer electronics, wireless communications and health care. And rather than continuing to focus solely on microprocessors, he wants Intel to create a variety of chips and software and then meld them together into what he calls "platforms."

With Grove and Barrett at the helm, Intel first provided customers with full sets of technology ingredients, such as microprocessors, chipsets, communications chips and base software capabilities. Under Otellini, Intel will develop complete technology platforms based on Intel ingredients, an evolution best evidenced with the introduction of IntelĂ’ Centrino(TM) mobile technology. Even the "Intel Inside" logo will disappear, to be replaced by an updated Intel logo with a swirl around it to signify movement. And for the first time since the early 1990s, the company will add a tagline: "Leap ahead."

At first glance, all of this looks like a sharp departure from the company Grove and Barrett built. However, upon closer examination, these moves turn out to be very "Grovesk" at their core.

In December 2005, Grove's photo appeared on the cover of Fortune magazine, accompanying an article entitled "How to Become a Great Leader." Fortune stated that Grove, 69, has never lost track of the truth -- that Intel has always been one wrong move away from disaster and that a closed mind is the trap door to the abyss. During his tenure as CEO, Grove made numerous "bet-the-farm moves" could have killed the company but ended up propelling it forward. For example, his decision to get out of the now commodity memory chip business and focus solely on microprocessors. Or the decision to stick with Intel's mainstay chip technology, CISC, rather than pursue the new, more glamorous, RISC technology. Or the decision to focus on microprocessors for PCs and invest billions of dollars in plants to manufacture them.

While it appeared that Intel was doing most of the adapting, it was really Grove himself who underwent the most radical change. Forcing himself to constantly adapt to a succession of new realities, he left a trail of discarded assumptions in his wake. Grove attacked every problem the same way, by setting aside everything he knew. Fast-forward to the present, and it looks to me like Otellini and team are doing the exact same thing in the exact same way that Grove taught them.

The Old Values Remain

In its January 9, 2005 edition, BusinessWeek ran a cover story entitled, "Intel Inside Out: How It's Shaking Off the Andy Grove Era." I don't think so.

From my perspective, the legacy of Grove is very much alive and well at Intel. If fact, the article states that when asked about the sweeping changes at Intel, Grove replied in the following manner: "I want to say," he boomed, "that this program strikes me as one of the best manifestations incorporating Intel values of risk-taking, discipline and results orientation I have ever seen here. I, for one, fully support it."

What a leader! Grove understood that the sweeping changes at Intel were not an indictment of his and Barrett's leadership. Rather, he recognized that times had changed and that Intel needs to -- again -- change with them.

Perhaps Grove's greatest legacy is the strength with which he built in the values that drive Intel's brand. If the new management team remains true to those values, and I believe they will, Intel will continue to make the right moves in a market where change is not only constant but is accelerating all the time.








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Rod Whitson serves Townsend as President and Chief Brand Strategist. Townsend is expert at helping organizations with innovative products and services develop differentiated, compelling value propositions. Townsend is the largest integrated marketing agency in Southern California. Rod has personally led recent branding engagements with Intel, BAE Systems, Merck, DowPharma, Marsh & McLennan, and the University of California system. He has also worked with a host of successful and not so successful early stage technology and life sciences companies. Since Townsend?s founding in 1993, it has helped clients create market valuation in excess of $80 billion.

Visit Rod's blog, Branding the Complex

? 2006 Rod Whitson - All Rights Reserved Worldwide


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