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Hard nose business advice for President Bush

By D. G. Martin
Posted Monday, January 2, 2006

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Chapel Hill, NC - “Okay, we’ve got ourselves into more than we bargained for. It’s draining our resources and keeping us from realizing our potential in other areas. So, what do we do now?”

Could these be President Bush’s New Year’s ponderings?

Probably not.

But, according to the December 12 issue Fortune magazine, good business leaders ask this kind of question when they find themselves in a business “hole.”

Andy Grove was the legendary leader of Intel, the successful computer chip maker. But back in the mid 1980’s Intel was about to be on the ropes. The computer memory chip, its “core business,” had become a commodity. Intel had drawn a worldwide group of excellent competitors. From annual profits of $198 million in 1984, Intel’s profits slipped to $ 2 million in 1985.

At Intel, Grove was then second in command to Gordon Moore. (Moore is known as the creator of Moore’s Law, which says that the number of transistors that can be put on a single computer chip doubles every two years or 18 months).

Richard Tedlow, author of an upcoming book “The Life and Times of Andy Grove,” writes in Fortune, “By all odds, Intel should have failed. It should have been destroyed by the same brutal international competition that has killed apparel companies, tire companies, and television companies….”

According to Tedlow, Grove asked Moore, “If we got kicked out and the board brought in a new CEO, what do you think he would do?”

Moore said, “He would get us out of memories.”

Moore and Grove had a strong emotional attachment to these “memories” that had made the company great. But Moore was suggesting that under fresh leadership Intel would abandon the memory chip product line

Grove remembers, “I stared at him, numb, then said, ‘Why shouldn’t you and I walk out the door, come back, and do it ourselves?’”

They did. The adjustments were painful, but Intel’s shifted from memory chips to the kind of “brainpower” chips that are at the heart of most computers. The “Intel Inside” franchise would not have happened if Moore and Grove had not “walked out the door” and come back with a willingness to abandon the product line that was the core of their earlier business success.

Fortune magazine quotes famed business “guru” Peter Drucker on this point. “The problem is to get rid of yesterday’s successes that have outlived their potential.”

What if President Bush did “walk out the door” and come back and look at our situation in Iraq as if he were “the new CEO?” What could he do? What kind decision would he make if he had fresh thinkers like Moore and Grove by his side?

He might get some help from another legend in the high tech world, UNC-Chapel Hill professor Fred Brooks. (His “Brooks Law” states, “Adding people to a late software project makes it later.”)

In Fortune, Brooks outlines the options that face a company when it cannot meet a promised release date for an important software product.

According to Brooks, the company must stop thinking it can magically meet the earlier schedule by pouring more people and resources into the project. It should grit its teeth and choose among three unpleasant options: (1) letting the deadline slip—adjusting it conservatively, since each backward adjustment results in the loss of more credibility, or (2) “lightening the ship” by scaling down realistically and modifying the objectives to fit what can be accomplished in the allotted time, or (3) phasing the release of the product by completing and releasing a key component on time, and then developing and releasing “improvements” over a longer period of time.

We cannot know exactly what would happen if our president were able to “walk out the door” in this New Year’s season, and come back in surrounded by people like Andy Groove, Gordon Moore, Peter Drucker, and Fred Brooks. But I bet they would push him to take a fresh, objective look at his policies in Iraq and choose from the kind of painful options that Fred Brooks gives for projects that are not going according to the original hopes and plans.


[i]D.G. Martin is host of UNC-TV’s North Carolina Bookwatch, which airs on Sundays at 5:00 p.m. This week’s (January 8) guest is Timothy Tyson, author of “Blood Done Sign My Name,” a book about a racial murder in Oxford, North Carolina, and the turmoil that followed. The book has been selected for the UNC-Chapel Hill summer reading program and community reading programs in Wake County, Wilmington and Rocky Mount.

Upcoming NC Bookwatch programs, all at 5pm, Sundays on UNC-TV:
Jan 15 Timothy Tyson Blood Done Sign My Name
Jan 22 Moreton Neal Remembering Bill Neal
Jan 29 Quinn Dalton Bulletproof Girl
Feb 5 Henry Petroski Pushing the Limits
Feb 12 Bill Morris Saltwater Cowboys[/i]

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