Open Letter to Brian Krzanich

May 16, 2013

Brian Krzanich
Chief Executive Officer
Intel Corporation

Dear Brian,

Congratulations on your new position.

If there is one company that can put its thumb on the scale, it’s Intel. Few companies with the resources have the will to upend conventional wisdom.

Yet Intel is failing in the biggest transformation in technology in recent memory. What is preventing Intel’s success in mobile?

Thomas Kuhn famously described major changes in scientific thinking as paradigm shifts. During a paradigm shift, cracks appear in structures of thought long thought invulnerable, conflict arises, and a new consensus emerges.

Relentless process improvement drove Intel’s success for so long that it became embedded in your thinking. That old paradigm led to Fab 42 and that thinking is preventing you from being successful in mobile.

Cracks in the current paradigm are growing: clock speed has stopped being particularly relevant. Multiple cores are no longer exclusively high end. And the x86 architecture is increasingly more obstruction than opportunity.

A natural response will be to redouble your efforts to make the old way work while simultaneously diversifying to make the old way less relevant. There is an alternative.

How about optimizing around a few large initiatives that challenge accepted thinking? These "new paradigms" could include: finding new opportunities for radical integration (Intel’s founding innovation); evaluating products solely by ops per milliwatt (an interest shared by mobile and datacenters); developing architectures embedding virtualization and remote integration; and making CPU/GPU operations fungible at a device level.

Some combination of these or other new paradigms will put Intel on a course that  substitutes that which is obvious for that which is known.

Decades from now, the environment will change again, and I can imagine someone taking on the mantle of leadership at Intel with the same fortunate opportunity you do; navigating Intel through a paradigm shift.

Regards,

Larry Zulch

Open Letter to Michael Dell

May 10, 2013

Michael Dell
Chairman of the Board, Chief Executive Officer
Dell Inc.

Dear Michael,

There is a way to reinvigorate your PC business.

When mobile and PC markets were distinct, products in each of those markets could be placed somewhere on a line from consumer to enterprise. In todays market, those lines define a plane, with fixed to mobile on one axis and consumption to production on the other.

Until your PC business gets stronger, your efforts anywhere on this new playing field will suffer, and it will be tempting to trot off into data-center land. But don’t, or at least not exclusively. You – and by that I mean you, Michael Dell, not you, Dell, the corporation – can make Dell’s PC business strong again.

Dell and Costco grew dramatically by sharing an attribute that Dell has lost and Costco has not: “effortless value.” If you find something at Costco, the value will be high. Period. Looking around for a better price for that item is a waste of time. “Warehouse theater” doesn’t hurt either; shopping at Costco feels like value.

It used to be that buying a Dell branded product was the same experience as shopping at Costco. Value was effortless. Pick a price, buy the Dell PC at that price, and move on without a backward glance.

However, through a thousand efforts at margin enhancement, sales channel conflict differentiation, and who knows what else, Dell now offers what can only be characterized as a baffling and incomprehensible array of product lines, products, configurations, and segmentations.

There is some correlation to erosions in your margins, in market share lost and customer loyalty dissipated. You can start getting it back by dramatically simplifying the product line. There will be many benefits. Most importantly: fewer products can be better products. Component selection will be less about “different” and more about “best.” The impact of corporate pride on products matters: right now, you have a lot of products over which to peanut butter that pride.

Presentation becomes simpler, too. The analogy for Costco’s “warehouse theater” is a clean, simple, and fast website driven by the customer's intent rather than product marketing’s segmentation. Product promotion becomes more targeted automatically. You’ll start to get back some of the surprising number of sales you’ve lost through your crisis of complexity.

And your legendary supply chain managers must be able to wring some savings out of having only, say, three primary laptop models and three desktops. Apply those savings, and whatever you allocate to price promotions, which should end now, to improving quality, lowering prices, and maintaining margins. In that order.

Just like Nixon going to China, only you make this happen. I'm sure you'll need to get personally involved in the tough decisions, the mandates, and the allocation of resources, whether capital or headcount.

Simplifying the product line and fixing the website is just the beginning, but it is something you can do right now.

I have some thoughts on the post-PC world, how Dell can be successful in mobile, enterprise products, etc. But right now, it is time to kick some PC market ass; all that requires is for you to sail upwind through a gale of internal opposition. I know that isn’t easy, and that you are somewhat preoccupied right now, but I also know you can do it.

Warm regards,

Larry Zulch

Open Letter to Thorsten Heins

May 7, 2013

Thorsten Heins
President and CEO
Blackberry

Dear Thorsten,

As a CEO, you have to believe in your company or you’ll fail, and who could disagree that the knob attached to your belief in BlackBerry goes to 11? But even if that belief is fully warranted, the best you can hope for is ending up in third place.

You could be first place in a market that matters, and do so without a radical change in direction. What it takes is a focus on the others manage my smartphone market.

The enterprise part of this market BlackBerry understands better than anyone. You have experience, credibility, and perhaps most importantly, an understanding that corporate IT departments are your customers, not the end user.

Think of how this could play for consumers. Rather than an IT department, a phone could be managed by a parent, adult child, small business, tech-savvy friend, or even oneself with a remote interface. “Phone management services” would spring up. (Wouldn’t supporting those services beat convincing crappy-app developers to make BlackBerry their fourth platform?)

Third party management would make powerful new capabilities practical. Policy driven management, such as time-of-day texting for 12-year-olds. The ability to configure the home screen for an elderly parent with only phone, email, Facebook, and 411. iOS and Android apps to securely manage BlackBerry smartphones.

I could go on, but I think you can see it. It would drive new lines of phones. Various levels of complexity for different sized businesses. Even management APIs to automate processes and drive new capabilities.

nly BlackBerry is perfectly set up to develop this consumer focused management capability, if only for architectural reasons.

The implications for your marketing are clear, too. Once you have a defensible value prop, you can focus on it, which would be a relief.

Of course you won’t neglect enterprises, any more than you’ll neglect those who hate to type on glass. (I’m shocked that there are no credible Android offerings with keyboards, and expect that to change. But while it is true, put the pedal down!)

Clearly, changing to this course will only work if you do it with conviction, with the belief knob turned up to 11. I can’t wait to see the new BlackBerry future unfold.

Best regards,

Larry Zulch