Intel CEO: Bad Companies Are Destroyed by Crises; Great Companies Are Improved by Them (venturebeat.com) 81
Intel CEO Bob Swan cited a quote from former CEO Andy Grove as particularly apt during the pandemic. In a call with analysts, Swan noted that Grove once said, "Bad companies are destroyed by crises; good companies survive them; great companies are improved by them." From a report: Swan made the remarks after reporting what he said were "outstanding" results for both earnings and revenues in the "incredibly challenging" first quarter. But investors were spooked and drove the stock down 5% in after-hours trading, in part because Intel decided not to offer full financial guidance for all of 2020, due to uncertainties in the market. Intel also said its gross profit margins, or the money it makes on the sale of its products, would likely be lower in the second quarter. That is in part because the company is recording higher expenses as it prequalifies the manufacturing of its second generation of 10-nanometer products -- which is considered a normal expense in a process technology transition.
Bullshit (Score:5, Insightful)
Self-serving survivor bias from a company that got lucky because how bad their product was was too complicated for the general public to understand.
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Doesn't matter what the public believes so long as Intel isn't allowed to engage in the same anti-competitive practices it engaged in the last time they were behind.
sic
Wow, sorry but are you naive, or what? Does anyone really still think that anti-competitive upper-class behavior is actually punished? These types of prosecutions are obviously just show pieces for the public. These legal spectacles are clearly nothing more than lucrative power struggles between competing economic interests. Multinational corporations, and nation states, routinely engage in anti-competitive, monopolistic behavior. Just open your eyes and look around, be honest with yourself. If ordinary
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I had the f00f bug in my P5 and Intel gave me a new CPU. Imagine any company doing that today.
That's easy to imagine. That's what "voluntary" product recalls and "voluntary" sometimes-little-publicized manufacturer-paid car repairs under "hidden warranties" are.
We've seen it this month with not-so-small companies returning coronavirus-loans intended for small businesses.
What's almost impossible to imagine is a company doing so truly voluntarily, without the threat of so much outside pressure that they know that if they don't it will be even worse for them.
That pressure could be regulations or the t
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No need to wave your hands about "any company," just compare what Intel did 25 years ago when they had bugs, to what they've done in the past 5 years with their CPU bugs!
f00f could be completely worked around in software, it isn't nearly as bad as what they refuse to replace now.
Re: Bullshit (Score:2)
Re: Bullshit (Score:4, Interesting)
Agreed. I don't see how one can look at a local bar or gym and say "they failed because they were a bad company". No, they failed because there are necessary restrictions in place that make it impossible to operate their business. If there were a crisis that made it impossible to make semiconductor wafers or sell chips, Intel would be in rough shape.
Yes and no (Score:2)
Some people would say that a bar or gym that wasn't prepared to "pivot" to another business model was by definition not "a great company."
As an example of "changing to survive" there is a company in my country that usually makes furniture. Now they are making personal protective equipment. Some people would call this ability to "change to survive" an indicator of a "great company."
Re: Yes and no (Score:5, Interesting)
That's a great example of using flexibility to your advantage. If you are an essential business and are a manufacturer then that is a straightforward proposition. But if you're a services-based company that is non-essential according to the state, like a bar or gym, your options are very limited. I suppose the gym owner could pay its employees to become food delivery people or something, but that's just an entirely different business model, not a pivot.
A great company can build in flexibility and use it during crises, but there's a lot of luck involved in whether the specific flexibility you have is relevant to the crisis at hand. There may be crises for which a gym owner/employees can be especially valuable with a pivot (maybe using fit, strong employees to to help people move furniture out of their homes after a flood?), but it's just luck whether those crises happen.
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Using your example, there are bars where I live that have started doing curbside growler fills, and selling bottles of liquor. Since liquor stores are considered "essential services" the business will survive, although I imagine it's harder on the servers.
I can see cases of gyms doing online "virtual" aerobics classes and such. Yes, that would mean eliminating machines from the routines, but it still could be done.
Even some of the performance venues, (which were the ones I was truly worried about,) have sta
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My spouse has always cut my hair. But until C19, I never cut hers. But last week, I watched a few YouTube videos and then gave her a tapered bob-cut. She was happy with the result and doesn't plan to ever again pay for a haircut.
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Some gyms pivoted to renting equipment. The equipment's just sitting there and the employees can deliver and pick it up, being typically buff and strong. The gym gets some money renting it out, the equipment gets used rather than sitting idle, etc.
Customers love the idea because they get to use good equipment, the equipment doesn't become a clothes
Re:Yes and no (Score:4, Insightful)
Smaller companies might be able to pull it off because they don't have the massive capital investment, but even the examples of a bar or gym are pretty rough. Both have some commercial space to do something, but to put it to use a gym would have to both move and store all of their usual equipment elsewhere. Then they'd have to figure out something for their employees to do that they're capable of, which might be hard for a fitness trainer. Either it's very low skill labor that doesn't require specialty or it's not workable with the current staff. A bar might be able to sell food for curb-side pickup as many restaurants are doing, but most bars aren't known for their food. They too will have a difficult time pivoting.
Furniture production is a lot less niche. Certainly there're very specific production lines, but there's no reason that they can't build something else from the same raw materials. I don't doubt that it still took some savvy to not just recognize the changes in demand, but also how to adjust the company to supply them, but there was still an ability to adapt. The company wasn't committed too far down the path of specialization that it was realistically improbable for them to be able to change and continue to succeed. It's not really any different from life in general where a particular species has become highly adapted to a particular environment and now faces extinction due to changes that are occurring far faster than its ability to evolve past them.
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Some people would say that a bar or gym that wasn't prepared to "pivot" to another business model was by definition not "a great company."
My friend who's a wedding planner pivoted and is now a funeral planner.
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Sometimes that simply isn't feasible, or the timing is really bad.
If I am running a gym, my assets don't really give me a lot of options of pivoting to something relevant with the presumptive need to pivot back when your core competency comes back to being viable. Your employees are specialized in fitness and sure they can do utterly generic work, but there's no competitive advantage to the overwhelming competition of people also able to offer up random people. You don't make a good so there's not anything
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Re: Not Bullshit (Score:5, Interesting)
It is true that luck plays an enormous part on whether a company will survive or not. And also true that the lucky always claim skill. Everyone always think they are skillful, and the losers must suck. It can't be just luck I won, right?
But there are three reasons what he said has a significant amount of truth to it.
1) Bad companies are inflexible. They can not change to meet new conditions and go under. Good companies are flexible and find a way (even if it is moving from making cars to making ventilators) to survive. Perhaps they have to layoff people, but they either find new sources of income or find ways to reduce costs during hard times.
2) Bad companies often die slowly. They eek along until any stress takes them out. Good companies that have time develop emergency resources. It may be large bank accounts, allies in congress to give them a bailout, insurance, or something else.
3) Good companies have good reputations and their customers remember this and support them in times of trouble. Bad companies are the first thing to get cut. I have a favorite restaurant that I order from once a week now, even though I used to order from them once a month.
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Company that is facing a huge crisis in the form of AMD making better and cheaper CPUs says companies are improved by crisis.
He may be right actually, Intel might finally start fixing their bugs and innovating again. In the mean time AMD dominates for everywhere - server, desktop, workstation, mobile - on price and performance.
Sounds right (Score:2)
Good companies have government connections that make sure that compensations and laws go in their favor, bad companies don't.
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Indeed, the companies that survive a crises are often those that get bailouts. In this season of the government picking winners and loser, a "good company" is one with the political throw to be declared "essential". Heck, in my city, the mayor signed an executive order clarifying that anything construction-related was officially "essential". Very good companies, those home builder corporations. Very good indeed for his campaign chest, I'm sure (not that I mind, it is the economic future of the city).
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How did the government pick winners or losers? Everything I've heard about the bailout indicates that the government gave the funds to banks and the banks are the ones determining the winners are losers.
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From what I'm hearing, while the banks did make a few loans, they mostly just said "thanks for the cash, but lending it out would be risky, wouldn't want that".
We so smart (Score:5, Insightful)
This is the corporate equivalent of confusing happenstance with superior ability common in modestly successful people.
Genuine humbleness is increasingly rare the further up the ladder of success you go. Just remember that "but for the grace of insert deity here go I."
Re:We so smart (Score:4, Interesting)
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So true, and if/when Intel next has a bad quarter, the CEO will say "but for me, it would have been so much worse. I'll lay off thousands and give me a raise." CEO's take credit in good times and get a raise, and blame circumstance for bad times and get a raise.
And in the same vein as politicians you should not assume they're buying their own bullshit. Even if they know the market / technology / externalities took them for a roller coaster ride they had little to no control over or they screwed up why would they ever admit to that? It's not about the company, it's about their reputation, position and compensation - people appoint you to CEO and give you millions of dollars because they believe your leadership made the difference. Actually that goes for all of mana
CowboyNeal has grace? (Score:1)
"but for the grace of insert deity here go I."
CowboyNeal [praisbehisnameforeveramen] has grace? Who knew?
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CowboyNeal started Slashdot from Hope College, Michigan. Christian school, premise confirmed.
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He forgot the magic words. Now class, let's all take out our wands and repeat after me:
Ceteris paribus!
Re: We so smart (Score:2)
IT departments have been buying whatever they can get. This douche claiming credit for that after his mismanagement to date would be laughable if he wasn't taking home a massive bonus due to these increased sales.
Oh good (Score:2)
Coronavirus (Score:2)
Same thing with coronavirus, UV light can mutate it and make it much stronger.
Re: Coronavirus (Score:1)
Can != does.
It's about as likely as it turning you into a super hero. Literally.
There's just more of them than of us, and they are smaller so light can penetrate all the way.
Most of the time, it just causes sunburn and cancer. And again, going all the way in them but not in us, killing them.
Also again, there are more of them, so it's more likely for some to survive. Which is why you need more than a Trump amount of UV radiation and oxygen and agitation to actually disinfect with it, and obviouls it won't wo
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UV light can mutate it and make it much stronger.
Does it also make it green and angry?
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Only on the good days.
On the bad days, it becomes a twisted mockery of virus-kind, but is somehow still able to defeat everyone. ... until the hero recovers from his humiliating first bout with it, at which point it is toast.
No longer own Intel stock (Score:1)
AMD is making better chips for less for most of the d86 market. AMD still has vastly superior graphics, a decade after Intel said they we're going to take higher end graphics seriously. Apple is rumored to be moving off x86 for next gen Macs. Apple is using Qualcomm for next iPhones modems
Re: No longer own Intel stock (Score:2)
Someone please remind me what has Intel has done well in the last 5-10 years?
Servers.
Re: No longer own Intel stock (Score:4, Interesting)
They've done well at selling server processors, especially given the flaws in their architecture, but that's not quite the same thing
Re: No longer own Intel stock (Score:1)
If you believe smashing and fixing windows you broke for fun enhances the economy then sure Intel had a big win on servers.
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They've done CPUs pretty well until the last few years when the stalled node shrinks and only minor architecture changes finally caught up to them. The GPUs are easily good enough for everything but serious gaming or professional 3D/CAD and wiped out the market for lower end Nvidia/AMD garbage.
Zen was a huge leap for AMD after the Bulldozer disaster but it's only with Zen2 that they're legitimately better in most cases and Zen 3 that's an actually impressive improvement.
They did miss the boat on phone/table
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Someone please remind me what has Intel has done well in the last 5-10 years?
Making money.
did intel just jynx itself? (Score:1)
Re: did intel just jynx itself? (Score:1)
I think this was the jumping the shark moment: https://youtu.be/Xah84cJwdxE [youtu.be]
Luck (Score:3)
Competence matters, and so does luck
If you run an airliner, a tourist hotel or a bar you're in bad luck.
If you run an airliner you can still hope your connections can get the government to save you but you won't be saving yourself.
Bad companies *destroy* in crises. (Score:1)
I think his definition of good and bad is off.
There are definitely bad companies that profit from crises.
And good ones or innocent ones that get destroyed. If only because when push comes to shove, it is harder to be good without it being at your own expense. While being bad just means you can offload your burdens onto your victims. E.g. onto good companies.
But this whole PR gag is basically just him going "We're so great. Much better than others! ... Aren't we great?". Like a pubescent teenager. Except fol
Good bye (Score:1)
So I guess we'll be saying good bye to Intel...wonder who will get their IP.
Being good improves the odds of survival (Score:2)
Everything else being equal, a well-run organization that can adapt to change is more likely to survive or even thrive in times of crisis.
Great companies can still die because of too much bad luck.
Awful companies can still thrive in a crisis if they get very, very lucky.
Monopoly Ratchet (Score:2)
He's not wrong, "good" and "bad" are subjective. AMD chips are half the price, and no one would be surprised if Intel chips end up being completely pwnable.
He's just an example of a "too big to fail" monopoly. "Good" for you. Ass.
So Intel is doomed? (Score:2)
Because, you know, pushing expensive insecure crap to its customers, lying to them and generally being more intent in ripping them off than providing good value.
Not any more (Score:4, Insightful)
Now when a crisis occurs, the taxpayers are told to suck it up and hand over their money. Because there's never enough socialism to go around when it comes to propping up businesses who blew all the money they received from their tax cut on frivolous things such as executive salaries and bonuses or stock buy backs.
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All depends on how much you've let yourself rely upon the failing corporation, I guess.
I'm sure that if AT&T, Sprint/Tmobile, and Verizon were all to fail simultaneously, or if comcast alone were to announce it were closing its doors, we'd soon regret not shelling out to keep the zombie alive, even as it eats our brains.
Of course, we'd never consider that the failure was our fault for letting the service be so concentrated in one point of failure.
Three things a company can do right now (Score:4, Insightful)
During this crisis there are three things a company can do:
1. Despair that sales have dried up and stare out a window, worrying about the future with a Scotch in your hand
2. Say "Fuck it, we'll worry when this is over", and play video games and binge on "Tiger King"
3. Work at improving products/services/processes and train employees as well as customers
I realize that these are scary times and CEOs are worried about maintaining their companies and government subsidies are not a sure thing in the short, medium or long term but this is a chance to look at your business and see what you can do to come out of this stronger and more attractive to customers.
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3. Work at improving products/services/processes and train employees as well as customers
No, that's something that companies with sufficient cash and resources can do. What precisely do you expect your local restaurants to do?
Restaurants can do a lot (Score:2)
Lots.
Let's see, develop new menu items, look at table layouts to gain efficiencies, create new take out options that make sense for their customers.
My son is a chef and is going through this right now and doing surprisingly well. Along with reworking the menu and providing partially cooked meals (to allow his customers to put out hot, fresh meals to their families). When he has some time on his hands, he's researching robotic food prep (and asking me questions).
3. is always an option and even if nothing c
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Let's see, develop new menu items,
That's great if the menu was inadequate before.
look at table layouts to gain efficiencies,
When you have a rectangular room with 10 tables in it, there's not many axes for modification.
My son is a chef and is going through this right now and doing surprisingly well.
Great so he has the cash to keep things ticking over. As always the best solution to any problem is to be richer than other people.
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Some types of businesses are more exposed to this type of risk. A video conferencing company is in a fundamentally different situation than a a company that runs large entertainment venues.
Intel is in a business that isn't particularly likely to suffer much. United Airlines is in a rather different situation.
If by "great" is meant... (Score:2)
Yes, if by "great" is meant chain restaurants, pulp fiction publishers, big box stores, RIAA, and factory-farming-style childcare "centers", then yes, these high-margin one-size-fits-all globalized businesses are "great".
See that long tail? The one of independent works, diversity of thought, and serving of local interests? Here comes the farmer's wife.
Or big companies buy up their competitors (Score:2)
A rising tide swamps all but the biggest boats.
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*cough* financial crisis *cough* (Score:2)
A great example. So much greatness.
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Except that John Doe and John Doe (jr) are two different people. The old GM and the new GM are pretty much the same company, mostly the same employees, mostly the same assets, same IP, with the same leadership, etc. The old and new GM thing was a legal construct done specifically so that they could get out of various obligations. Now, if the old GM was allowed to fail as it should have happened, and some other company decided to buy up some of the assets and happened to call themselves GM, then I would a
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Hubris much? (Score:2)
Intel sells something that basically everybody needs(not quite so much as they used to, more iPad-primary people out there now, though most of those likely spend the day hammering at web services running on Xeons
Hands in the Govt Pocket (Score:2)
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Intel Inside(r trading) (Score:2)
It's about time Intel went out of business (Score:2)
Intel is truly a dinosaur, incapable of pivoting away from the awful x86 ISA that has failed miserably in the mobile space.
The Self-Attribution Fallacy (Score:2)
https://archive.vn/VCuFO [archive.vn]