The Hindu Business Line : Characteristics of enduring business

One of `the oldest, largest and most successful global corporate venture programs' is Intel Capital, `the strategic investment arm' of Intel. "Since its founding in 1991, Intel's in-house VC (venture capital) unit has invested more than $64 billion in roughly 1,000 companies across 30 countries," write Hiroaki Yoshihara and Mary Pat McCarthy in Designed to Win, from Tata McGraw-Hill (www.tatamcgrawhill.com) .

"Under the leadership of Arvind Sodhani, president of Intel Capital, the investment team tracks global innovators." Portfolio companies give the parent company something valuable — dexterity. With that, the parent can `tap promising technologies for its own use' or create `separate ecosystems'. BMW's approach to innovation is different; its research centre, known by its German abbreviation FIZ (Forschungs und Innovationszentrum) conducts `joint projects with many universities'.

The book, which is on `strategies for building a thriving global business', speaks of `seven characteristics of enduring businesses.' The first of these is `change from the outside-in'. For instance, to Kunio Nakamura, the president of Matsushita, staying responsive to outside changes is important. How does Nakamura ensure this? "He has structured his company to be flat, and as he puts it, `web-like,' with very strong and continuously enhanced IT." That way, Nakamura finds it possible to work alongside customers around the world, explain the authors.

At times, it is easier for innovation to flourish outside the boundaries of large companies, says the book, citing Clayton Christiansen, author of Disruptive Innovation. A case in point is Flarion Technologies, which Rajiv Laroia and his team formed after leaving Lucent. Laroia's team had come up with `a radically new way to deliver data that was faster and cheaper than Lucent's existing system'. But Lucent was hesitant in adopting the new approach. Why? Because the company had `a significant investment in its then current technologies.' Alas, an example, that is, of being shackled by the sunk cost.

A chapter titled `a simple vision for complex times' talks about how "in IT outsourcing hotbeds like India, the outsourcers themselves are facing unprecedented turnover levels, as high as one-third annually." An apt insight that the book cites is of Richard Bahner, former global human resources director for AT&T.

Bahner says that what management must do really boils down to three things. "Finance: That's yesterday's newspaper. By the time it hits the books, it's too late to do anything about it. Legal: that's today, that's staying straight within the law. But human resource management: that's the future." Bahner explains that employees who can take in a broad scan of information and integrate the same into new products and serves can tremendously leverage `the company's success around the world.'

Read about Dell's `second web revolution' in a chapter on `building value'. As BusinessWeek had written, it was in 1999 that Michael Dell discovered the bulk of procurement and conversion processes in the company to be manual. He sent an email to his supply chain group, asking them: "Why the company that was the hands-down leader in e-commerce sales wasn't `eating their own dog food' and using its technology to speed and refine its procurement processes."

Yoshihara and McCarthy describe how the `Dell advantage' now works: "Dell's core suppliers are required to have a physical plant near Dell's manufacturing facility... They are electronically embedded into one of the most sophisticated procurement webs in the business. When an assembly line runs low on disk drives or other parts, it sends a signal to its supplier."

Fast Company magazine had observed that for suppliers the lead-time is 90 minutes. "It can't be early and it can't be late. When the tractor-trailer arrives (at one of 100 cargo bays circling Dell's plant) it waits. At the moment the new disk drives are needed, a forklift removes the desired quantity from the trailer onto the factor floor." Interestingly, the disk drives are recorded as purchases "only after the forklift crosses a built-in bar code scanner that is embedded into the factory floor a few feet in from the cargo bay."

A book with models that you can emulate.

From a new calculator design

"Never before had the entire CPU of a computer been constructed on a single piece of silicon."

It was in 1968 that Intel or Integrated Electronics was born, when Robert Noyce and Gordon Moore, two of the original founders of Fairchild, started a new company. "Their intention was to exploit the then expanding semiconductor memory market," writes John Uffenbeck in The 80x86 Family: Design, Programming and Interfacing, from Pearson Education (www.pearsoned.co.in) .

As you may remember, Moore was the one behind the famous law named after him. In 1965, when graphing `chip complexity vs time,' he had noticed that the number of integrated components doubled every 18-24 months. "Seeing no reason for this to change, Moore predicted that this geometric growth would continue indefinitely."

One of the first tasks before Intel was to fabricate `a custom set of ICs for a new calculator design' for Busicom, a Japanese calculator company. That was in 1969. "Two engineers, Ted Hoff and Stan Mazor, were assigned to the project and came up with the idea of fabricating a 4-bit CPU on a single chip, supported by separate ROM and RAM chips." What happened then?

Uffenbeck narrates how Fredrico Faggin, a process engineer, took these ideas and converted them into a chip set with four chips, which became known as the 4000 family. "Never before had the entire CPU of a computer been constructed on a single piece of silicon. The trade journals began describing this processor-on-a-chip as a microprocessor."

The richly illustrated book has scores of examples, self-review questions and tests. And the style is simple. For instance, when writing about P6 processors, Uffenbeck begins by explaining that there are three ways to build a faster microprocessor: "(1) increase the number of transistors; (2) increase the clock speed; and (3) increase the number of instructions executed per clock cycle."

The P6 family of microprocessors accomplished all the three. How so? "All of the chips in this generation incorporate separate level one and level two caches in the same package (more than 20 million transistors). With feature sizes as small as 0.18 microns, clock speeds greater than 500 MHz are achieved. Finally, using a totally redesigned central processing unit (CPU) with 12-stage pipeline and three separate processing engines, processors in the P6 family can execute as many as three instructions per single clock cycle."

Essential company is Uffenbeck, when you go exploring the chip space.

Tailpiece

"The only problem in cyber marriage is... "

"Dinner for guests?"

"No, the mirage would end when the two meet for real!"

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