Serendipity is Stupid!

fortunecockies.jpgA long time ago, a friend gave me a plaque which says: “Serendipity - If you love something, set it free. If it comes back, it’s yours…. bla bla bla…” Excuse my French, but this is probably one of the biggest BS advise I have ever heard. It’s nothing more than an excuse to cop out. Let’s face it, there is a reason why the nicest guys don’t normally get the best girls.

I recently read the book The Hands-off Manager: How to Mentor People and Allow Them to Be Successful authored by Steve Chandler and Duane Black. At first glance, it read a lot like one of those “Zen of Management” kind of books. The book talks about Allowing Success vs. Forcing Success, and about finding an inner vision and strengths of your employees rather than”fixing” them to do it your way. Half way through reading the book, I was wondering to myself: Are they talking about Serendipity? You know how I feel about Serendipity! But wait, isn’t all this stuff I wrote in my blog… Drunken Ducks / Wild Duck philosophies and so on…. Aren’t they the same as Serendipity?

Intel: Luck or Management’s Brilliance?

This reminds me of a debate I recently heard in the blog sphere between Dr. Robert Burgelman and a Stanford alumni, about the success of Intel. Is Intel’s dominance in the market today a result of luck? or was it due to brilliant and relentless leadership of Andy Grove. I actually very recently took an Executive Ed class taught by Dr. Burgelman at Stanford. Dr. Burgelman co-authored the book Strategic Management of Technology and Innovation with Clayton Christensen and Steven Wheelwright. There is an interesting case study in the book about how Intel invented the microprocessor and essentially sold the proprietary rights to a Japanese calculator company for $60,000. At the time, they didn’t realize the strategic potential of a general purpose processor, and they looked at the invention as a way to sell more memory chips which was Intel’s main business. Fortunately for Intel, they came to their senses and realized there was a substantial market for general purpose microprocessors. And even more fortunate, the Japanese company who purchased the rights was in financial trouble at this point and eagerly gave the rights back to Intel in exchange for reduced pricing for the chips. This was the story for the 4004 processor which was introduced in 1971, which evolved into the 8080 in 1974, and ultimately the 8088 which won the IBM PC design in 1981. The rest, of course, is well known history.

So, was it a lucky break for Intel? I guess you could argue that this is a classic case of Serendipity. Intel literally “set it free” (sold the rights) and then it came back to them. I struggled with that thought for a evening. And then the next day in Dr. Burgelman’s class, it dawned on me. There was certainly some luck involved. But it also took a lot of strategic intelligence and leadership, for the Intel management team to RECOGNIZE what they have, and then put a whole string of decisive actions to capitalize on that so called “lucky break”.

Case in point, Intel bought the design rights back in 1971. At the time, the 4004’s performance was under par compared to custom designed chips. Even when they evolved into the 8 bit version (8008), it was largely rejected because it was deemed too slow. A full 7-8 years later, the 16 bit 8086 was introduced and the product still did not meet sales forecast for the first two years. Customers were mostly buying sample quantities. At this point, Intel not only invested in continuously evolving the processor design, it also invested in development aides and programming tools to help customers develop applications for the chips. Finally in 1980, they launched a project code named CRUSH. CRUSH is a campaign that emphasized a system approach. They put together SWAT teams of engineering, application developers and sales people who focuses on generating design wins. Finally, in 1981, they won the design for the IBM PC. So, if you consider all that, was that luck? I don’t think so. From the time they bought the proprietary rights back in 1971 to when they won the IBM PC design, it was a long 10 year journey of hard work and disappointments. In the modern days of short term mentality and hyper expectations, I’d argue that most companies would have cancel such a project in half that time.

Some would argue then that once Intel won the IBM design, that it was easy sailing because of their monopoly status. Well, the monopoly thing is not entirely true neither. IBM’s policy is that they require at least two sources for the chip. In order to win the business, Intel actually had to issue second source licenses to companies like AMD and NEC. They handed technical details of the chip design to their competitors all the way through the 286 era, and it wasn’t until the i386 introduction that they stopped the second source agreement. In the same period, they also faced stiff competition from Motorola’s 68000. They were loosing design wins to Motorola in an alarming rate. Intel launched another campaign similar to CRUSH, called CHECKMATE. The campaign completely turned around the win rate and lined up Intel nicely for the 32 bit era. So again, it wasn’t pure luck neither.

So, back to my original point: Serendipity Is Stupid!! You can be the luckiest person on earth or you could be destined for greatness, but if you do not RECOGNIZE that and then ACT on capitalizing on your luck or fate - that only means you are the most tragic person on earth.

Relating back to my little “Drunken Ducks Theory of Innovation”. I guess the point is: Yes, there are a lot of “accidentalness” in any one’s life or business. And yes, you have to give the Wild Ducks enough freedom to exercise their creative juices in order to see true breakthrough innovations (i.e. Allowing instead of Forcing success). But may be the most important thing of all, is your leadership and your ability to RECOGNIZE the strategic potentials of some of these inventions which often seems so mundane or crazy in the beginning. And Recognizing is of course only half the game. Looking at the Intel’s example, it took steadfast conviction and commitment to Protect and Cultivate a disruptive idea, until it reaches full potential and changes the world.

So, in conclusion: That’s why they pay us the big bucks! :)

I am sure this offends many of my friends who truly believes in Serendipity… Let’s hear it.