Apple's CEO Switch: Effort To Remain Independent?

'EVERY company that endures has to, in effect, reinvent itself every generation," Gilbert Amelio told the Monitor in a recent interview.

Now he will get to put that motto to the test as the new boss at Apple Computer. After months of turmoil, marked by growing losses, layoffs, and talk of an impending takeover, the board of troubled Apple Computer moved last week to oust its chief executive officer, Michael Spindler.

The long-time Apple executive was replaced by Dr. Amelio, an Apple board member who resigned his post as CEO of National Semiconductor Corp. to take the new job. The move appears to put to rest, for now, the sale of Apple to another firm. Talks on a possible purchase of the Cupertino, Calif., firm by Sun Microsystems were continuing up through the end of the last week, but the two firms were reportedly still far apart on a price.

Most observers believe Amelio's appointment to both the chairmanship of the board and CEO signals that Apple's directors hope to maintain the firm as an independent company.

"Gil Amelio would not have been interested in running a company that is just a branch of another company," says writer William Simon, co-author with Amelio of a recent book, "Profit from Experience" (Van Nostrand Reinhold). Amelio has been an Apple computer user since the early 1980s - and joined the board of the firm in November 1994. He comes to the helm of Apple with a reputation for taking over troubled firms and transforming them by focusing on long-term strategies that emphasize the company's core strengths. "Gil Amelio is a man whose career has been solving problems of companies in bad shape," says Mr. Simon. "To me it is a great fit."

Trained as a physicist and semiconductor expert, Amelio has some 16 patents to his name, including co-invention of the charge-coupled device used in video cameras. He went from AT&T's Bell Laboratories to Silicon Valley's Fairchild Camera and Instrument Corporation in 1971, where he headed the microprocessor division. He is credited with turning around Rockwell's troubled Communications Systems division, which he ran from 1983-91.

Amelio took over National Semiconductor in 1991 when the chipmaker was on the verge of bankruptcy, bringing it back to profitability. Some critics argue that Amelio's success was not that stunning, given that National's profits still lag behind the industry average and the company has yet to regain its previous pioneer role. Amelio discussed his management philosophy in an interview at his National Semiconductor offices last December. Excerpts follow:

In your book, you emphasize the importance of the relationship with customers. Did National Semiconductor's failure to see the emergence of the microprocessor come from not understanding customer needs?

What was happening was customer needs were changing, and our company did not see that in as timely a way as it needed to.

As companies get larger, do they find it harder to see that next paradigm coming?

Every company that endures has to in effect reinvent itself every generation. Successful companies, go through a period - I call it waves of change. There's this nice smooth period and everybody's happy, and then all of sudden there's this unbelievable chaos and out of that emerges a new order. And good companies can navigate their way through this period of chaos and get back onto the calmer seas following that. Some companies don't survive that transition. They're not able to remake themselves in a way that's relevant.

The success of your industry has been the driving force in the American economy in recent years. Yet many people didn't see this.

Flash back to 1985. Would either you or me have predicted the Internet? No way you could have predicted that. What we knew was there was a trend toward electronic communication. I was at Rockwell making modems. The modem was exploding. My sales were going up 300 percent a year. Wait a second, what's going on. Something interesting is happening here. But I'm not sure we understood it. It took time for all of that to come into perspective.

In this period of rapid change, isn't this process now very compressed?

That's why I spent so much time in this book talking about managing change.... That ... has come out of the high-tech industry, this notion of managing change as the central purpose of management. It's so vividly apparent here.

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