Succeeding in Global Complex, Fast Changing Environements

Transcription

1 Taormina, October 21st 2016 Succeeding in Global Complex, Fast Changing Environements Andrea Cuomo, EVP STMicroelectronics

2 Microprocessor transistor count

3 Average Transistor Cost ($) 3

4 The U.S Semiconductor Industry spends more on R&D as a percent of sales than any other U.S. Industry 4

5 Investment in Capital Expenditures and R&D per Employee is very high - it has increased at a rate of about 16% per year over the past 20 years 5

6 Semiconductor companies ranking: after the storms 1987/1994/2004/2011 Global semiconductor companies ranking NEC 2 TOSHIBA 3 HITACHI 4 MOTOROLA 5 TEXAS INSTRUMENTS 6 FUJITSU 7 PHILIPS 8 NATIONAL SEMICONDUCTORS 9 MITSUBISHI 10 INTEL 11 MATSUSHITA 12 AMD 13 SANYO 14 SGS-THOMSON (*) 15 AT&T Global semiconductor companies ranking INTEL 2 NEC 3 TOSHIBA 4 MOTOROLA 5 HITACHI 6 TEXAS INSTRUMENTS 7 SAMSUNG 8 FUJITSU 9 MITSUBISHI 10 PHILIPS 11 MATSUSHITA 12 SGS-THOMSON 13 IBM 14 SANYO 15 SHARP Global semiconductor Companies ranking INTEL 2 SAMSUNG 3 TEXAS INSTRUMENTS 4 INFINEON 5 RENESAS 6 STMICROELECTRONICS 7 TOSHIBA 8 NEC 9 PHILIPS 10 FREESCALE 11 AMD/SPANSION 12 SONY 13 MATSUSHITA 14 MICRON 15 HYNIX Global semiconductor companies ranking Sources: Gartner / isuppli (*) : In June 1987, SGS-Thomson was formed from the merger of the Italian company SGS Microelettronica (Società Generale Semiconduttori) and the semiconductor arm of the French company, Thomson. Market Share % 1 INTEL 15,9% 2 SAMSUNG 9.3% 3 TEXAS INSTRUMENTS 4.5% 4 TOSHIBA 4.3% 5 RENESAS 3.6% 6 QUALCOMM 3.2% 7 STMICROELECTRONICS 3.1% 8 HYNIX 2.8% 9 MICRON 2.3% 10 BROADCOM 2.3% 11 AMD 2.1% 12 INFINEON 1.7% 13 SONY 1.6% 14 FRESSCALE 1.4% 15 ELPIDA 1.2%

7 The starting point of an atypical startup 7 SGS Breakeven Huge debt THOMSON Semi Huge loss No debt Huge loss Huge debt Ranked #15 In the wrong place I would never invest 1$ in a dead Company, (Italian industry leader, 1988) actually TI offered 1$ for ST in 1991

8 Two stories Bordeaux Wine Climate Soil Great fertilizers Top class vines Proven process Silicon Valley Semiconductors Regulatory environment Stanford and Berkeley VCs & Financial support Brightest students Proven process What about being in Greenland? or in Italy and France?

9 In a broader context: A Great Strength in a Critical Business Proposition 9 Resource limitations Significant Technical knowledge and entrepreneurship Limited local learning opportunities Source: Yves Doz, INSEAD

10 How did we get change our fate? changing business model by doing what the others did not want to do (or sometimes just imagine they could do) with hard work following a great leader with serendipity... and a few early intuitions

11 Business changes s Faster and more competitive market environment driving corporations to focus on core business, outsourcing entire business units. Pressure on asset management discouraging non-core high capital intensive activities such as semiconductor manufacturing. Growing costs of silicon fabs forcing vertical integrated companies to focus on the open market or close down captive operations. Integration densities reducing the number of components, therefore of semiconductor suppliers. Trend towards growing system content on ICs and first vision of systems-on-chip requiring closer cooperation between OEMs and S/C manufacturers. Mixed technologies moving system design problems from customers to semiconductor suppliers.

12 Innovative business models: Strategic Alliances 12 Access Networking Security Video Storage Automotive Imaging

13 Knowledge map Print Heads 13 Business Management Phoenix, California R&D, Manufacturing, Coord., Oregon Manufacturing: Ireland Coordination: Geneva (CH) Divisional Management: Agrate, (I) R&D, Manufacturing, Top Mgmt: California Engineering: Carrolton, Texas Manufacturing: Singapore Manufacturing: San Diego, CA Carrolton, Texas = ST = Partner (HP IPG) Silicon Technology and Design Castelletto (I) Manufacturing: Singapore Source: Yves Doz, INSEAD

14 Knowledge map DSC Sensor technology & development Edimbourgh, Scotland, UK Engineering and Design skills in fast microprocessors: Bristol, U.K. Lead customer in mobile phone: Helsinki, Finland Customer, San Diego, CA Process Technology R&D in BICMOS (mixed) and CMOS (digital) : Grenoble, France Mobile Phone Seed Team: Phoenix,AZ Division Mgmt: Grenoble, France Coordination and strategic capability: Agrate (Italy)/Geneva Architecture and sensing San Diego, CA Design of packaging, testing and final assembly (Back End) capability: Casablanca, Morocco Lead Customers R&D and Engineering: Japan Algorithm & System Development Catania, Italy Cambridge, May 17th 2012

15 Behind the process: a global world Security Networking Consumer Wireless Storage Automotive Computer Science

16 Learning from the world: Competing in the global knowledge economy 16 Building linkages with dispersed pockets of knowledge, worldwide Deepening and broadening the local knowledge base Learning from the world Source: Yves Doz, INSEAD

17 New knowledge transfer mechanisms Acquisitions: small engineering Mobile Phone team (Phoenix, AZ), CMOS sensor Company (VVL, Edinburgh). Finding technology in startups (image stitching). Leveraging existing customer relations: DSC, Mobile Phone. Locating seed teams around the world (US, Japan etc). Developing an integrated supply chain. Internal multidivisional approach and information/business sharing between Business Units. Still learning

18 In a broader context: Competitive Leadership 18 Overcoming Resource limitations Building coalitions & managing co-operative relationships Strategic Alliances Unleashing interdependent entrepreneurship Tapping into global learning opportunities Learning from the World Transcending the home base Reversing knowledge flows Orchestrating knowledge melding & diffusion Fostering entrepreneurial process Achieving strategic integration Leveraging across applications Mixed Technologies Source: Yves Doz, INSEAD

19 Two business models 19 Factor-driven competitive advantage Metanational Corporation government strategy structure rivalry Joint Design center Lead Customers R&D and Engineering Engineering and Design skills Engineering and Design skills Coordination and strategic capability Process Technology factor conditions demand conditions Competence on R/W technology: Joint Design Process Technology related & supporting industries Engineering and Design Capability/ Customer application Design of packaging, testing and final assembly Customers Manufacturing source: m. porter, 1990 Source: Y. Doz, J. Santos, P. Williamson, 2001

20 M6 in Catania 20 50k sqmts factory High automation 300 direct h/c, 1000 total 400M investment 6M+ panels produced in 4 years Japanese technology, Italian Engineering

21 Speed: the Macropicture 21 In the rich part of the Western World the market is dominated by induced needs and largely financed by debt. Innovation in Marketing and Finance is the engine to artificially create needs and fuel the economy. Product lifecycles are shrinking all the time.. In Emerging Economies consumption is either a status symbol or a way to obtain a Western style of life, but goods have to be offered at a locally affordable price. Innovation again plays the central role. New markets emerge: e-vouchers in Africa And the picture is blurred: China has more millionaires than any other Country, while poverty in the US is increasing Continuous Innovation is the engine of growth

22 From strategy to implementation: The Innovation/Execution process 22 Architecting architecting creativity leadership Magnets Mobilizing finding gold Executing execution efficiency management Operations Engineering organizing effectiveness entrepreneurship time to market TQRDC = focus = driver = behavioural style = mantra Source: Insead, STMicroelectronics, Hewlett-Packard, 2004

23 The art of managing innovation 23 Balancing creativity and discipline in lifecycles L Discipline H H Creativity L Seed Death Design Implementation

24 Complexity: Going Global Requires ever increasing speed to stay on the leading edge Introduces exponential complexity: different cultures, business systems, management styles Requires capital: giving up ownership control Requires partnerships: sharing knowledge and benefits Requires propension for risk: management self confidence Requires empowerment: clear directions and accountability Requires strategic agility

25 Strategic Agility in a global world Perceive! Strategic Acuity: Seeing and framing opportunities and threats in a new way in time Sensing Leadership Unity: Collective decision making and commitment Collective entrepreneurship Commit! Execute! Resource Fluidity: Fast and efficient resource mobilization, Redeployment Mobilizing Source: Yves Doz and Mikko Kosonen, INSEAD, 2006 Cambridge, May 17 th 2012

26 Speed of change Different businesses require different characteristics 26 Fast Focused Entrepreneurship Strategic Agility Operational Excellence Strategic Planning Slow Low High Complexity of business Source: Yves Doz and Mikko Kosonen, INSEAD, 2006

27 Speed of change Corporations need diversified Management Styles 27 Fast Focused Entrepreneurship Leadership Strategic Agility New ventures Individual Impresario Collective Slow Operational Excellence Production Management Strategic Planning Asset management Low High Complexity of business Source: Yves Doz, INSEAD

28 The Management challenge: permanent 360º Innovation Navigating among competing and fast changing ecosystems. Continuously reinventing competencies, business models and organizations. Managing an unlimited number of variables in an unpredictable fast changing world. Consequently, taking fast decisions without enough fact based evidence and being exposed to making mistakes. Unfortunately management today has no clear interpretation map to help us face the challenge. Creativity and entrepreneurship (sometimes just "guts") are the sole effective resources. Going against the generally accepted paradigms without sufficient evidence requires a leadership team with strong self confidence. Cambridge, May 17 th 2012

29 .. And focus on processes 29 Competiveness in the end is a mix of the knowledge embedded in a Company, that resides in people, with the ability to bring this knowledge to the market. Processes are the way people interact with each other. In other words processes are the way Companies "meld" their global knowledge (technical, marketing, relational, whether tacit or explicit) to achieve the objectives of the firm and win in the market place. The most important asset (in my opinion at least) of a Corporation is the matrix among people and processes. And this is what the impresario has to master in each moment of his business life

30 Looking at POWER Speed and volatility require adaptive behaviours, defensive reactions command rigidity. Agile organizations reward influence, rigid structures reward power and control patterns. Typically you have dominance of leaders in one case, of managers in the other. Power is control over resources: Knowledge (people and communication patterns) Budgets (dollars) Assets (factories, territories etc) Resource fluidity MEANS continuously reallocating resources, therefore POWER. Clearly defensive reactions are what we call resistence to change, difficulties to reallocate resources, bureaucratization, politicization etc. Cambridge, May 17 th 2012

31 Management Culture Source: Manfred Kets de Vries, Insead

32 13.Hiring McKinsey to retrain the dead horse. an educational tale The tribal wisdom of the Dakota Indians, passed on from generation to generation, says that: When you discover that you are riding a dead horse, the best strategy is to dismount. However, in any modern company more advanced strategies are often employed, such as: Buying a stronger whip. 2. Changing riders. 3. Appointing a committee to study the horse. 4. Arranging to visit other countries to see how other cultures ride dead horses. 5. Lowering the standards so that dead horses can be included. 6. Reclassifying the dead horse as living-impaired 7. Hiring outside contractors to ride the dead horse. 8. Harnessing several dead horses together to increase speed. 9. Providing additional funding and/or training to increase the dead horse's performance. 10.Doing a productivity study to see if lighter riders would improve the dead horse's performance. 11.Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead and therefore contributes substantially more to the bottom line of the economy than do most live horses. 12.Rewriting the expected performance requirements for all horses.

33

34 The Global Corporation Companies are becoming a unique combination of competences bound together to achieve a set of objectives. These competences range from the ability to reinvent themselves (IBM) to the ability to build knowledge (Google) or lead an ecosystem (Apple). These combinations change over time as business ecosystems change. Few years from now Companies will be different, flexible combinations of values and cultures rather than combinations of infrastructures. Management excellence becomes the ability to combine people and teams on clear objectives rather than create structures, procedures, policies (Nonaka in Fontainebleau ten years ago). This implies on one side stronger management teams able to anticipate change and manage ambiguity and on the other stronger enterprises based on a very different set of values compared to the present. From hard assets to knowledge management. Soft dimensions become the most important asset of a Corporation and the strongest management lever. The key issue facing Corporations is understanding the change and Managing the Transition at all levels (shareholders, board, management, employees, suppliers, stakeholders etc). Cambridge, May 17 th 2012

35 35 Backup

36 The importance of cloud Cloud Zetabytes of data are collected every year. 90% of all stored data have been collected in the last 3 years. 2,5 quintillion each day! 1.7MB per person per minute! 80% are unstructured, dark data Will rise to 93% by 2020! 36 Need to be filtered and analyzed to provide valuable information

37 Data Information Copyright Sergio Bertolucci CERN Presentation Knowledge

38 Dark data: Analytics normal subjects Psilocybin (psychoactive drug) treated subjects

39 The underlaying force: Technology Watson a Workload Optimized System x IBM Power 7501 servers 2880 POWER7 cores POWER GHz chip 500 GB per sec on-chip bandwidth 10 Gb Ethernet network 15 Terabytes of memory 20 Terabytes of disk, clustered Can operate at 80 Teraflops Scales out with and searches vast amounts of unstructured information Linux based

40 Cognitive Computing: Machine Learning + Analytics + Natural Language Respond with degree of confidence Generate and evaluate hypothesis Offer contextual guidance and insights 40 Ingest variety of (big) data Learn with every interaction Understand natural language Provide supporting evidence Support for decision making Scale in proportion

41 Technology evolution: Watson 41 Operates at 80 teraflops. The human brain is estimated to have a processing power of 100 teraflops (100 trillion operations per second). Has the equivalent in memory (RAM) that the Library of Congress adds in books and media over a 4 month period Can process 200 million times more instructions per second than the Space Shuttle s computers. Parses within 3 seconds the equivalent of the number of books on a 700 yard long book shelf and pick out the relevant information, and create an answer. Huge power required to operate (several MW)

42 The Future is.. The replication of the oldest computing architecture The human brain has 100 billion 42 neurons, 1000 trillion synapses and consumes only 20W. It structures unstructured data, cleans up noise, compares new data with past information, decides action. The brain integrates sensor processing, data conversion, transmission and storage, analytics, cognitive computing and even intuitive thinking!

43 Photovoltaic market potential