Wolfe's Den: Why Intel's Reorg Puts Maloney In CEO Successor Seat - InformationWeek

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9/20/2009
06:02 PM
Alexander Wolfe
Alexander Wolfe
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Wolfe's Den: Why Intel's Reorg Puts Maloney In CEO Successor Seat

How Intel's painful efforts to diversify beyond computer processors have dogged president Paul Otellini, and why they'll challenge Sean Maloney, the man viewed as next in line to lead the company following a management shakeup.

The conventional wisdom, following a shakeup of its senior management, is that Intel chief sales and marketing officer Sean Maloney is now established as the future successor to CEO Paul Otellini. But wait; Otellini, who deserves kudos for a steady leadership style that's positioned the chip behemoth for the future without creating a cult of personality, isn't going anywhere just yet.

The September 14 reorg saw Intel's operating structure realigned on two main fronts. In design and development, all the major product groups were consolidated into the newly formed Intel Architecture Group, which will be run by Sean Maloney and Dadi Perlmutter, a well-regarded Israeli-born engineer who heretofore led the Mobility Group responsible for the creation of Intel's Atom netbook processor.

Simultaneously, Intel put all its manufacturing operations under Andy Bryant, who currently holds the title of chief administrative officer. To long-time Intel watchers, Bryant is better known as Intel's chief financial officer from 1994 through 2007. Overseeing Intel's fabs is a natural fit for Bryant, as I'll discuss later.

Along with the elevations, Intel bid farewell to two executives. As the press release worded it, chief technology officer Pat Gelsinger and general counsel Bruce Sewell were leaving "to pursue other opportunities." Both promptly reemerged, adding veracity to Intel's claim that the major realignment had been in the planning stages for months (i.e., these guys had plenty of time to find new jobs). On Sept. 14, Gelsinger landed as president of the storage infrastructure business at EMC, and the next day Apple announced it had tapped Sewell to be its top lawyer.

Intel's moves kicked off a typical Web news cycle of "type now, think later" coverage, depressing for its conventionality. Much of it keyed off of verbiage in the announcement that Otellini "will devote a higher quotient of his time to corporate strategy and driving the company's growth initiatives" to drive the story line that Maloney was moving into position as a CEO in waiting.

Conventional though that thinking may be, my sources close to Intel tell me that, inside the company, if you're a betting person, you're betting on Maloney as well. At the same time, no one believes Otellini is being shoved toward the door, or that that strategic focus mentioned in the memo is a euphemism for being kicked upstairs. Indeed, with the emerging business challenges in EMEA, there's a lot of strategy to scope out.

There are other reasons for the view that Otellini will remain at the helm. For one, Intel does not change CEOs rashly, and would certainly seem disinclined to ditch one who's successfully navigated his way through several tech down cycles. At 58, he is seven years from Intel's mandatory retirement age for CEOs. (I've confirmed it's 65; I point this out because there are several stories searchable on Google which give the age as 60.)

Plus, despite lacking charisma, Otellini exhibits a certain leadership poise, polished by his four years as the public face of the company, that can't yet be matched by either Maloney or Perlmutter.

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