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Harvard Case - Intel NBI: Intel Corporation's New Business Initiatives (A)

"Intel NBI: Intel Corporation's New Business Initiatives (A)" Harvard business case study is written by Willy Shih, Thomas Thurston. It deals with the challenges in the field of Organizational Behavior. The case study is 12 page(s) long and it was first published on : Oct 6, 2008

At Fern Fort University, we recommend that Intel Corporation implement a comprehensive strategic framework for managing its New Business Initiatives (NBI) program, focusing on fostering a culture of innovation, empowering cross-functional teams, and leveraging data-driven decision-making. This framework should prioritize clear communication, resource allocation, and performance measurement to ensure the success of NBI initiatives.

2. Background

This case study focuses on Intel Corporation's efforts to diversify its business portfolio beyond its core competencies in microprocessors. The company established the New Business Initiatives (NBI) program to explore and invest in new technologies and markets, including areas such as flash memory, wireless communications, and digital media. The case highlights the challenges faced by Intel in managing this new business initiative, including organizational structure, resource allocation, and communication.

The main protagonists of the case study are:

  • Craig Barrett: CEO of Intel Corporation, who initiated the NBI program to diversify the company's revenue streams and prepare for future growth.
  • Andy Grove: Former CEO of Intel Corporation, who advocated for a more focused approach to managing NBI initiatives, emphasizing the importance of clear goals and accountability.
  • The NBI team: A cross-functional group of employees tasked with identifying, evaluating, and developing new business opportunities.

3. Analysis of the Case Study

The case study presents several key challenges for Intel's NBI program:

1. Organizational Structure and Culture: Intel's traditional hierarchical structure and focus on core competencies created resistance to new initiatives. The NBI team struggled to navigate the existing organizational culture, leading to communication breakdowns and resource allocation challenges.

2. Leadership and Decision-Making: The lack of clear leadership and decision-making processes within the NBI program resulted in conflicting priorities, unclear roles, and a lack of accountability. The team's efforts were often hampered by internal politics and competing agendas.

3. Resource Allocation and Performance Measurement: Intel's resource allocation system favored established business units, making it difficult for the NBI team to secure funding and support for new initiatives. The lack of a robust performance measurement framework made it challenging to track the progress and impact of NBI projects.

4. Communication and Collaboration: The NBI team faced challenges in communicating its vision and progress to stakeholders, leading to a lack of understanding and support from senior management. The team also struggled to foster effective collaboration across different functional areas.

5. Innovation and Risk Tolerance: Intel's traditional approach to innovation, focused on incremental improvements to existing products, hindered the development of disruptive technologies. The company's risk tolerance was limited, making it difficult to invest in high-risk, high-reward NBI initiatives.

Framework: To analyze the case study, we can apply the 7S Framework developed by McKinsey & Company. This framework examines seven key elements of an organization:

  • Strategy: Intel's NBI program aimed to diversify its business portfolio and explore new markets.
  • Structure: The NBI team operated within a hierarchical structure that created communication and resource allocation challenges.
  • Systems: Intel's existing resource allocation and performance measurement systems were not designed to support NBI initiatives.
  • Style: The company's leadership style emphasized efficiency and control, which could stifle innovation and risk-taking.
  • Staff: The NBI team consisted of talented individuals, but they lacked clear direction and support from senior management.
  • Skills: Intel's core competencies in microprocessor technology did not necessarily translate to success in new markets.
  • Shared Values: The company's culture emphasized stability and efficiency, which could conflict with the need for experimentation and innovation.

4. Recommendations

To address the challenges faced by Intel's NBI program, we recommend the following:

1. Establish a Clear Strategic Framework:

  • Define a clear vision and mission for the NBI program, aligned with Intel's overall corporate strategy.
  • Develop a comprehensive roadmap outlining key initiatives, timelines, and resource allocation.
  • Establish a dedicated NBI leadership team with clear roles and responsibilities.

2. Foster a Culture of Innovation:

  • Encourage experimentation and risk-taking within the NBI program.
  • Reward innovation and entrepreneurial thinking.
  • Create a culture of collaboration and knowledge sharing across different functional areas.

3. Empower Cross-Functional Teams:

  • Establish dedicated cross-functional teams with the necessary expertise and resources to develop NBI initiatives.
  • Provide clear goals, objectives, and performance metrics for each team.
  • Empower teams to make decisions and take ownership of their projects.

4. Implement a Data-Driven Approach:

  • Develop a robust performance measurement framework to track the progress and impact of NBI initiatives.
  • Leverage data analytics to identify trends, opportunities, and potential risks.
  • Use data to inform decision-making and resource allocation.

5. Enhance Communication and Collaboration:

  • Establish clear communication channels between the NBI team and senior management.
  • Regularly communicate the vision, progress, and challenges of NBI initiatives.
  • Foster collaboration and knowledge sharing across different functional areas.

6. Develop a Talent Management Strategy:

  • Identify and develop employees with the skills and experience necessary to support NBI initiatives.
  • Create opportunities for employees to learn and grow within the NBI program.
  • Attract and retain top talent in areas relevant to NBI initiatives.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core competencies and consistency with mission: The recommendations align with Intel's strategic objective of diversifying its business portfolio and exploring new growth opportunities.
  • External customers and internal clients: The recommendations aim to improve the NBI program's effectiveness in identifying and developing new products and services that meet the needs of external customers and internal clients.
  • Competitors: The recommendations encourage Intel to adopt a more entrepreneurial and innovative approach to compete effectively in emerging markets.
  • Attractiveness ' quantitative measures if applicable: The recommendations emphasize the use of data-driven decision-making and performance measurement to ensure the financial viability of NBI initiatives.

6. Conclusion

By implementing these recommendations, Intel can create a more effective and sustainable NBI program that drives innovation, fosters collaboration, and delivers tangible results. The company can leverage its existing strengths in technology and manufacturing to explore new markets and create new revenue streams.

7. Discussion

Alternatives:

  • Focusing solely on incremental innovation: This approach would limit Intel's ability to compete in emerging markets and could stifle long-term growth.
  • Acquiring existing companies in new markets: While acquisitions can provide quick access to new markets, they also carry significant risks and may not be a sustainable long-term strategy.

Risks and Key Assumptions:

  • Resistance to change: Intel's traditional culture and organizational structure could create resistance to the recommended changes.
  • Lack of resources: Intel may face challenges in allocating sufficient resources to the NBI program.
  • Competition: The NBI program will face intense competition from established players in new markets.

8. Next Steps

  • Develop a detailed implementation plan: This plan should outline specific actions, timelines, and resource allocation for each recommendation.
  • Establish a dedicated NBI leadership team: This team should be responsible for overseeing the implementation of the recommendations.
  • Communicate the changes to stakeholders: Clear communication is essential to ensure buy-in and support for the NBI program.
  • Monitor progress and make adjustments: Regular monitoring and evaluation will help ensure that the NBI program is on track to achieve its objectives.

By taking these steps, Intel can transform its NBI program into a powerful engine for growth and innovation, positioning the company for success in the 21st century.

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Case Description

For Intel Corporation, the processes and priorities that have made it so successful are difficult to overcome as the company tries to diversify away from its core. The case examines the history and evolution of the New Business Initiatives (NBI) group, as the leader grapples with the questions surrounding why so few of the unit's start-ups actually become significant businesses within Intel's existing divisional structure. While a handful have successfully "graduated" and continue to show high levels of promise, these ventures did not represent truly new and distinct businesses for Intel. Rather they were strongly tied to existing businesses, raising the question of whether NBI had simply become a way for existing divisions to off-load budgetary risk. The case examines what worked, and what didn't, and the challenges posed by transitioning new ventures into the mainstream of the company.

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