A couple of years ago I wrote

A corporation isn’t an entity at all. It’s a group of people, with shared values, all moving in the same direction, united in a shared vision and their efforts to reach a common goal.

Lou Gerstner, who remade the culture at IBM, most famously said,

I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game.

The culture continued to change when Sam Palmisano took over.

…the biggest breakthroughs are a result of changing the business model and the processes and the culture.

Microsoft’s Steve Ballmer learned the hard way that culture can’t be changed by edict, whereas Satya Nadella’s approach succeeded.

Over the last year, 110,000 strong Intel has been changing under the leadership of Robert Swan, who considers the cultural change necessary for its survival.

Its culture badly needed an overhaul, and its 110,000 employees needed to confront issues more openly.

“If you have a problem, put it on the table,” said Mr. Swan, 59, who was promoted to the top job a year ago and has since embarked on a campaign to shake up the Silicon Valley giant.

His efforts remain a work in progress. But the changes — some of which lean on the precepts of Andrew S. Grove, the former Intel chief executive who coined the credo “Only the paranoid survive” — are Intel’s biggest attitude adjustment in decades.

The underlying cause is the same as Gerstner and Nadella faced at their companies: complacency.

Complacency, from years of dominating their markets, and silos, from internal distrust and myopic communications.

Intel was the same.

Intel also had deeply rooted problems reflecting its years of dominance, Mr. Swan said. Managers, complacent about competition, battled internally over budgets. Some of them hoarded information, he said.

These are the same problems that companies of all sizes face.

No matter how dominant times change and competitors can seize the day.

While success is often seen as a case of “us” vs. “them” it’s crucial to remember that “us” includes customers, partners and all parts of the company.

Image credit: Aaron Fulkerson

In 1849 Jean-Baptiste Karr said, “the more things change the more they stay the same” and that’s still true today.

On the surface you wouldn’t think Musical.ly’s Alex Zhu Zhu and Intel’s Andy Grove have a lot in common, but you would be wrong.

Both created cultures that incorporate a critical attitude — paranoia —  although they look very different.

Andy Grove: “When I came to Intel, I was scared to death. I left a very secure job where I knew what I was doing and started running R&D for a brand new venture in untried territory. It was terrifying.”

Zhu Zhu: “The day we released this application to the market we realized it was never going to take off. It was doomed to be a failure.”

Musical.ly’s first pivot went from a video education app to a combination music/videos/social network that was catnip to their target early-teen demographic.

That led to growth, but it was slow growth, which the founders knew was leading to a slow death.

The a-ha tweak happened when they moved the logo and growth exploded.

They had realized that when people shared the music videos, the logo was cropped out on Instagram and Twitter. They repositioned it so now it was easy to see that it was a Musical.ly video.

Grove said, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” (Grove’s paranoia did not condone bullying or a culture of fear.)

Zhu Zhu is far from complacent and keeps pushing and iterating faster.

“I think we have these scary moments all the time because you’re never safe. Even if you have tens of millions of users, you have to keep them always engaged. I think it’s better for us to be scared all the time rather than feel content that we built a successful product and now we can lay back.”

If you don’t care for paranoia, you can substitute a combination of never-ending mindfulness, objective reality as opposed to comforting assumptions and unremittingly honest feedback.

Image credit: musical.ly

Non-compete agreements are the bane of workers, especially those whose skills are industry-specific and don’t travel well — such as semiconductors — and whose employers answer to state laws other than California’s.

And it’s easy to understand employer paranoia regarding proprietary information, trade secrets, customer lists, etc.

Intel’s legendary Andy Grove built its culture on the idea that “only the paranoid survive,” but Jeff Bezos’ paranoia makes Grove look like Mister Mellow.
That paranoia really shows up in the 18 month non-compete clause for hourly and seasonal workers.

“[Workers can not] engage in or support the development, manufacture, marketing, or sale of any product or service that competes or is intended to compete with any product or service sold, offered, or otherwise provided by Amazon (or intended to be sold, offered, or otherwise provided by Amazon in the future) that employee worked on or supported, or about which employee obtained or received confidential information”

Even more bizarre is the definition of “competitors,” which include physical retailers, publishers, e-commerce retailers, media companies, payment processing and information/computing storage.

Granted, it’s never been enforced and the company says they are removing it, but it certainly gives a window on Bezos’ paranoia.

And while it could be the product of an unconstrained law department, but given Bezos’ well-known micro-focus that’s doubtful .

Image credit: Tambako The Jaguar

I never did understand the frenzy around startups and small biz as an engine for job creation, but I kept still—no one makes a fool of themselves intentionally.

Then last July I read an article by Andy Grove about what it takes to create jobs and my thoughts didn’t seem quite so ignorant. In September I read that after the first rush of hiring small and large companies are fairly even regarding job creation.

I also couldn’t understand the economic value of companies such as Groupon, Twitter, Zynga or even Facebook. I really couldn’t see how new ways to sell stuff was going to rebuild the middle class; it just didn’t seem that anything new and real was actually being created, but I didn’t broadcast those heretical views, either.

Now I’m seeing my heretical ideas voiced by people with cred.

So if this tech bubble is about getting shoppers to buy, what’s left if and when it pops? [Steve] Perlman [founder or WebTV] grows agitated when asked that question. Hands waving and voice rising, he says that venture capitalists have become consumed with finding overnight sensations. They’ve pulled away from funding risky projects that create more of those general-purpose technologies—inventions that lay the foundation for more invention. “…But they are building on top of old technology, and at some point you exhaust the fuel of the underpinnings.”

Beyond all this is the fact that selling stuff requires a strong middle class to buy it and even startups with real products aren’t contributing to the manufacturing jobs that underpin that same middle class.

“The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.” –Andy Grove

China and India are consumer powerhouses not because of their newly minted uber-rich, but because of their growing middle class.

Most of this has been said in one way or another, but it doesn’t seem to have sunk in. I certainly don’t have the answers, but I am sure that the conversation needs to become a lot louder before anyone notices, let alone takes action.

Image credit: Flickr

Article first published as No Help Wanted on Technorati.