Daily Lesson from Life 18 July 2008

July 18, 2008, 7.05 am (Singapore time) AMD posts 7th quarterly loss, names new CEO

NEW YORK - Advanced Micro Devices posted its seventh consecutive quarterly loss, missing Wall Street estimates on Thursday as the chipmaker struggled to regain market share from Intel Corp.

The company also announced later that CEO Hector Ruiz would be replaced by COO Dirk Meyer. Mr Ruiz will stay on as executive chairman.

AMD shares fell more than 9 per cent to US$4.80 in late trading after it posted a second-quarter net loss of US$1.19 billion, or US$1.96 per share, compared with a year-ago net loss of US$600 million, or US$1.09.
Its quarterly loss included a US$1.44 per share impairment charge for the write-off of some of the value of its 2006 purchase of graphics chipmaker ATI Technologies.

Its operating loss would have been 60 cents a share, excluding an unusual gain of 16 cents a share, compared with the average Wall Street expectation for a loss of 52 cents a share from analysts polled by Reuters Estimates."

Why did I pick this headline to comment? Well, the CEO of AMD was the CEO for the most successful operation in Motorola heyday during my employment with Motorola - Pagers! He was a visionary in that he gave a lot of autonomy and developed a lot of Asian leaders during his time. The business was nimble and responsive to the customers and market and hence very successful.

Of course, paging industry went from zero to zillion to zero in a short 10+ years due to the inevitable tide of change in the technological field - the emergence of mobile phone that also include the capability to broadcast and receive and send short messages and even long emails. It is through no fault of the folks in the industry. It was a force that no one could have turned around. The sharp observers will comment that RIM (Research in Motion) product - Blackberry - could have been a two-way pagers that was launched during the paging last days. That was not to be. At least not in Motorola when the resources were deemed better used to invest in the growing mobile phone business.

Lessons for me:

1. no leader can claim to revive or create a thriving business on his own. It is laughable that the USA business press continued to laud this or that 'Star-CEO' is the saviour of another ailing company!;

2. whether you succeed or fail, you will be remembered by the people who worked for and with you as a leader with integrity, generosity, visionary, and respected one long after the ups and downs passed us by. Hopefully you know how you are remembered;

3. in recent time, I have seen many 'top leaders' who ruined the companies they led and yet go away with obscene amount of 'golden parachute'. Their departure is handsomely rewarded as they lay off hundred and thousand of honest working employees! This is shameful. Hopefully, when we go, we do the right thing by taking responsibility and not plundered the company's already depleted cash!

I like to wish Mr Hector Ruiz a peaceful departure from the CEO of AMD post and continue to contribute in other ways that he can. You have made history by taking AMD to a level where the omnipotent and dominant competitor, Intel, once conceded AMD had come a long way.