Leadership Profile: Sass Somekh (Part 4)

Sass has displayed a consistent and perpetual ability to introduce extremely successful product lines at Applied Materials. Here we discuss the methodologies he used to establish the environment of innovation and product development. Very few companies have been able to internally innovate after reaching a certain scale. Many have perfected the art of M&A to bring new product lines into their portfolios, Cisco Systems and Cadence Design Systems are two examples of this strategy. Intel, of course, has always been able to innovate internally, and onlye recently has started showing signs of faltering. For decades, it managed to keep up with innovation. So let’s hear about Sass’s approach to internal innovation inside a large company.

SM: You have started several new product lines within Applied, and they were all very successful. What is your process of deciding what product to develop? How do you identify the opportunity? SS: When you operate in a large company, the challenge you face is how to be a big company which has structure and organization, yet still behave like a small company when it comes to entrepreneurship.

One of the things that we have done at one time is to bring all of the key innovative guys in the company together, and we asked them what it takes to innovate together. To do a startup, once you have the money, it is relatively easier because there are no rules or regulations. You can move very rapidly.

Next we made a list of items that people felt were very important for them.

The first one was the need to report at a higher level. If you have a small group developing a product at a company, they would report to a supervisor, who reports to a manager, who reports to a director, who reports to a vice president. The idea was to report them at a high level, regardless of how small they were. They get the attention and they have better visibility in the company, helping the company reach decisions faster.

The second thing was to reduce the rules and regulations. For example, we allowed them to buy parts with credit cards versus going through the lengthy purchase order process. We allowed them to move to an outside building. We offered them an incentive plan that would pay cash and stock options if the product was successful. This list has allowed us to continue innovating in a large company while maintaining law and order within the company.

Structure and business processes must be maintained; you cannot have a big company by having many small disjointed fragments. When you have structure you run into a problem which is that there are a lot of people who can say no, and it is not clear who can say yes. That kills innovation. You have to have a process for that, but it must operate within the company.

My roll in developing these product lines, particularly later on, was to put good people together and provide them some initial direction. I would weed out the people who were not good, you have to have some courage for that part, and then just be a cheerleader and cheer them to success. If I look back, I see my major accomplishment being the development of those teams.

[to be continued]

[Part 3]
[Part 2]
[Part 1]

This segment is part 4 in the series : Leadership Profile: Sass Somekh
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