Leadership Profile: Sass Somekh (Part 7)

The semiconductor market is undergoing constant innovation and change, and at present, much of the challenge is in miniaturization, as the large volume chips are mostly going into consumer electronics. This introduces unique problems for equipment companies: they must effectively manage productivity, while also being sources of innovation. Here Sass explores both of these phenomena in the context of Novellus. We also discuss divisional versus functional organization structures.

SM: When you arrived at Novellus, what direction did you determine the company needed to take?

SS: When I came to Novellus, I realized that while they had a reputation for productivity, they also had some great technology. For example, they had started in the CVD business and ushered copper technology into semiconductors by developing the saber electroplating tool. They became a market leader in that. Novellus has certainly demonstrated the ability to master both technology and productivity.

One of the things you must do with new technology is test and evaluate before you show it to customers. Unfortunately, by that time customers have already made a commitment to a certain technological path, and it is very difficult for them to change course.

Novellus came up with a new idea. At the semiconductor show we set up a garage to allow customers to see what was behind the door. We had a big garage door and behind it we displayed technologies each of the groups was working on.

Another thing we changed at Novellus was the strict product development organization. That was a great process when the company had a single product, but by the time I arrived, there were many products with one internal group trying to do product development for all seven business units. They became the bottle neck as far as introducing technology.

There was also a disconnect between the group doing product development and the business unit who was introducing it. They would each give different answers. We have done something we called empowering the business unit, and we transferred responsibility for product development to the business unit. Now you have a General Manager who is responsible for the product from cradle to grave, sort of like a mini CEO.

This makes sure you do not have finger pointing within the company, however when you do that, the responsibility of that person becomes much greater and you need to ensure you have the appropriate person running the business unit. We ended up doing the best of both worlds at Novellus. We kept productivity and the culture with that mindset, but we also had advanced technology with very close interaction with the customer. We changed the tagline of the company from “First in Productivity” to “Innovative Technology – Trusted Productivity”.

SM: Your comments about moving from a functional organization to a divisionalized organization structure with full-scale GM’s is interesting. I have clients who have gone the opposite direction. Cadence, for instance, used to be more of a divisionalized structure, but is now completely functional. There are not many companies that allow GMs to be true GMs, and hence, executives with large scale GM experience are difficult to find in the valley. I would say, one of the reasons GE develops so many scalable CEOs is because they have a divisionalized structure whereby GMs get to be real GMs, and not castrated GMs.

[to be continued]

[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 7 in the series : Leadership Profile: Sass Somekh
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