Adi (A) Among the Top

ADI (a) Among the top three leadership problems at ADI are poor investment decision-making, in which the company pours money into projects for far too long, taking away resources from better opportunities. Another leadership failure is the allowance of negative elements in the corporate culture and a failure to integrate new ideas into the culture. This can be seen with the Human Resources experience, but also applies to the cross-functional communications problems that have arisen during the building of the DSP business.

A third leadership problem at ADI is that leadership tried to develop the DSP business along the same model as the existing analog business, even though the DSP industry and that model are not congruent with one another. There are a few causal factors that contribute to holding onto projects too long. The first is an engineering-first mindset that focuses less on return on investment than it does on achieving project objectives.

A related causal factor is the focus on building business by creating the best products -- this inherently focuses on long-term product development, which is not necessarily the most profitable option. The causal factor of the corporate culture and its issues is that management are primarily insiders, and engineers. With little outside influence in its businesses, the culture is allowed to take on a life of its own, sometimes to the detriment of progress within the company.

The causal factors of the DSP business develop lead back to myopia among senior managers with respect to the best practices, thinking that what works in one industry will be as equally successful in another. This illustrates a lack of fresh thinking in senior management. With respect to the causal factors of the first problem, the leadership needs to adopt an emphasis on financial returns. For the company, this means that leadership needs to exert a greater influence on its divisions and among senior management to focus on returns.

This does not mean dancing to the tunes of the analysts, but at present financial success is assumed, rather than sought. The cultural issues that are at the heart of the second leadership problem will require transformational leadership. The company needs to have a bold vision for itself and use that vision to help guide a new culture into place. A crisis has already been created in losing the cell phone contract.