How To Undo a Mistake
SEAN MALONEY, executive vice president and general manager, Intel Communications Group
By G. Pascal Zachary

(Business 2.0) – Last year Intel made a serious error in one of its most promising businesses, flash memory chips, which are widely used in cellular phones. It drastically raised prices, angering large customers like Nokia and Motorola and causing sales to plummet. You were brought in to win back the customers. How did you do it so quickly?

When [Intel CEO] Craig Barrett asked me to come back and help the flash business, I'd had the benefit of watching it from the side and forming opinions for several years. It's easier to be dispassionate when you haven't got skin in the game. And I'm sure whatever I'm doing wrong, someone else will see from the side.

One thing I realized was that we had drifted apart from the big phone makers: Nokia, Motorola, Sony Ericsson, and Samsung. You need strong ties with at least three of them. My first move was to go out and see customers. Initially you meet people who say, "Hey, I thought you were getting out of the business." My goal was to build personal contacts, find out what's important to them, and figure out a way over a month, two months, three months of rebuilding relations.

We also accelerated our product timeline: We took products targeted for 2007 and pulled them into 2006. We moved products for '06 into '05. That sent the message that we're serious about the business. The declining market share stopped pretty quickly, and we started pulling in new orders within a few months.

If you have a large ship and you want to recapture a market, you have to have people in senior positions who are very market aware. You have to pay incredible attention to the twists and turns of the market, and it helps if you have fresh eyes. — G.P.Z.