11/01/2007
Shortly after the Chinese personal computer maker Lenovo Group bought IBM’s PC division in May 2005, Lenovo’s maverick chief executive, Yang Yuanqing, poached William Amelio from Dell, and the two former competitors oversaw the biggest corporate East-West merger to date. They are still working out the cultural transition, but by all reports have come a long way since the early meeting of design teams at which a Western designer said the company needed a "common" design element in the commercial and consumer lines, and the Mandarin speakers understood that to mean Lenovo needed a "boring" design element.
With Yang as chairman of the board and Amelio as CEO, the
company is preparing for a tight race. Lenovo won the design competition for the
2008 Olympic torch, which a mountaineering team will carry up to the summit of
Mount Everest, but the business world is now watching for an Olympic-size battle
as Acer prepares to acquire Gateway, a move that will edge out Lenovo as the
world’s third-largest PC maker behind Hewlett-Packard and Dell. Amelio, 49, who
has athletic credentials of his own with a second-degree karate black belt,
spoke with Worth features editor Jan Alexander about
competing for domination of the global personal computer market.Generally, analysts say it’s hard to compete with hardware, that a PC is a PC. Now you have to sell the world on the Lenovo brand, and distinguish it from IBM as well as from your actual competitors.
Just take a look at our ThinkPad T61 series, launched in May. I have one next to my phone and you can’t even hear the fan on it. We were inspired by the wings of owls to redesign our fan blades to take the noise level down. Additionally, we don’t like the idea that when you sit with a laptop on your lap it gets hot, so we’ve made all the ThinkPad laptops significantly cooler.
How do you do that?
If I told you, I’d have to kill you.
Where are these innovations taking place?
In what we call our innovation triangle—Raleigh, N.C., Yamato, Japan, and Beijing. We also have a national research center in Beijing. We have about 250 engineers there who do nothing but applied research. This is the team that designed the Olympic torch.
As China produces more innovations, how long is it likely to remain a center for low-cost engineering?
There’s no question about it, in countries like India and China the acceleration rate of job expenses is four times that of the rest of the world. But even if you plot that, it’s still going to take a long time to catch up. Furthermore, there will be more people coming into the labor pool, which will create a tendency to drop the rate back down again. They’re talking about a concept called "world sourcing," where essentially you find the best and most efficient low-cost spot for each portion of the value chain. The companies that are able to figure out how to do that most efficiently are the companies that are going to win in the future.
Reaching out to the entire world for the best ideas, best components, design, processes, management, etc., will become something that really helps build your brand internationally. There are plenty of places in the U.S. where the work is still the most efficient. We still have much of our software and hardware designed in the Raleigh area. All of us have to focus on what we do extremely well and then make sure that we exploit that as much as possible. If we try to hold on to outdated ideas and things we’re not the most efficient at, the outcome is never going to be good.
If I were writing your biography, would the first chapter be
about karate class leading to a fascination with Asia?
Karate piqued my interest in
Japan. I started studying it in 1983, so I was grown up. I’d wrestled
competitively in college, and I took up karate because I wanted to continue in a
competitive sport. My instructor was Japanese. The first time I went to Asia was
in 1986, and a few years later I went to China for the first time. My last six
years with Dell I worked in Singapore, which is a melting pot for almost all of
the other cultures in Southeast Asia.
What is your commute like now?
I describe the home office as wherever I
decide to go. My family lives in Singapore most of the time, but they spend a few months of the year at our home in Austin. I’m in
Raleigh a lot, too. I’m on a plane about once a week. Outside of the United
States I fly commercial, but on domestic trips I use NetJets. I’ve had more
delays trying to fly commercial in the United States and missed several
important engagements, with people waiting for me.
Where would you live if you had to settle down in one place?
I live by the adage "Happy wife,
happy life," so a better person to ask is my wife, Jamie. She’s very happy in
Singapore, with our four children and two girls from Cambodia for whom we’ve
become legal guardians. Jamie is a financial planner by profession, but she has
found the spot where we’re able to do what we think is important.
Meaning the charity the two of you started called Caring for Cambodia?
Yes. Jamie got the idea when she
took a vacation to see the 12th-century temples at Angkor Wat. The little girls
who took her around to the temples could speak pretty good English, and they
told her it cost their families $5 a month to send them to school, which was a
big burden for them. Before she left, she agreed to sponsor maybe a dozen girls.
We went back a month later with 10 huge duffel bags of donated clothes and
uniforms that we gave to the villages and the schools. We bought bicycles while
we were there and had a big lucky draw for some villagers. This was right before
Mother’s Day of 2002 and Jamie said to me, "I don’t want anything for Mother’s
Day this year except one thing: I want you to build a school here in
Cambodia."
I said, "You want me to build what?" I reminded
her that we’d built plenty of houses in our life and none of them had been
finished on time or on budget. She said, "You know how to run a company, you
should be able to figure out how to do this." Here we are now, four schools
later, plus a teacher training center that we built because we realized how
important it was to teach the teachers. And every one of them was done on budget
and on time. We’ve also started a program we call Food for Thought that provides
the kids with one meal a day.
Now we have people on the ground there taking care of the
day-to-day operations, but Jamie travels there about once a month, and I go
there once a quarter. What’s nice about living in Singapore is that there are a
lot of trailing spouses who have some great expertise and want to give back to
the world. We get some very talented people who serve on our board of directors
and have had some great creative ideas that we’ve been able to incorporate into
the schools.
Are there computers in the classrooms?
In each school there is a room
with dozens of computers that the kids share. There was a problem with the
electricity spiking a lot. But we got the Raffles Hotel to help us with that; it
donated some generators.
I was surprised to see how quickly they took to the computers.
It’s quite amazing. In any culture you can see children struggle with education,
and all of sudden they get to a computer and their eyes light up and they learn
how to use it pretty rapidly.
Yet even in a computer company, enormous cultural differences
remain. For example, any training manual on doing business with the Chinese
will say they consider it the height of rudeness to express a personal
opinion, as Americans do on a daily basis.
The culture at Lenovo was always
a little edgier than most Chinese companies, but it is still not an easy thing
for the Chinese staff to speak out that way. If you see somebody looking antsy
and you ask some probing questions, then they for sure will tell you what’s on
their mind. At our meetings, we’ll stop and have someone give an interpretation
of what was just said so everybody can catch up, because a lot of our colleagues
find it difficult to follow the quick back and forth in different languages. We
also stop and ask for viewpoints to make sure we get all the key stakeholders’
opinions.
Yang Yuanqing, who is known as "China’s first global capitalist," became fluent in English in a little more than a year after the IBM acquisition. Do you speak Mandarin?
No, I wish I did. I’d want to go
into an immersion program for x amount of days. Given my travel
schedule, I’d have to justify being away from my wife and kids a lot longer than
I’d like to be. I would like to learn every language there is. It would be
wonderful to be able to sit down with someone speaking another language and know
exactly what they’re saying but I make do with what I have.
There are science fiction stories in which technology has made
it possible for everyone’s brain to instantly translate every language.
That would be cool.