Avago Drives Innovation With Collaboration
By MOREY STETTNER
Posted 06/03/2011 05:15 PM ET
There's a link between innovation and communication. At Avago Technologies (AVGO), they go hand-in-hand.
"At the end of the day, the question is who can innovate the fastest and with the most capability," said Doug Bettinger, Avago's chief financial officer. Avago, a chip firm, is co-headquartered in Singapore and San Jose, Calif.
Avago's strengths in technical innovation date back 50 years to its roots as part of Hewlett-Packard (HPQ). It functioned as HP's components unit for three decades. When HP spun off Agilent Technologies in 1999, its components unit became Agilent's semiconductor group. In late 2005, Avago became the world's biggest privately held independent chip firm. It completed its IPO in August 2009.
Avago's executive team unclogs communication channels to spur innovation. By spurring employees — especially engineers — to share ideas freely, the top brass sets the stage for breakthrough thinking.
Bettinger and other senior officials don't leave innovation to chance. They set goals and define long-term technological challenges for the engineers to address.
Careful Plans, Clear Goals
By concentrating engineering talent in geographic "centers of excellence" that are organized along the company's seven product lines, Avago maximizes collaboration among its 2,000 design and product engineers. They're better equipped to focus on key technologies because they operate within these centers, Bettinger says.
"We also collaborate jointly with our customers," he added. "It's all part of our DNA to drive innovation."
Avago's leadership team outlines what the engineers need to work on. By spotlighting high-priority projects, Bettinger and other execs focus on what matters most.
"Every year, we do a three-year long-range marketplace and technology plan," he said. "The plan folds into our annual product development efforts, creating an annual planning process consisting of cascading goals from top to bottom."
General managers at each center of excellence convey the executive team's vision to engineers and "make it real for them," Bettinger says. This helps engineers understand what they need to do, why it matters and how management will measure their work.
Senior executives set goals for each of Avago's seven divisions and tie employees' compensation to those goals. In keeping with the company's collaborative spirit, general managers sometimes debate specific aspects of the goals.
To spark creative dialogues throughout the company, Tan hosts informal "coffee talks" every quarter to discuss important goals with employees. He also highlights success stories from the just-completed quarter relating to internal achievements and engineering milestones.
"There's an open question-and-answer session following the CEO's talk," Bettinger said. "It's free-flowing communication. A lot of our engineers have been here 20+ years, so they're comfortable asking questions and sharing their ideas."
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