Spurned by Intel, Leadership Experts Launch Their Own Firm

By Ed Frauenheim

Jan. 10, 2008

Kevin Gazzara and Ali Lakhani didn’t plan on leaving Intel to start a leadership consulting business. They say Intel all but pushed them into it.

    Gazzara spent 18 years at the computer chip maker, much of that time as a leadership development specialist. Up until December of 2006, he ran training programs for first-line and midlevel managers at Intel. Gazzara also has taught at the University of Phoenix for more than a decade.

    Lakhani worked at Intel for 17 years. Although originally a semiconductor engineer, he took an interest in leadership development and earned a doctorate of management in organizational leadership from the University of Phoenix in 2005. Gazzara was his mentor.

    In late 2005, the pair began pitching a new leadership assessment tool within Intel. Dubbed the Cross-Cultural Leadership Inventory, it was designed to link leadership behaviors and characteristics to organizational performance and business results across 70 nations.

    The inventory was based on Lakhani’s research and involved examining the leadership performance and business results of about 200 Intel managers. Gazzara says the Cross-Cultural Leadership Inventory was unique in providing a tailored, measurable view of how well a particular executive would perform in different parts of the world.

    As Gazzara and Lakhani tell it, they found numerous Intel business unit leaders interested in the tool, but got stuck at the door of Richard Taylor, Intel vice president and co-leader of the firm’s HR department. Taylor heard them out last year but declined to move forward with a proposed pilot of the tool, Gazzara and Lakhani say.

    According to Gazzara and Lakhani, Taylor considered the inventory a typical 360-degree assessment, which is a diagnostic tool that takes in feedback from a variety of co-workers. But, they say, Taylor’s view missed the crucial way their tool measured cross-cultural leadership and predicted business results, grounded in Intel data.

    Taylor declined to go into detail about the decision regarding the inventory. But he defended Intel’s choice in a statement:

    “There are many systems for assessing and developing leadership, all of which have pros and cons and none of which are totally perfect,” he said. “We are satisfied with the approach we are taking and will let the results of the company and its people speak for themselves.”

    Having suffered a 9 percent revenue loss in 2006, Intel rebounded financially last year. Its third-quarter revenue rose 15 percent to a record $10.1 billion, and net income for the quarter jumped 43 percent to $1.9 billion. Intel also has introduced a variety of new products in the past 12 months or so, including a processor named by Time as one of the best inventions of last year. What’s more, the company has received high marks for its leadership development practices, and its corporate culture is famous for encouraging employees to pipe up with good ideas and challenge executives.

    But Intel’s approach to leadership training has come under fire amid a major corporate restructuring over the past 20 months. And some ex-Intel employees claim the culture has atrophied.

    For Lakhani, Taylor’s reaction was in stark contrast to the informed risk-taking he was used to seeing in Intel’s design engineering. There was an “aversion to trying new things” in the realm of people development, he says.

    For Gazzara, the decision added to the frustration of getting transferred to a job he didn’t like and not having a say in the move. In the course of the company’s overhaul, Gazzara found himself designing one-off training courses even though his passion lay in broader leadership development and employee engagement programs.

    He and Lakhani survived job cuts during the restructuring, which involved chopping some 10,500 positions from a workforce of 102,500. But they both resigned after the meeting with Taylor. Lakhani left the company in May; Gazzara’s last day was in June 2007. That same month, they started a consulting firm to pursue their vision of smarter leadership assessment and development. Along with another ex-Intel employee, Marleen Lundy, they formed Magna Leadership Solutions.

    The three say they’ve built a new diagnostic tool that connects cross-cultural leadership behaviors with business outcomes. Dubbed CALIBER (for Culturally Adapted Leadership for Inspired Business, Excellence and Results), it is based on additional research Lakhani did with non-Intel subjects.

    So far, Magna has snagged business from clients including Cisco Systems and Avis. Gazzara and Lakhani plan to release a book this month that highlights leadership principles using a Wizard of Oz analogy.

    Despite their frustrations with Intel, Magna’s founders say they hope for the best for the company. Gazzara, Lakhani and Lundy may have traded the blue Intel logo for a black Magna one, but they say they still have a little “Intel inside” them. “We will always have Intel-blue blood running through our veins,” Gazzara says.

Ed Frauenheim is a former Associate Editorial Director at Human Capital Media and currently works as Senior Director of Content at Great Place to Work. He is a co-author of A Great Place to Work For All.

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