Executive interview: In transition

ATI's chief executive talks about his own unemployment in the wake of the 2006 ATI/AMD merger.

Change is never easy, but especially not when you’re integrating two large technology companies like California-based Advanced Micro Devices and ATI Technologies of Markham, Ont. After AMD announced the US$5.4-billion friendly acquisition in July 2006, David Orton, ATI chief executive since 2004, worked with AMD president and COO Dirk Meyer to restructure the new organization. A year later, though, no executive office remains for Orton himself, who resigned. He leaves a company on its heels, bleeding red ink and desperate to prove that the merger will pay off.

On the eve of unemployment, Orton talked to Canadian Business senior writer Andrew Wahl at AMD’s Silicon Valley offices about transitions — both corporate and personal.

What cultural differences did you find during the integration?

AMD was really a single-threaded business unit, a microprocessor business unit, and a lot of the focus from a cash management standpoint was on manufacturing. ATI was really a design company, so we didn’t have that manufacturing piece, and ATI had moved to multiple, almost independent business units. So those create a different rhythm about how you drive the business, how hard you push decisions down versus what’s managed up. People in the company will say I’m somewhat of a micromanager, or I’m very hands-on, depending on whether they want to be polite or not. But at the same time, you try to push empowerment down into the businesses to make decisions. Over here at AMD, because of the capital expenditures and because product pricing decisions have such a swing, you push those up, and that creates a culture for how you run the business. Beyond that, I think ATI was very entrepreneurial, very lean. We had one-tenth the number of lawyers [as AMD].

How has ATI’s structure been combined with AMD?

AMD has now moved from one major business unit to three, two of which are made up of ATI businesses. One of the areas that Dirk and the engineering team are focusing on now is, within those three business units, how do you drive this concept of horizontal leverage? You want this autonomy of the business unit, but you’ve got to drive leverage across the three major business units. You want engineering aligned to the business unit, but you need to drive something horizontally. Through something we’re calling the Corporate Technology Council, we’re driving this horizontal technology through the company. I say “we,” but the royal “we.”

How tough is it to let go?

The easy part is there wasn’t an obvious job, and I’m the first to say, let’s not make up
a job that is unnatural. The tough part is letting go of the team and the business. Jim Wong, VP of Acer, was in town three weeks ago, and I took him out to play golf and talked about the business. The fact that I can’t help him anymore now is frustrating.

What’s your greatest accomplishment at ATI?

K. Y. [Ho] and Adrian Hartog and team built a phenomenal business, but in 2000 it was sick. We got the core GPU business healthy. We entered the chip-set business very strong, and we grew two consumer electronics businesses. We basically spoon-fed some of the investments in handheld and DTV but allowed them to still be entrepreneurial. At the same time, we gave Nvidia a run for their money and were on top for a while.

A common criticism of ATI was that it overemphasized engineering and was weak in sales and marketing.

I always heard that. For some reason, Nvidia has always had a glow on it, even when we knocked them down two or three times. Part of the disadvantage ATI has had from a marketing standpoint is that we’re not in Silicon Valley. I think that hurt us.

What’s next for you?

I’ve got a long “Honey Do” list of things I haven’t done in the last seven years. I’m going to take three or four months off, and I’ll probably start looking sometime in October. I’ll probably start to look small, which means probably not a public company. I’ve consciously decided I don’t even want to talk to anybody for two or three months.