An Ecosystem of Giants — Steve Mollenkopf, CEO Qualcomm

Systems Leadership — April 9, 2019

Robert Siegel
Apr 19 · 4 min read

Our session on ecosystems with Steve Mollenkopf built on our Samsung session and provided insights on one of the most dynamic and competitive markets we have studied to date. As Mollenkopf highlighted in our class, the ability to provide the right technology at the right time is existential for component suppliers in the mobile space — if a company gets it wrong on a technology transition, they can cease to exist in the future. And with the need for worldwide scale to be competitive, Systems Leaders need to know how to manage internal technology development as well as relationships with customers, suppliers, competitors and governments — all of whom are playing at immense size and scale.

In the case of Qualcomm, the complexity of effectively managing their ecosystem was the perfect study for exploring the opportunities and risks of a market that exists at a size and scope rarely seen in business.

The Government Is Present — Sometimes by Choice

Historically, Silicon Valley and West Coast technology companies have preferred a Libertarian approach to government — commercial organizations would like to make and sell products and largely be left alone from the machinations of regulation and oversight. Clearly, “Big Tech” in the United States has a changed relationship with Washington since the 2016 election and issues around privacy have come to the forefront.

In the telecommunications arena, government involvement has been present since the earliest days, if only due to issues around spectrum allocation and management for carriers. But in the last decade, government engagement has become required for many parts of the telecommunication stack — from handset makers and component suppliers around IP enforcement (e.g. Apple vs. Samsung and Apple vs. Qualcomm) as well as issues around national industrial policy and interest (e.g. the recent controversies surrounding Huawei).

One thing we took away from Mollenkopf’s perspective was his calm understanding of the role governments play in the markets in which Qualcomm participates. There are times when a particular country’s national policies shape the actions and options of global companies, and Systems Leaders must have a realistic understanding of how large forces influence a firm’s decisions and opportunities. When dealing with digital + industrial transformations, Systems Leaders need to focus on those things that they can shape and not get wrapped up in things that are beyond their control. Sometimes those forces work to a company’s advantage, and sometimes they require a company to shift directions. Regardless, a good Systems Leader is ready and prepared for the inevitable ebbs and flows that come with doing business on a strategic global basis.

Risk/Reward and Investing Ahead of Big Things

When investing in a new generation of products years before they come to market will either make or break a company (Mollenkopf highlighted a litany of former competitors who are no longer around as each missed various technological transitions), Systems Leaders are often competing in arenas where the enormous rewards for success or commensurate with the huge risks they are taking. As such, much of the battles between companies at these levels are less about moral challenges and are often fights over profit pools and economic rents in a market.

One point Mollenkopf made is that Systems Leaders have to like competing — they have to enjoy the ability to achieve great outcomes and the challenges that come with these battles. When each new product that is being developed will keep a company afloat and people employed (or not), Systems Leaders have to want to be in situations where they are not phased by the extreme ups and downs that come from working at the level and economics risks that come in these situations.

And when others in an ecosystem are also taking major economic risks (and seeking the commensurate economic returns), Systems Leaders have to anticipate fierce battles and be able to recover from setbacks.

Systems Leaders Need a Thick Skin

One thing we took away from Mollenkopf’s session was the incredible control he had of his emotions. Not that he isn’t open in his opinions; on the contrary. Rather, it was clear that he has thought through the dynamics of his market, he understands what is driving both Qualcomm and the various other players in his ecosystem, and he has internalized the need to stay focused on Qualcomm’s goals and objectives.

When one is competing in a business with such high stakes, the battles in the press, the courtrooms and the Board rooms are neither easy nor soft. Systems Leaders need to remain maniacally focused on what is best for shareholders, but also need to understand how things are playing out on a global basis, and need to be malleable enough to adapt to shifting situations. The ability to constrain responses to given stimuli, compartmentalize problems, and develop a thick skin, is a necessary requirement when the competition will be tough, competent and competing for these large economic opportunities.

Fortitude Group

Musings on Digital and Physical, Teaching, Venture Capital and Socioeconomics

Robert Siegel

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Lecturer @StanfordGSB, Seed-stage VC @XSeedCapital, @Cal undergrad, hockey/soccer fan, husband and father

Fortitude Group

Musings on Digital and Physical, Teaching, Venture Capital and Socioeconomics