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HTC CEO e-mail: We need to kill bureaucracy

In an e-mail sent to the whole company, HTC's CEO urges everyone to eliminate bureaucracy because it's slowing them down, and making them uncompetitive. The CEO asks employees to focus more on innovation to escape these short term challenges.
August 16, 2012

Since last year, things haven’t been going so well for HTC, and it keeps getting worse with them losing both sales and market value, in addition to forced withdrawal from certain countries. In an e-mail to HTC’s board and its employee, the CEO of HTC, Peter Chou, said that bureaucracy is what’s hurting the company, by making them slow to react to competitors.

“We have people in meeting and talking all the time but without decision, strategic direction or sense of urgency,” Chou wrote to HTC’s workers, Chairwoman Cher Wang and the board of directors in an e-mail obtained by Bloomberg News. “Bureaucracy crept in without clear ownership. We agreed to do something but we either didn’t do it or executed it poorly.”

Even though the smartphone market has been growing, HTC has been losing a lot of market share, and it’s getting tougher to compete with companies that can operate on larger scales.

The HTC CEO says that the company needs to continue building on its culture, using committed employees and customer relationships. By culture, I assume he’s referring to the culture of innovation they used to have back in 2010 and before. But once they started growing by 93% in 2010, and then by 67% in 2011, they started leaning a lot less on innovation. There was a lot more on selling multiple versions of the same phone everywhere. That’s why their sales dropped by 31% in the first half of this year.

But HTC’s CEO is hoping for a comeback later this year and early next year, with new best-in-class products:

“Don’t let the processes, rules and norms to impact our important goals,” he wrote. “Of course we have to follow certain rules and criteria but don’t let small things kill the major goals.”

“The industry’s best rating” for HTC’s One X handset is evidence the company has the best products, Chou believes. “There are also strong products in the pipeline for this year and early next year“, Chou wrote without naming them.

At the end of his e-mail he reassures his employees that the challenges are just short term, and asks them to kill the bureaucracy in the company, while focusing harder on hero innovations.

“Please make sure that we kill bureaucracy. Stay firm with the heroic innovations and make them even bigger and deliver them.”