Smooth Man, Smooth Plan

William J. Amelio, Lenovo's newly installed CEO, is one cool cat. Well-groomed, poised and composed. Even when he splits his lips with a chiseled smile, you know he's all business. He has a certain edge to him, and he wants the same for his company.

Edginess. Agility. Efficiency. These will be the hallmarks of Amelio's tenure. And he needs those qualities if Lenovo is to achieve his ultimate goals: growing global market share 10 percent by 2008, displacing Dell's market leadership and breaking free of big cousin IBM.

"Dell has metrics down to a science, which we have to get down to," Amelio says. There's a sense of edginess across the company; it's present everywhere at Dell. There are pockets here [at Lenovo] and we get that sense of urgency. Now that we've broken away from IBM, you're going to see more edginess."

And that's one of the differences between Amelio and his predecessor, Steve Ward. Some say Ward was ousted because Lenovo's growth and brand recognition weren't happening fast enough. Where Ward, a career IBM guy, was staid, Amelio looks to push the envelope.

At my meeting with him at IBM's PartnerWorld conference last month, Amelio telegraphed a bit of that edginess: The company is shedding 5 percent of its global workforce, relocating its headquarters to North Carolina, away from the IBM nest in New York, and overhauling its entire channel program.

While the restructuring will cost Lenovo $100 million, Amelio clearly believes it will strengthen the company's long-term position.

And though Amelio seeks to emulate Dell in its edginess, he's clear that he has no intentions of replicating the PC company's direct-sales business model. In fact, Lenovo's newly minted channel program is designed to make Lenovo resellers more competitive, decrease channel conflict and drive growth.

To squeeze out a few more points for Lenovo's channel, he wants to reduce reseller inventories from four to two weeks and transform Lenovo's distributors from product warehouses to logistical fulfillment partners. The goal is near-real-time fulfillment, which means Lenovo produces only the product its partners can sell.

"If we don't find the most efficient route to market, we'll end up getting beat," Amelio says. "It's just a matter of time."

IBM's ThinkPad is the cornerstone of Lenovo, but the Chinese company's agreement with Big Blue to use its well-known "eight-bar" logo expires in just four years--and it appears that Amelio wants to pare down even that time frame. Lenovo has spent millions of dollars on branding advertising, and its release of low-end, low-cost Lenovo-only notebooks and desktops shows that it's feeling more confidence in its name. Lenovo's market research shows that consumer consideration is in the 60 percent range--not bad for a brand that didn't exist in the U.S. market a little more than a year ago.

But shedding the IBM logo comes at a cost. Amelio knows he has to build up Lenovo's brand awareness through innovative products, creative marketing and superior channel programs. Otherwise, the Lenovo brand could wither.

"Over time, as we build up the Lenovo brand, [the IBM logo] will become less of an issue because people will buy ThinkPad," Amelio says. "Is the team a little nervous? Of course. They're comfortable with the IBM logo; it's been there a long time. But the more reliance you have on the mother ship, the more difficult it is to drive accountability within your own company."

Amelio is a cool guy, yes. But just watch how fast he can heat things up.

Lawrence M. Walsh ([email protected]) is the editor of VARBusiness and GovernmentVAR magazines. Listen to his podcast interviews at www.varbusiness.com/podcast. Also, read his new blog, Tidal Waves.