The real lesson of the Xbox failures.

The news last month that Microsoft Corp. will take more than $1 billion in charges to fix Xbox 360 consoles suffering from "widespread hardware failures" did nothing to abate the scorn of the anti lead-free crowd. In fact, as Seattle's most famous software firm scrambles to fix the console's reported heat dissipation problems, Internet boards are afire with accusations that the failures are a result of lead-free solder.

Just for fun, let's say they are. Does that neutralize the tens of millions of electronics devices built with lead-free solder that have not failed in the field? Should it?

I don't think so. Wherever the truth may lie, the unequivocal lesson is that it underscores the importance of proper design and process optimization, no matter what materials are used. Lead-free solder may (or may not) have contributed to the Xbox failures. But poor design was clearly the culprit.

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Speaking of failing by design, the news that Pierre de Villemejane would step down as president of Speedline Technologies raises the nagging question of from where, exactly, the next generation of industry leaders will come. While we often worry about the purported lack of young engineering talent entering the field, we just as often ignore the next generation of managerial stars. I have spoken with a number of his competitors and colleagues over the years, and all agree that de Villemejane belongs in that elite group.

De Villemejane is young (40) and coming off a heart-pounding triumph, having led Speedline's turnaround from a money-leaking orphan within Cookson Electronics into a thriving enterprise (I estimate its sales were in the neighborhood of $200 million last year) purchased in 2006 by conglomerate ITW. He is an extraordinarily personable and approachable executive. He was also one of the few people (close to) my age heading a major electronics manufacturing OEM.

While I would bet dollars to donuts ITW replaces de Villemejane with an indoctrinated disciple of its battle-tested 80/20 formula, I am seeing the makings of a modest trend away from the finance manager-turned-chief executive toward engineers running OEMs again.

Be it Bengt Broman (electrical), who earlier this year took on the top spot at Mydata Automation; or Aaron Saxton (industrial), the newly minted leader at Vitronics-Soltec; or Bruce Hueners (mechanical), Palomar Technologies's president since the beginning of last year; or John Byers (also mechanical), president of Asymtek since 2006, we are seeing those with engineering backgrounds singled out for the executive ranks. One big reason is the much-noted need for Western companies to be great innovators.

Whereas the U.S. and much of Western Europe cannot beat the East on price alone, the natural response to the competitiveness imbalance is innovation and a lot of it. Innovation's corollary, perhaps its antecedent, is resource investment and allocation. And that requires topnotch management. In the West, the ability to lead is a tremendous national strength, and not one that has come about quickly or by chance.

Innovation can mean many things, and one of them most certainly isn't just throwing money at R & D. Sure, we admire companies that dream up great products. But for every Apple, dozens of less-publicized firms design and develop elegant processes, often for internal use only, but that cut costs just enough to help the company make it another day. Sometimes what makes a good company great is more than just superb marketing; behind all the sizzle, there's an actual steak to be had. Behind any successful business, there's a certain amount of luck. The long-term survivors, however, have the right complement of men and women at the top to sort out which programs have merit. As electronics manufacturing programs become ever more expensive and technical, engineers are better suited to make those calls.

While the board's renewed interest in engineers--who for some reason are considered the smartest folks in the room, only until they actually start working for a living--is encouraging, what gnaws at me is that most of the industry lacks a grooming process for younger would-be executives. Ironically, those companies that have such a program tend to be the largest, the Dovers and the ITWs, but in most (but not all) cases, the chosen ones come from the financial or sales ranks, not engineering. A friend of mine recently observed, It's a lot easier to teach an engineer business than to teach an accountant engineering. Unfortunately, that's a lesson not often remembered.

In the end, smart companies are designing their futures not just by devising and building a full line card of products and services, but by training top personnel from all ranks to become tomorrow's leaders. And tomorrow, the saying goes, will be here sooner than you think.

Mike Buetow, Editor-in-Chief

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