Discipline That Can't Tell The Difference

CEOs focused on building will be faced with strategic decisions. Business is booming, so you sign the lease on that expansion. You’re certain growth will keep pace with the lease. It didn't.

A big contract stalled, another renewed at half the volume, and the number on the P&L that used to feel like ambition started to feel like a mistake. In a bit of a panic, hiring freezes, ad spend gets cut, and you call it “tightening the belt.” It feels safe, except one part of the business just had its best month ever, run by the newest hires on the payroll, and the freeze catches them too. The correction meant to fix the mistake starts eating the part of the business that was never the mistake.

Building ahead of demand is a known failure; most owners that have been burned once know to watch for it. What’s easier to miss is when the discipline built to course-correct turns into a reflex that can’t distinguish the failed bet from the bet that is paying off right now.

A company just posted the quarter that proves its second bet worked. It had already cut people from that same team.

On July 23, 2026, Intel reported quarterly revenue growth of 25% year over year, its fastest pace in more than fifteen years, powered by growth in the Data Center and AI Group. CEO Lip-Bu Tan told investors that AI demand was outpacing supply. Three days earlier, Benzinga reported that Intel had confirmed a fresh round of layoffs inside that same Data Center and AI Group.

The company would not say how many jobs; only that the division was being realigned around "the right roles and skills in place to position the business for long-term success." It is the newest cut inside a restructuring that Intel's own annual filings show has already taken roughly 40,000 people off the payroll over two years.

The strategic restructuring goes back five years. In March 2021, five weeks into the job, CEO Pat Gelsinger announced "IDM 2.0," a plan built on the belief that Intel could keep manufacturing its own chips and also become a contract foundry for outside customers, backed by new fabrication investment in Arizona. The following year Intel added a much larger wager: a semiconductor mega-site in Magdeburg, Germany, later expanded with the German government's backing, plus an assembly and test plant near Wrocław, Poland. Both were financed years ahead of the customer contracts that were supposed to fill them.

The customers Gelsinger was counting on never signed at the scale the plan needed. Intel reported a $1.6 billion net loss for the second quarter of 2024, announced more than 15,000 layoffs, and suspended its dividend. Gelsinger paused the German and Polish projects that fall; three months later, on December 2, 2024, Intel's board pushed him into retirement.

Lip-Bu Tan took over that March and named the pattern in his own words within weeks. In an April 2025 letter to employees, he wrote that Intel had become "too slow, too complex, and too set in our ways," and that the most important measure for many managers had become the size of their teams rather than what they shipped. By July, in a second letter, he went further: Intel, he wrote, had "invested too much, too soon, without adequate demand," leaving its factory footprint "needlessly fragmented and underutilized." He canceled Magdeburg and Wrocław outright and told staff there would be "no more blank checks."

That is the same discipline still running in July 2026, and it doesn’t appear to distinguish between the factories nobody wanted and the division that just delivered Intel's best growth in fifteen years.

The miss in Strategy wasn’t because it was a weak element. The real miss started in Market. Committing to new capacity in 2021 and 2022, ahead of confirmed foundry customers, was a bet that demand would arrive on the capital's timeline rather than its own. Finance carried out the ripple effect in installments: the 2024 loss and layoffs and the 2025 cancellations came on the schedule the market set rather than the original assumed plan, years after the executive that signed the commitment had left the building.

Leadership and Execution are where the current tensions lie.

Tan's answer to the deficiency he inherited looks uniform. Given the culture he described, that correction was overdue. But Leadership that cannot distinguish the teams in Execution that aren’t producing from those that just delivered the company's best growth in recent memory is a different kind of miss. This compromises trust with the engineers and salespeople that make up the exact unit the rest of the business is now counting on.

The earnings release says one thing about the Data Center and AI Group; the layoff notice, filed three days earlier, says another. When two truths conflict in the same week, the Vital6 is trying to give a warning.

Tensions like this make a harder impact in smaller-scale companies. Maybe it was the associate you hired last spring, now finally closing deals, or the second location you kept funding through two slow quarters because you believed in it. Then cash got tight somewhere else in the business, and sweeping corrections touched parts that were never the issue. A blanket correction is simpler to announce than a targeted one. But at what cost?

Avoiding analysis paralysis can be a strength in Strategy, but decisions without discernment can be reckless. Facing an overdue correction avoids a deeper crisis, but doing so requires precision to identify the root cause and act surgically. Coordinated moves with consideration to the whole company maintain balance rather than introducing new chaos.

If you want a diagnostic read on where your business is strong and where there’s drag that deserves your attention, that's what the Vital6 Assessment is built to surface.

Want to go deep on the Vital6? I wrote a book about it.