Marvell: A Cultural Turnaround Story

"There was a fairly rapid timeline ... a start date of July 11th when I joined and product review in the third week of August. We had a board meeting in September where I outlined to the board, ‘here's the strategic framework we're considering.'"

— Matt Murphy, CEO Marvell Technology since 2016

Introduction

Marvell Technology Group was founded by Sehat Sutardja (CEO), his wife Weili Dai (president) and brother Pantas Sutardja (CTO) in 1995. The three had grown the organization into a multibillion-dollar company with over 7,000 employees. At one point in 2006, the company’s share price was $35. In 2016, following years of overly centralized management, lack of proper controls and processes, and a patent infringement lawsuit brought by Carnegie Mellon University in 2009 (which was settled in 2016), Marvell faced a further onslaught as it came under investigation by the U.S. Securities and Exchange Commission (SEC) for fraudulent revenue recognition. As the stock price fell to $8, Starboard Value, an activist investor, disclosed a stake in Marvell, claiming its shares were undervalued. Facing a massive loss of confidence in the company, the founders stepped down as officers in April 2016, though remained as board members until the Company’s next shareholder meeting. As agreed with Starboard, the board appointed a new chairman, Rick Hill, who would work to rebuild the company’s executive management, including hiring CEO Matt Murphy. Murphy’s challenge ahead was huge: would he be able to save Marvell from irrelevance in the hypercompetitive semiconductor industry?