Leadership

Leadership Advice of Micrel CEO Ray Zinn, a “Man for all Seasons” in Business

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Editor’s note: This interview in SandHill’s leadership series profiles Ray Zinn, who founded semiconductor company Micrel in 1978 years ago in Silicon Valley – without venture capital funding – and led it from startup days to a company with almost a quarter billion dollars annual revenue. During his tenure as president and CEO for 37 years, Micrel was profitable every year except for one during the dot-com implosion. The company was acquired in May 2015 by Microchip Technology. 

This is Part 2 of a two-part article. Click here to read Part 1. 

Q: As CEO of the same company for 37 years, you’re definitely an enduring CEO. During that time you’ve managed a lot of dynamic situations with recessions, changing market demands, new competitors, new technologies, new customer expectations and more. How have you endured through so many diverse situations? 

Ray ZinnRay Zinn: I kind of think of myself as being like a Navy Seal. If you look at the training they go through, the adversity that they have to deal with, they tackle projects and programs that none of us would even attempt. They’ve proven that they can endure extreme hardship. That’s the key in running a company – to have kind of a Navy Seal mentality that you can endure, irrespective of downturns and complexities and technologies, etc. You can handle it because you’re confident in your people, confident in your business, you have a strong business model, you don’t get yourself in trouble and you anticipate difficulties. I hope for the best and plan for the worst. 

Q: A lot of times the turnover in CEOs is about every year or two. And sometimes CEOs with certain capabilities are hired for a season because they have the skills or experience for a particular circumstance, situation or season in a company’s life. But you seem to have been a “man for all seasons” at Micrel. If a CEO wants to be like you, “a man for all seasons” or situations, what are the top attributes that CEO needs? 

Ray Zinn: To be a CEO for all seasons, you have to be malleable and flexible. If you’re brought in as a turnaround CEO, then you know that you’re not going to be there very long because to be a turnaround CEO you’re going to have to do things that are unpopular. So while you look good for a year or two, you’re not going to look good for the long term. You have to be careful when you’re brought in as a turnaround CEO because the expectation is that you’re not going to take 10 years to turn it around. Your responsibility is to turn it around in a year or less. And if you don’t do that, then you’re going to be out. 

If you want to be a CEO for all seasons, you have to look like you’re a long-term player, not an in-and-out type person. The CEOs that are long term, like Larry Ellison, build enduring companies. They are enduring because they make money and they have a relatively stable workforce. 

Q: These days many startups don’t have a long-term vision and focus instead on being acquired. How did you manage to be a CEO for all seasons even when Micrel was a startup and had no venture capital funding? 

Ray Zinn: To be a CEO for all seasons in that environment, you have to have people on board with a long-term view, not in for quick money and out. That’s not an easy thing to do because we tend to be a microwave kind of generation and we want what we want now. 

When I started Micrel and began to bring people on board, I told them about stock options and they were excited about it. It was difficult to keep them focused on running the company because they kept asking “When are we going to go public” or “When do we get liquid?” It became a difficult challenge for me to keep them focused on running the business and not worrying about cashing out. 

It takes a CEO with a strong arm to convince employees to stay on and slug it out when their friends in other companies that are going public are buying new houses and fancy cars and that sort of thing. I told them to just squirrel away the money and save and be frugal and don’t worry about how much money you’re going to make or when you’re going to make it. Worry more about being successful and getting the company to a certain point. And then we can talk about going to the next step. In other words, give them short-term goals that merge into long-term goals. 

Q: Do you have advice for other CEOs about exiting a business? Is there something that you’re learning in this particular season of your life as a CEO? 

Ray Zinn: Yes. Be careful in selecting your board of directors. I wish I’d had a board of directors that could see the vision of Micrel continuing on its journey. Our board jumped on the M&A bandwagon that is so prevalent in the market today. And of course the activist shareholders didn’t help. I would have liked to be able to keep my company together and build it into a forever company. But with all the mergers and acquisitions going on, it precluded me from doing that.   

Q: As CEO for 37 years, you never had to do a pivot or change your vision? 

Ray Zinn: We never lost our vision at Micrel. We always understood who we are, and we didn’t try to pretend we’re somebody we’re not. I think the only way I could have stayed as CEO for 37 years is by not changing who Micrel is. The CEO has to be able to maneuver, but that doesn’t mean changing who the company is. 

If you lose your vision, you’re going to fail. That has happened to some software companies that were once highly stable. When they lose sense of who the company is, they end up with problems. You see CEOs going in and out who can’t make up their mind as to how they want to run the company. 

Look at non-software companies for example. Montgomery Ward. Knocked out by Sears. Now look at what’s happening to Sears. Costco and other wholesale companies are doing Sears in, and Sears keeps changing its identity. 

A lot of companies face identity problems; and when they get into trouble, they take on massive amounts of debt. I think the key to success is getting people to understand who the company is and how it can compete, as opposed to thinking “We need to change.” What sounds good is not necessarily what’s best. 

Q: Is there anything you always wanted to do that you haven’t done yet? 

Ray Zinn: I wanted to write a book, and I finally did that last year. 

Q: What’s next for you when you retire from Micrel next month? You’ve already written your book. 

Ray Zinn: Once you write a book, it becomes kind of a franchise. If you want to have a successful book, you have to market the living daylights out of it. Once you do that and put money into it, it’s like putting money into a company and you don’t want to walk away. 

So I’ll be heading in a different direction and looking at opportunities that allow me to pass on what I’ve learned. Hopefully I’ll give the next-generation the benefit of my 37 years of experience. I’m the longest-serving CEO ever in Silicon Valley, so I have some credentials that maybe some of them will listen to and want to learn. And maybe we can build some better companies. I don’t expect to make money on this. I want to do it because it’s the Micrel way – I really want to help other people. It might sound hokey, but my goal is to help people become better – not necessarily wealthier, but better at what they do. 

This is Part 2 of a two-part article. Click here to read Part 1. His book, “Tough Things First,” (McGraw Hill) comes out November 6, 2015. 

Ray Zinn is an inventor, entrepreneur and the longest-serving CEO of a publicly traded company in Silicon Valley. Zinn is known best for conceptualizing and, in effect, inventing the Wafer Stepper and for co-founding semiconductor company Micrel (acquired by Microchip in 2015). He served as CEO, chairman of its board of directors and president since the company’s inception in 1978. Zinn has been mentioned in several books including “Essentialism” by Greg McKeown. 

Kathleen Goolsby is managing editor of SandHill.com. 

 

 

 

 

 

 

 

 

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