Editor’s note: This interview in SandHill’s leadership series profiles Ray Zinn, who founded semiconductor company Micrel in 1978 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 1 of a two-part article. Click here to read Part 2.
Q: In your early years, did you think of yourself as an entrepreneur?
Ray Zinn: Yes, I did. When I was 15, working on my father’s cattle ranch, I thought maybe someday I would take over his business. But it’s located at the Mexican border in California, and it was so blasted hot that I couldn’t see myself living there. So upon graduating from college, I took a regular job and then started my career. But I always wanted to work on my own or at least run my own company.
Q: Did you always feel confident about that? Was there a time when you thought running a company was kind of a risky thing to do?
Ray Zinn: I know this may sound strange, but no. My father ran his own business, so I didn’t come from a family where risk was an issue. My father invested a lot of money in his cattle ranch business and went bankrupt. He became quite ill as a consequence of the difficulties in his business. If anything, you would think that would frighten me, but it didn’t. When he passed away, my mother was virtually bankrupt and still had nine children left at home and had to go back to teaching school.
I also had an “aha” moment in 1971 about risk-taking. During a business trip in Singapore, I went to a place called Change Alley, with a lot of little shops. I was very impressed that they could earn a living without any education and without support from their government and just did this on their own. I thought, wow, if those guys can do that, I can do it.
I did well in the real estate business in 1974 and squirreled away a lot of my money. So I was ready when the time came in 1976 when I left a job and told my wife, “I’m never going to work for anybody ever again.” And from June 1976 to today, no one signed my paycheck but me.
Q: You left several jobs prior to founding Micrel because you didn’t like how those companies were run. What traits do you possess that makes you able to build a company where your employees like what you’re doing and want to stay?
Ray Zinn: I just didn’t get along well in a company environment where I really didn’t have any say. That’s one of the things that prompted me to start Micrel. I wanted to allow all my employees to be entrepreneurs, meaning that they were empowered to do their job as opposed to my telling them exactly what to do and how to do it.
I found that working for other companies in the way they were structured was so restrictive and had too many rules and regulations and boundaries for really thinking outside the box and being able to really stretch yourself. To me, if you just do what everybody else does, you’re just in the box and you’re not going to compete very well. You have to actually be able to see beyond the horizon, beyond the impossible. As a leader, that vision has to be there. You actually have to see it just like a movie. Your understanding of the direction you want to go has to be clear in your mind. I think that was a real strength for me. I could see where to go; I can see the future.
Q: Do you think your ability to see the future is your greatest strength as a leader?
Ray Zinn: I think a good leader is one who excites employees, investors and the board. The way you do that is for the CEO to have a vision for the company and be able to articulate that in a way that you get other people on board. That’s how you attract the best people. What leaders do is get people on board.
But it’s not just articulating the vision. They have to believe in the CEO as a trusted leader. The way you build that trust is through integrity. Integrity is doing what’s right when nobody is watching. They flock to that as something they want to be part of.
Q: You commented in a video that one cannot succeed as a leader just by trying. When did you come to that realization? What happened, and did it happen as you were a leader, or was it an attitude you gained while growing up?
Ray Zinn: I think it’s an attitude I grew up with. We’re just a sum total of all of our experiences. I grew up in a large family and had to take on a lot of responsibility being the oldest of 11 children. My parents were not well off. So we had to pull together and there was a lot of give and take. I often felt like Cinderella. My mother gave me all the tough tasks to do. I accepted doing the tough things as being part of life. I never expect things to be easy. As a teenager, I was getting up in the night to pull water to irrigate our fields, then still had to get up and do chores and go to school.
Q: You learned a lot from both of your parents about discipline. How is a CEO who is so disciplined and believes so strongly in discipline also able to be flexible and make sure a company operates with agility?
Ray Zinn: I think discipline brings agility. I wrote a book, “Tough Things First,” coming out in November, which discusses the principle of doing tough things first and getting them out of the way. Most people don’t like to do the tough things. What keeps us from being flexible is the fact that we procrastinate doing the tough things. But they’re still going to be there and still have to be done. By going ahead and doing them, you have free time. I think that allows you to be flexible and think outside the box because you’re not constrained, thinking, “I have to get on to this other project” or “I have to get this other thing done.” That really minimizes your ability to be flexible, creative and think outside the box.
Q: You commented in an email to me that Silicon Valley is now really Software Valley and where would the software industry be without the semiconductor industry. Does it dismay you that this happened?
Ray Zinn: Even though I’m sad to see it happen, it’s a natural artifact of the cost of doing business in California and especially in Silicon Valley. I can’t blame semiconductor businesses for moving out of Silicon Valley and outsourcing their manufacturing. Wages here are much higher than they are around the rest of the world. So to compete on the world stage you have to move your manufacturing to other areas. What you have left is smart people. If you look at a software company, that’s mainly people and not manufacturing. That naturally led more to software kind of technology as opposed to manufacturing semiconductor technology.
I think the semiconductor industry enabled software businesses to blossom in the Valley. The semiconductor industry attracted good schools and good people to the Valley. That allowed the building of software companies. I think semiconductor technologies also allowed the capability of software to be enhanced because of the electronic circuit. It really has been the mainstay of technological development and then promulgated into software requirements for electronic products.
Q: In an article I read, you said “I’ve seen it all” through the years. From a leadership aspect, what’s the best you’ve seen in leadership other than your own success as CEO of the same company for 37 years?
Ray Zinn: The best I see among leaders are leaders who actually try to help people become better people, not necessarily try to make them rich. Each Friday anybody on my staff who wants to give a talk in our operations meeting and stimulate the people to think outside the box and think about how to improve as a person may. When people join the company, I tell them I’m not here to make them rich; I’m here to help them become a better person because better people make better employees. That resonates with people.
The best leaders really care about their people. And I don’t hire people who don’t care about people. Without good people, Micrel would not have succeeded.
Q: Other than caring about people, what attributes do you look for in the people you hire?
Ray Zinn: I try to hire the best – not stars, but the best kind of people – people with high integrity, people who are respectful to other people, who will do whatever it takes and who are honest in their dealings with employees, customers and vendors.
This is Part 1 of a two-part article. Click here to read Part 2. 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.