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Tough Things First
15 minutes | Oct 6, 2021
Machines are made-up of cogs. But if you spend all you time looking a cogs, you have no idea if the machine as a whole is running right. Ray Zinn educates us on how business leaders should focus. Guy Smith: Hello everybody, and welcome to another episode of the, Tough Things First Podcast. My name is Guy Smith, I’m your host for today. And as always, we are seeking, exploring, digging out the wisdom and experience of Silicon Valley’s longest serving CEO, Mr. Ray Zinn. We’ll just start off by saying hello, Ray. Good to talk to you again. Ray Zinn: Wow, Guy. Good to hear your voice again. Good to be with you today. Guy Smith: Always a joy to be with you. One thing which… And the topic today is of keen interest to me, and that’s how a leader, a CEO in particular, needs to view their organization. In the high-tech industry, where both you and I come from, a lot of CEOs come from the technical ranks. They’re used to looking at details, and in that respect they may tend to be looking at the machinery at the cog level, instead of at the overall machine level. I want you to talk for a minute about how in Oregon, how a leader views the organization and how they can simultaneously be worried about the overall machine, as well as paying attention to the necessary cogs. Ray Zinn: Well, it’s a matter of understanding, as we say, the white stuff and the chicken manure. So, you just have to be able to not get down in the minutia, but be able to step back and look at your company as a machine, as opposed to looking at it as a bunch of gears and bends, and wires and so forth. So, is your machine functioning? In other words, what’s coming in is improved as it goes out. In other words, are you actually getting out really what you’re wanting? And that’s the key, is what kind of machine is it that your company is? Are you a washing machine? Are you a refrigerator, or what is it you’re trying to do? So, that’s the machine that you’re referring to. Now, you want to pay attention to the cogs, or to the teeth on the gear, because if that tooth is missing, it’s going to grind the machine to a halt. And so, we do want to make sure that all of the teeth of the machine or the gears are in place, and that they’re meshing properly, and they’re doing their proper job. But just looking at the gear, it doesn’t tell you if your machine is still pumping out what it is supposed to be producing. There’s many, many gears in the machine, as you would, and depending upon which gear you’re focused on, it could be running great, but there could be another gear in the chain that’s got broken teeth or out of mesh, and that’s not producing what you expect. Whether that be you want a good human relations department, a good accounting department, a good marketing department, good sales department, production, they all fit together as a part of the machine. Guy Smith: Well, let’s talk about this in terms of a growing company and what kind of outputs a CEO needs to change their view on. When they start off and they have maybe 10 employees, they can look at every cog in the machine every hour of the day, and know that they have a hands-on. But when they get up to 1000 employees, they don’t have that luxury. So, of course the obvious thing is that you start delegating, but how do you change the outputs that you’re looking at, in order to make sure that all the cogs still have all the teeth? Ray Zinn: Well, I’m back to what I talked about in the beginning. What is it you’re trying to produce? And so, if what’s coming off down the line is what you’re expecting, and it’s got the quality and the reliability and so forth that you’re trying to produce, then your machine is functioning fine. As long as it’s done in a cost effective way. So, when things start breaking down, that’s when you have to step back and say, okay. Where is this machine failing? In other words, what part of it is grinding to a halt? I was talking to my son the other day, who has changed jobs, he now works for another company, and he said, “Dad. The difference between the two companies, the one I previously worked for and the company I work for now is, they get things done quick. I mean, it doesn’t take two or three weeks to make a decision. They make decisions within hours.” And I thought that was interesting, that he enjoyed that. He enjoyed working for a company that made decisions quickly, as opposed to having to go through endless meetings, and endless repeating of the same story to get something done. It’s almost like they’re afraid to make a decision. I was talking to another cohort of mine, another associate, just yesterday, and he was talking about working with the Japanese. He says they just take forever to make a decision. And I thought, wow, that’s interesting. And I started thinking about that, and I said, “Well, I think the different is, is that the Japanese, when they make a commitment, they stand behind it 100%.” And so, when they make a commitment, they absolutely want to make sure it’s the right one. Whereas maybe in the US, we make a commitment, but it only lasts five minutes. So, we can make decisions quicker because we’re not going to stand behind them as long. So, as they say, look before you leap and he who hesitates has lost. So, it depends again, what is the best for your particular business? And so, we don’t want to judge everybody by the same metric. Guy Smith: And you made an excellent point in your book, Tough Things First, and for anyone in the audience who has not read Tough Things First, that really needs to be what you do the moment you finish listening to this podcast. It is arguably the top shelf business book for reading. But in your book, you discuss the trade-off between the timeliness of the decision and the quality of the decision, and you cited a former military chief of staff, Colin Powell, who at one time, and I’ll probably get the number wrong, but he said something along the lines of, you study a problem until you have 60% of all the information that you need to make a perfect decision. And then you go with your gut. You let your intuition guide the rest of the process. And to him, that was the right way to make a high quality decision, but not suffer analysis paralysis and never get around to actually making a decision. Ray Zinn: Yeah. I mentioned the culture difference between the Japanese and Americans. Americans, they don’t stand behind their commitments to the degree the Japanese do. So, the Japanese will just take longer to come to a decision, and that’s just the culture of that country. Whereas in the US, we make decisions quicker, but we don’t stand behind them as long. So, we change governments, or we change politicians like we change our shorts. So, there in Japan, they don’t. They stay with something for a longer period of time. So, each culture is different. You have to work within each culture, and operate within the culture of that particular industry, or company, or country. So, you’ve got to be flexible and say, blessed are the flexible for they shall not get bent out of shape. Flexibility is also a key part of running a good machine. If you design some tolerances so tight, that there’s no flexibility, then when something does get out of the line, it shuts the thing down. Whereas if you build a machine so it has some flexibility in it, so that if there’s a little bit of a mismatching, as you would, the thing still keeps producing. That may be the best way or course for your particular company. Guy Smith: All right. Now, in Silicon valley where you and I have spent pretty much our entire careers, we have businesses that go from almost nobody, two guys in a garage, to being thousands of employees. What one bit of wisdom would you give somebody who is sitting atop of a rapidly growing business, in terms of how to keep their proper focus on the machine? What’s the one big thing that they’re probably going to mess up on and how do they avoid messing up? Ray Zinn: Well, the title of my book, learn to do the Tough Things First. I don’t care whether you’re running a one-pot organization, or tens of thousands of people. If you learn to do tough things first, you will most likely succeed, whether you’re a small business or a large business. Doing the tough things first is learning to love the things you hate. In other words, get used to doing things you don’t like doing, and then do them well. That’s discipline. And so, the one single thing that I think that would help you, whether you’re just a one person operation or tens of thousands of people is, learn to do the tough things first. That filters down through your entire operation, is how well you deal with the difficult tasks. Because the outcome of that, if you don’t do that, is procrastination. And so, we all know what procrastination is, one of the worst words in the dictionary, because you’re putting off tomorrow what you should have done instantly today. Guy Smith: I absolutely believe in that, because there’s nothing worse in the world than having something hanging over your head until tomorrow. And my routine is that I, like any human being, have an occasional propensity to procrastinate, and I just say, “Guy, don’t be lazy. Get it done, get it out of the way.” And boy, it frees up a lot of time, and takes a lot of things off of your mind. And if you’ve got 500 employees and you’ve got a tough thing that needs to be moved out of the way, you’re not only cleaning your own house, you’re cleaning the house for all of your employees as well. Ray Zinn: Yep. Get those tough things out of the way, learn to love the things you hate. That’s the key. Guy Smith: That is. Well, thanks again, Ray, as always informative. And again, for the audience, if you have not bought a copy and read a copy of Tough Things First, mandatory reading. Especially all you [inaudible 00:12:03] out in the Silicon Valley in the startup world. This is your Bible for going forward and being a success in business. And Ray has two other books out there. A Zen of Zinn, will spell that. It’s Z-E-N of Z-I-N-N, A Zen of Zinn, and Zen of Zinn two, little golden nuggets, short little sound bites of wisdom, intelligence, insight, and perspective about humanity, leadership, honesty, relationships, management, and this weird thing that we call life. So, by all means, grab those books, put them on your nightstand, or better yet, put it on your desk in the office, read a couple of pages before you get started on your day, and it’s going to give you that inspirational lift as well as some really, really good smarts about running a business. Ray Zinn: And here’s my guarantee. If you pick up and read those books, I promise you, if you put even a fraction of them into action, you’ll be a much better person. This book will be invaluable to you in your life. If you even just put a fraction of those ideas into motion, you’ll become a much better person. That’s my promise. That’s my guarantee, and I’m going to stand behind that. Guy Smith: And I will attest to that because I’ve read both of those books, and I can guarantee you that I walked away with some new insight, and new inspiration, that I did not have before. And it just made going forward in life a little bit better. Ray Zinn: I talked to a person just the other day that said that after reading my book, Zen of Zinn, of course Zen of Zinn two just came out. But after reading Zen of Zinn, she said that she lost her mother recently, and had some difficulties with her siblings over the property, the disposition of the estate. And she says, because she had read Zen of Zinn, she said it made all the difference in the world in how she was able to migrate through losing her mom and dealing with her siblings on disposing of the assets. So, she said she just called to thank me, or actually she emailed me, to thank me for the book. And so, that was a testimony, I really appreciated hearing that. Guy Smith: There you go listeners. There cannot be a better endorsement than that. So, until a couple of weeks from now, when the next episode of the Tough Things First Podcast comes up, we’ll bid you all a good day and thank you for listening. Ray Zinn: Thanks, Guy.
19 minutes | Sep 22, 2021
Every CEO needs to heed their stakeholders. But can any CEO possibly have a company represent the values of every stakeholder. Ray Zinn, Silicon Valley’s longest serving CEO, draws lines between being woke and being overreaching. Guy Smith: Hello, and welcome again to another episode of The Tough Things First podcast. I’m your host today, Guy Smith, and I’m really excited about this topic. It’s one that’s been rummaging around in my head for the last few weeks, and I think it’s one that’s both touchy, but important for anyone who’s in a leadership role in a company, especially for the Chief Executive Officers. So as always, we’re going to be extracting the wisdom of Silicon Valley’s longest serving CEO, Mr. Ray Zinn, and getting his perspective on what I call woke capitalism, this belief that business leaders need to either adapt, conform to, or take a stand on everything political in the world. So, hello, Ray. Good to talk to you again as always. Ray Zinn: Well, hello, Guy. Yes, I know this is not one of those podcasts that I don’t think I’m going to enjoy, but I’m sure you are because it’s like, when did you stop beating your wife podcast. So, let’s go ahead. Guy Smith: I appreciate you taking a tough subject like this. It’s one that you feel like you’re dancing on landmines. You’re almost timid to take one direction or another, but let’s unwind. One of my thoughts about woke capitalism or conscious capitalism, whatever you want to call it, is that this is nothing new, that business leaders doing the right thing has been around as long as capitalism has been. I have done a little bit of reading about George Westinghouse. Back in the days when people were still working seven days a week, he was the first guy to collapse a work week down to five and a half days, which back then was unheard of. But boy, he just was considered a God in his community. His workers thought he was generous and beneficent. They made Westinghouse a household name. So give me your perspective on the relationship of business and society and community in terms of just being aware of a company’s role in all of that. Ray Zinn: Micrel, the company that I ran for 37 years, our culture was honesty, integrity, and dignity of every individual. There was respect for everyone, regardless of race, color, creed, or position. And the last was doing whatever it takes, no excuses. In other words, don’t become a victim. In other words, you’ve got to take control of your project and get it done and not make the company pay for your mistakes as you would. Those are the four cultures that we had, honesty, integrity, dignity, and respect, and doing whatever it takes. So Guy, let me ask you a question. In the cancel culture narrative, should we cancel that? Guy Smith: Yeah, now that’s an interesting question. I think cancel culture has in a way expressed itself as a form of intolerance. And I think respect and tolerance is part of the creed. You may disagree with somebody, but you don’t eliminate them from society for having a different opinion. Ray Zinn: Well again, I thought that was interesting that for 37 years that while I ran my company, Micrel, I had those four cultures, honesty, integrity, dignity, and respect for everyone, irrespective, and then doing whatever it takes. I mean, those were the culture that really gave my company an edge over my competitors. We had the lowest turnover of any company in our industry and the highest boomerang rate, employees returning back to the company once they left, and just the highest morale. It was almost unheard of here in Silicon Valley. So to think about canceling that culture, it doesn’t make any sense. So depends upon the kind of culture that you have and want for your company. This wokeness is just a over used form of you can’t have any form of differentiation, or you’d be considered racist. And as I said, to me, and like Westinghouse, I mean for 37 years, we had every kind of culture you could think of at our company. I mean, we were probably the most multicultural company in the world. I don’t know of a single race or culture that we didn’t have at Micrel. And we all got along and we respected each other. As I said, we didn’t allow any condescending language, no swearing. You couldn’t chew somebody out. You had to treat everybody with dignity and respect. And yet, we still had a differentiation. We still had a men and a women’s restroom. We didn’t combine the restrooms. We kept them separate because we thought that was the safer thing to do. We had certain rooms and doors that people couldn’t go into because they were secured. So we did have employees only, or people in this department only. So, there were some, as you would, discrimination, in a sense of the word, that not everybody could go everywhere they wanted, anywhere they wanted. If you wanted to go into the waver fab facility, you had to put on a bunch of garb. You had to put on a gown and facial coverings, and you had to have your body blown off with air and cleaned. I mean, you just couldn’t walk into the building. There were certain preparation you had to go through. So, there is some discrimination, depending upon the kind of facility that you run and the kind of businesses you’re in. You just can’t have it open so that anybody at any time can do anything they wanted. So even with our great culture, we did have places that certain people couldn’t go, just because there was some control and some restriction that required you to be prepared if you want to enter a certain area. And that’s just the way we are, but to some, that’s called discrimination. And it is, but it’s not a bad discrimination. It’s a practical discrimination. Guy Smith: It’s a functional operational discrimination, as opposed to a societal, cultural, racial discrimination. Ray Zinn: Exactly. But it’s still, they want to eliminate any of that. And you can’t do that. And in our company, even though some companies are exactly opposite, you dressed up nice when you came to work. You’re expected to, at least a nice pair of slacks and shoes or pants and shirt. And if you’re a leader, you wore a suit and tie. At other companies, that’s no, no, no. You can come however you want. You can come in your bathing suit. But we had some restrictions. You had to be dressed for the occasion. Some people liked it, some people didn’t like it. Well, if you don’t like it, then don’t come, don’t join us. So that’s the kind of discrimination that you have to have. Discrimination is not bad if it’s not aimed at putting somebody down, pushing them down, as you would. Guy Smith: Right. And to tie two loose threads together here, people talk about woke-ism, which is all about being aware. And one of the pillars of your corporate culture was respect for everybody, every individual. And to my mind, that is one of the most fundamental bits of being woke that you can have. If you’re not willing to treat other people with dignity and respect, then you’re just not aware of a basic element of humanity, and you’ve got to expect that to become poisonous inside of a work environment. For the audience, Ray hinted at this just a second ago, swearing was not allowed at Micrel. I encourage you to buy Ray’s book, Tough Things First, because there is a gut busting little story in there about an executive who had a foul mouth, but he had to pay a dollar every time he let loose with a swear word, and I won’t blow the punchline of the story. I want you to buy the book and read this. But just imagine an executive reaching in his pocket and pulling out a wad of $1 bills because of a chain reaction of things that happen. Let’s talk about the way corporations fit into society. One of the things that some in the woke-ism part of the culture are saying is that CEOs need to take a stand on just about everything. I think one of the more intriguing things I ever saw was when Bank of America decided that they wanted to take a stand on gun control. I don’t care what people’s opinions about gun control are, but that was so disconnected from what Bank of America does and what their employees face as part of a work environment, that it seemed like a woke-ism meltdown. It was a unnecessary and just unviable thing to take a stand on. What’s your position, or what are your thoughts about CEOs and what they need to publicly express or not express on behalf of their company and their shareholders? Ray Zinn: Well, I stay out of that. I try not to become political. Again, we had the basic principles of honesty, integrity, respect for every individual and doing whatever it takes. That’s the culture of the company, and it’s not political. So I did not take political stands. I didn’t say, “Oh, well, if you don’t believe in gun control, then you can’t work for the company,” or, “If you don’t believe in abortion, you can’t work for the company,” or, “If you don’t believe in paying off student loans or the government pays student loans, you can’t work for the company,” or, “If you the have some other view that’s different than somebody else, you can’t work for a company.” In Silicon Valley, of course, it’s a more progressive area. So we had a lot of people who had a totally different political view than I did, but that didn’t stop them from enjoying good employment and good opportunity and growth at the company. I just left politics out of running the company. I’m not required as the CEO with my shareholders to take a particular stand on the green environment. We’ll comply with all the laws and regulations with regard to green, but we didn’t make a big deal of it. We didn’t come out and make a political statement. Again, we just ran with the basic tenets of treating humanity correctly, and let politics stay out of the company. Literally there were no politics within the company, zero. Guy Smith: Well, let me get your thoughts on one thing. I’ve been making this argument recently that in terms of speaking on behalf of shareholders, a CEO can definitely publicly talk about things that affect the company, even if they’re political, because one of the duties a CEO has is to look out for the shareholders. So if it impacts your business, it’s quite proper for a CEO to stand up in a public forum and say, “This is what we believe about this little piece of politics.” Is it not impossible for a CEO to express a position on a political issue that doesn’t impact the company? Because I’ve got to imagine that the shareholders are just as varied as all the employees, and a CEO who’s taking a public position is speaking against the beliefs of a lot of their shareholders, regardless of which side of the line that he falls on. Ray Zinn: Well, Guy, I write a lot of musings, as you know. You’ll often write back and say, “Ray, you don’t want to say it that way, because you don’t want to offend your readership.” And that’s the same thing as a CEO, you don’t want to offend your shareholders. So unless there’s some political or some government regulation that’s impacting a company, I stay out of it, and I would recommend it to CEOs to stay out of it. There’s no need of you putting out white papers or pounding your fist and acting like God almighty, unless it affects your company, unless it affects the operation of your business. So, it’s really untenable for a CEO to come out and make a political statement that’s his own personal belief that has nothing to do with the operation of the company. Guy Smith: I think there’s so many dangers in doing so in terms of offending shareholders, offending suppliers, offending customers, that it’s more risk than reward. Ray Zinn: Years ago, I had one of our vendors come into the building and wanted to speak with me. So I invited him up to talk to him. He says, “I service almost 100 companies within the Bay Area. I call on lots of companies.” But he says, “There’s something different about your company.” He says, “When I come here, I have a different feeling. It feels different when I walk in the door of your company.” He said, “Can you tell me what that is?” And I said, “It is because we love each other. We respect each other. There’s not that hostile feeling. There’s no hostility within the company, either intra or extra departmental. We all treat each other with honor and respect.” And he said, “You guys have always paid your bills. You’ve always been fair.” He says, “I don’t have any problems and I just wanted to know how you do that. How can you be so different in a area which is not as friendly as your company is?” And I said, “Well, that’s just the way we treat each other. That’s the way the company is run. I mean, we are different. There’s no question about it. We are different.” Guy Smith: To circle back to something that you said earlier, Micrel had the lowest employee turnover rate and the highest rate of boomerang employees, employees who left and then came back. Anyone who’s listening to this podcast and running a business knows how hard it is to find good people, knows how expensive it is to bring them on board. So these cultural pillars that you had at Micrel were not only good from a humanitarian standpoint, but from a business standpoint, in terms of having a stable, reliable, happy, intelligent workforce and lowering all of those recruitment and onboarding expenses is just plain good operational sense. Ray Zinn: Exactly. Guy Smith: Well, thank you again, Ray. Thank you for your insights about woke-ism and what it really means to a company instead of the current misinterpretation, I will say, about what it should be. And for the audience, I mentioned Ray’s primo book, Tough Things First, same as this podcast. It should be on your required reading list. I’ve read a bunch of business books. This is absolutely the top of the heap, required reading in at least a couple of universities that I know of. Ray has two other books out, Zen of Zinn. I’ll spell that. It’s Z-E-N of Z-I-N-N. And Zen of Zinn 2. Nice little golden nuggets of wisdom, something that’s designed on purpose to be short little fast reads to give you some inspiration and insight and wisdom during your day, and put the book aside and repeat the process tomorrow with the next page. Very approachable in terms of understanding the interaction of business management, leadership, humanity, and life as we know it, as well as all other relationships. So thanks again, Ray. I appreciate it. And for the audience, make sure you hit that like button and subscribe to the Tough Things First podcast. And by all means, tell everyone you know about it. Ray Zinn: Go dig for gold and read my two books, Zen of Zinn and Zen of Zinn 2.
21 minutes | Sep 8, 2021
Startup Nervous Energy
When entrepreneurs channel nervous energy constructively, they take the healthy awareness that their business could fail and we use that awareness to stay on their toes. In this Tough Things First podcast episode, Ray Zinn – Silicon Valley’s longest serving CEO – chats with Dr. Chloe Carmichael, and expert on the psychology of emotional energy for teams and how it can best be channeled away from chaos into success. Dr. Chloe Carmichael, Ph.D, is a licensed clinical psychologist, known as Dr. Chloe. She holds a master’s degree and Ph.D. in clinical psychology from Long Island University and graduated Phi Beta Kappa, summa cum laude, with a bachelor’s degree and departmental honors in psychology from Columbia University in New York. Her practice in New York City employs multiple therapists to serve high-functioning business executives, people in the arts, and everyday people seeking support with personal or professional goals. Dr. Chloe is the author of the book Nervous Energy: Harness the Power of Your Anxiety, endorsed by Deepak Chopra! She is a member in good standing of the American Psychological Association, as well as the National Register of Health Psychologists, an elite organization for psychologists with gold-standard credentials. She is also a consultant at Baker McKenzie, the third largest law firm in the world. She is an Advisory Board member for Women’s Health Magazine (Hearst), and a featured expert for Psychology Today. Dr. Chloe enjoys relating with the media, as well as public speaking. She has been featured as an expert on VH1, Inside Edition, ABC Nightline and other television; and has been quoted in the New York Times, Forbes, Vanity Fair, Shape, Cosmopolitan, Rolling Stone, and other print media. Ray Zinn: Hello, everyone. Welcome to another wonderful podcast of Tough Things First. I am Ray Zinn, the author of this great book that I did several years ago, also Silicon Valley’s longest serving CEO. I ran my company, Micrel Semiconductor, for 37 years, profitably by the way. With me today I’m so excited to have Dr. Chloe Carmichael, who is that author of a fantastic book. I hope you all have a chance to read it. In fact, we’re going to talk about her book today in our podcast. It’s Nervous Energy and Harnessing Your… I think I’m saying this right, Harnessing Your Anxiety. If I didn’t say that right, Dr. Chloe, I hope you will correct me. But, anyway, welcome to our podcast. Dr. Chloe: Thank you so much, Ray. Yes, the title of the book is Nervous Energy: Harness the Power of Your Anxiety. Ray Zinn: Harness the Power… Oh, yeah, that’s it. Harness the Power of Your Anxiety. Before the podcast we were… Almost doing the podcast, talking about what that really means. So I’m going to let you explain that to our audience, about your nervous energy and how you harness the power of anxiety. I was telling you I ran Micrel for 37 years and I was on red alert, I had anxiety or was anxious every single day for 37 years. You likened it to not having saliva in your mouth. Go ahead. Dr. Chloe: The concept behind Nervous Energy: Harness the Power of Your Anxiety is that a lot of people just assume that anxiety is bad and that they want to get rid of it, whereas the truth is is that the healthy function of anxiety in psychology terms… The healthy function of anxiety is to stimulate preparation behaviors. So if we were to say get rid of all the anxiety we wouldn’t even look both ways before we crossed the street. Ray, I think you’re living proof. You said that for 37 years that you woke up every day with anxiety. Now we don’t want to have anxiety running wild, so to speak, but we also don’t want to get rid of it. The trick is to harness it and make sure that we use that extra energy to actually push us towards our goal instead of getting stuck and chasing our tail. Ray Zinn: That’s right. And I should say, Dr. Chloe, you are a clinical psychologist so you are an expert in this area. I want the audience to know that. When we talk about anxiety, and everybody really talks about that as being bad, stomach ulcers and other physical problems that are associated with having a high level of anxiety, but that’s kind of what it’s like to be the CEO or a leader of a company. There could be a lot of anxious moments. As I was telling you prior to our podcast, I used to be a pilot. I’m still a pilot, but can’t legally fly the plane. But I used to have a hard time getting to sleep at night thinking about the flight that I’d be making the following day and my wife would be sleeping like a log. I’d say, “I don’t know how you do that. How can you sleep so well and I’m sitting here tossing and turning?” She says, “Because I have more faith in the pilot than you do.” That’s probably the case, the employees of the company don’t have near the anxiety that the CEO or the president of the company does because they’re not at the helm. They’re not the ones steering the ship, as they say. Dr. Chloe: Well, that can be, Ray. In your company I would guess that was probably true, Ray, because you’re obviously a mature business leader who knows how to take and accept that giant responsibility of leadership and that you know how to manage that. There are other companies, however, where the leader doesn’t know how to manage their anxiety very well, and in those cases, unfortunately, their anxiety actually gets spilled over onto the team. To your wife’s point, she was able to relax because she trusted the pilot, right? I think when our employees can trust the pilot, the leader of the company, then they can relax and focus on the work that we have laid out for them. I say we because I’m also a business owner myself. I’m a member of Entrepreneurs Organization, where we have a minimum of one million a year in annual revenue to join. I manage a team of about 10 or 12 people domestically and internationally right now, so I’m no stranger to understanding that giant responsibility of leadership, and I’m sure your listeners run much bigger companies than that. But one of the things that I see frequently is that when the leader knows how to manage their nervous energy, when they have that healthy awareness that success is absolutely not guaranteed and that keeps them on their toes a little bit in a healthy way, and then they use that energy to create some organizational charts or project timelines or create accountability plans, they are using that anxiety in a healthy way. They are harnessing the power of that anxiety. On the other hand, when they’re not aware of that anxiety, they’re not conscious of it, or they’re just trying to close their eyes and think happy thoughts, so to speak, and pretend it’s not there, that’s when they get prone to mood swings, drugs and alcohol issues, blind spots in business, and you bet that makes the employees nervous when the leader doesn’t know how to handle their anxiety. Ray Zinn: Or when they use artificial means to control their anxiety, that’s a danger sign right there. I think you know from your experience that when the CEO or the leader starts using artificial means to control their anxiety all heck breaks loose. Dr. Chloe: Sure. I love to work hard and play hard, and happy hour I think is a great time, but I think we all know… You know, when you say artificial means sometimes people can get into that level where they’re kind of numbing themselves, again because they have this actually gift of anxiety, of this extra edge, but maybe they just have never really learned how to point that anxiety in the right direction, or they think it’s a weakness or they think it’s a vulnerability, whereas it’s actually many times a badge of awareness. If a person has anxiety and awareness that success is not guaranteed for their company and that puts them on their toes a little bit, that can actually be a positive thing. We just need to make sure that they know how to use that boost of adrenalin and focus that does accompany a little anxiety. Ray Zinn: So give the audience some ideas of how they can harness this power. Dr. Chloe: Sure. For example, I give a lot of examples in my book actually of business people. There’s one in particular of an entrepreneur who uses the technique in my book which is called the mental shortlist. The entrepreneur in my book, he has a big meeting with investors coming up and he has prepared six ways to Sunday. He’s thought about nothing but this meeting for quite a while. He’s made every preparation under the sun. Then he hits a bit of a wall, where the meeting is in a couple days but he can’t stop thinking about it. It’s like his mind is in a cognitive habit of just auto-tracking onto that meeting and getting nervous and thinking about how he doesn’t know how it’s going to go, and he’s almost tempted to overreach out to the investors to the point where he’s afraid he’s going to get annoying and he knows he’s starting to go over the tipping point. So what he does at that point is then he chooses a technique from my book called the mental shortlist, which is designed to help you to pivot your mind off of a topic when you’re starting to ruminate on it. So the mental shortlist technique is he comes up with… I did this one with him. We come up with five things together that you know are going to be a much better use of that extra burst of mental energy that does accompany anxiety. It could be anything in his case from getting a jump on your birthday and holiday shopping, to checking out your competitors’ websites, or even just writing some thank you notes to employees that he keeps meaning to notice and acknowledge. But the idea is that he has five things that he can pivot onto instead of thinking about that meeting. The trick, however, is to only use a technique like the mental shortlist when you know that you’ve already done every possible preparation you can for whatever is making you nervous. Otherwise, the mental shortlist is just escapism, right? Because sometimes with anxiety it’s actually stimulating us to lean in. [inaudible 00:10:17] out and trying to let things go and forget about them is not always the answer. So we only want to use kind of a mental pivot technique like the mental shortlist… It’s only good to use that once you really know that you’ve done everything you can do about whatever was the original stressor. Ray Zinn: That’s so true, Dr. Chloe, because if I’d of been able to kind of have a mental shortlist while I was sleeping and not dwelling on the flight because it’s that paralysis by analysis… We just analyze, analyze, analyze, analyze, you’re thinking of every possible angle, and I know that… Because I teach at several universities on a regular basis, and also I give lots of lectures, and I notice that my best lectures and my best teaching moments are when I’ve had this mental shortlist and not try to analyze myself to death and actually get this paralysis which is not harnessing my anxiety. It’s actually letting my anxiety run wild when I do that. So what I do is I just prepare best I can and I just try to change the subject, as you would, in my mind and go off into a different… Pivot into a different point so that I don’t become so anxious that I lose my train of thought, because that’s one of the things that happens. Actually as you get older you’ll start losing your train of thought and then you’ll do a worse job. Dr. Chloe: Exactly. Analysis paralysis is actually a phrase that I use often in my book. To your point, it’s all about losing your train of thought sometimes which can happen really to anybody that has an active mind and a very full and busy life. What the client in my book did with his mental shortlist, and which I encourage people to do sometimes so that you can stay focused, is he organized the items on his list into an acronym, because it is true often that when we get nervous and rattled that might be the time when it’s suddenly difficult to recall those five things that were better uses of our time and energy. It’s easy to think of them when we’re just sitting there calmly, but when the pressure is really on and that old thought monster topic that we know we should leave alone is just calling our name, having a good acronym. His acronym was actually game fee, as in game changer. He would think again about those birthday gifts, and he had an African safari that he was going to be planning, and all these fun things that he organized into a nice game fee, as in game changer for himself. As an acronym, of course, each letter stood for something that he wanted to think about instead. Going through that acronym sometimes would not only keep him focused, like you said, so that his mind wouldn’t wander… And he also… Sometimes the mind just wants a little bit of a cognitive challenge, a little bit of a riddle, and just trying to remember those topics was sometimes also a good way to avoid ruminating about that meeting. Ray Zinn: It’s called a counterirritant. Back in the day when they didn’t have a lot of ways to control pain we’d bite on something or we’d… And I notice that sometimes when I’m going to get my flu shot I’ll either bite my cheek or I do something as a counterirritant. That’s another way that I do it, is I come up with a counterirritant to get my mind away from what’s actually going to happen. Dr. Chloe: Yeah. In fact, I would even say that this is… A lot of the counterirritant principle, even taking it up a notch, because it’s not really an irritant. It’s more of a treat. So it would be more like if you were going to have a tooth pulled booking yourself a foot massage at the same time, right? So if actually something is pleasant there’s a value add, that people get pleasure out of accomplishing those things on their new mental shortlist. In my opinion it’s even a step up from an irritant. Ray Zinn: Well, I was using that term. We talk about the counterirritant. That’s that game changer. That’s how we modify our process so that we don’t dwell on what’s happening. That’s what I meant. I didn’t mean to sit there and pound your head against the wall. What I meant was that just find a way to alter your mindset so that you’re not dwelling as you would, like I was when I was flying, dwelling on all… You know, what if I lose an engine? What if this happens? Dr. Chloe: Exactly. Ray Zinn: So I guess as you call it, as game changer, I just modify my thought process. Another thing that I do, Dr. Chloe, when I’m giving lecture I think okay, what’s my takeaway? What do I want them to walk out of a room remembering? I use that as my theme so that I build around that, so that I don’t get lost, as you would, in the minutia of discussion or the lecture. I try to say okay, what do I want them to learn? What is the bottom line when they walk away? What is the theme of this whole discussion? That really helps me really organize myself so that I don’t get caught in the tangle. It’s kind of like in a fishing line when everything gets all tangled out there and then you have this rat’s nest that you got to clear up. I find that by just keeping my mind focused on the bottom line, what it is I want the takeaway to be, then I don’t get these tangles. Dr. Chloe: Exactly, Ray. I would say, just in case anyone is wondering what is the takeaway from this today, I want everybody to know that there is a healthy function to anxiety. It is to stimulate preparation behaviors. In my book I’ve got nine different ways for people to do it, just depending on the situation, but of course every technique is going to differ by the situation. So the bottom line is that the healthy function of anxiety is to stimulate preparation behaviors, and it can really be our friend if we just know how to operate it. Ray Zinn: Yes, and you can over-prepare, and we tend to do that when we are anxious. We tend to over-prepare, and that’s the worse thing that can happen, because then you get these rat’s nest tangles in your fishing line. Where can they find your book, Dr. Chloe? Dr. Chloe: Sure. An easy way to do it is nervousenergybook.com. At nervousenergybook.com. they can also get video of me doing a breathing exercise and things. But also, of course, the book is on Amazon, Barnes & Noble and everywhere that books are sold. I was also very adamant with the publisher that we also needed in addition to print, that we also needed to have an audiobook. As a psychologist, I’m a big believer in what psychologists call modeling, which is that if we can hear someone talking and describing a mindset that we want to take on sometimes it’s easier for us to do it that way through audio, so the book is available in audio as well as print. Ray Zinn: That’s wonderful. I hope that they will get your book. It sounds fantastic. I’m going to have to get it and at least listen to it on audio if it’s available on audio, because this sounds like something that I need, even though at my advanced age and what I’ve accomplished I still am not sitting in the weeds. I’m actually still moving, still going, and still pushing and driving. You would think that being somewhat retired, that I’d be sitting on a rock in Hawaii, but I’m not. I’m really continuing to teach and drive myself and push myself, because that’s how we continue to grow as opposed just to sitting in the weeds, as you would. Thank you ever so much, Dr. Chloe, for letting us have this great knowledge that you have regarding using the power of anxiety to help us controlling our nervous energy, as you would, to let us grow and progress and do better. Any parting thoughts you’d like to leave with us, Dr. Chloe? Dr. Chloe: Thank you, Ray. I just want to say that if you would check out my book I would be deeply honored. I mentioned Jim McCann, the founder of 1-800-Flowers, thought it was a game changer. I’d be honored to send you a copy if you’d like to check it out, and I hope everybody will check out Nervous Energy: Harness the Power of Your Anxiety on Amazon or nervousenergybook.com. Ray Zinn: Listen, I certainly would like to get a copy, and if you would sign it that would be great. Dr. Chloe: Of course. Ray Zinn: I’ll have to get you a copy of my book, Tough Things First, so we will do that- Dr. Chloe: Sounds good. Ray Zinn: … if we have all your contact information. So, again, this has been a great opportunity to hear one of the true experts, Dr. Chloe Carmichael, who is a clinical psychologist and is an entrepreneur as well. Thank you ever so much for joining us. Please, audience, come back again. We would love to hear your thoughts and comments. Please let us know on Tough Things First what you think of this podcast, share it with your friends, and also read my book, Tough Things First, which is a good textbook for entrepreneurs, as well as my other two books, Zen of Zinn and Zen of Zinn II. You can find those on Amazon. Thank you ever so much. We’ll look forward to seeing you later.
16 minutes | Aug 25, 2021
How companies rebound from prolonged revenue depression is not just for a post-pandemic world. As Silicon Valley’s longest serving CEO, Ray Zinn has led the way through major dips and explains strategies for exiting them. Guy Smith: Hello again, and welcome to another episode of the Tough Things First Podcast, where we absorb the wisdom of Silicon Valley’s longest serving CEO, Mr. Ray Zinn. My name is Guy Smith. Happy to be host of this podcast once again, and especially for today’s topic. We have, as of the date of this recording, just started to come out of the pandemic. And for a lot of companies, they suffered through a severe revenue depression during the pandemic. I’m curious as to Ray’s experience and views as to how companies come out of prolonged revenue depression. What are the right steps in terms of rescaling their business, refilling the bank accounts, and all that stuff? First things first, hello, Ray. I hope you’re doing well today. Ray Zinn: Well hello, Guy. I’m doing great. Glad to be back with you again. Guy Smith: Always a joy to be with you. I learn more from you per unit time than everything else I do with my day, so it’s always fantastic. Anyway, you were in the semiconductor industry for all of your leadership tenure as a CEO. And we know that the semiconductor industry has these wild cycles, and occasionally revenues are depressed for a number of years, depending on which part of the semi industry you’re in. And plus, like any other business, you took a couple of hits along the way in terms of customers checking out and losing a fair share of your income. Let’s talk about how a company goes from being flush to being really tight on cash, and how do they rebuild themselves out of a revenue depression? Ray Zinn: Well, that’s a good question. Actually, these cycles that we’re talking about last between a year and a half and two years, and that’s not unusual. The reason these cycles last for that length of time is that, I talk about it being Newton’s first law of economics, for one action you have in one direction. You have an equal and opposite action in the other direction. And so, the harder the economy is pushed down, the harder we work to get the economy back on its feet again. And so, if we’re not pushing real hard, it just drifts down and it takes longer to come back up. And so, we hardly even notice those, but those do happen. I mean, we have these weak cycles and they ebb and flow. They may last for two or three years, and they happened just prior to 2016. The thing was drifting down, down, down, down. It took a while for it to recover. The harder the pressure is to go down, the harder we push to go back up. Same thing if you have a real bad headache. You’ll tend to take more aspirin, or Tylenol, or whatever to get rid of it. If it’s a slight headache, you’ll ignore it. If it’s a big headache, you may two or three just to get rid of it. This is all nature. This is just the way we react to pain, as you would. The more the pain, the more the pain killer we put into it. Same thing when you’re running a company. If you get knocked down really hard a couple of times… I lost a fourth of my revenue a couple of times, and, I mean, instantly. I mean, like within a day lost a fourth of my revenue. And so, that made us scramble really fast to get the thing reversed. This pandemic, if we just look at the period of time, and if we look at a normal cycle, rough cycle, a difficult one, like the pandemic lasting a year and a half to two years. We are coming out of it. In other words, it’s been about a year, a little over a year, year and a couple months, since we’ve had the downturn. You, that are listening to the podcast, I’m sure are wondering what can we do? I mean, you probably figured this out when you had that big slide back in March of 2020. You began to think, “What do we do? What do we do? What do we do?” And that’s the normal way you get out of these things is you start coming up with a pivot method, some way you can pivot out of the downturn, and you already begin to do it. I’m watching these little stores, and restaurants and so forth. They’re pivoting. Some took the time to remodel their facilities and train employees. So they took that time while the business was slow to regroup, as you would. Anyway, this is a good time to pivot, right now. I mean, we’re about a year and a couple of months from the start of the pandemic, at least, from the feeling of the start of the pandemic. Masks are coming off and we’re beginning to really starting to rock and roll again. This is not unusual, Guy, for these downturns, these really significant downturns, like we’re having with this pandemic for us to figure out how we’re going to pivot. What are we going to do to reverse course, as you would? Guy Smith: What are the first steps out? Let’s take a scenario where business has had severely depressed revenues. They see that they now have daylight ahead of them, but they don’t have the cash in the bank, not ample excess, to begin hiring people back or to begin investing in things. How does a company pull themselves out of the muck from a prolonged down cycle, such as the pandemic? Ray Zinn: Well, some of them have received help from the government. There has been small loans that have been given out, unemployment benefits. And so, the difficult thing has been getting people back to work. I mean, some people are not wanting to go back to work, because they make more money by staying unemployment. Because the unemployment benefit is so good that it’s hard, unless you’re going to pay them 50% more money, let’s say $20 an hour, rather than 10 or $15 an hour. They’re just not going to come back to work, and that’s going to be the struggle. Our low unemployment is forced. I mean, we’re forcing people to stay unemployed by giving them these benefits. So the struggle for a lot of businesses are hiring people. I mean, they’re coming up with all kinds of incentives to get people to come back to work. And until the government shuts the door on this benefit, it’s going to be hard for these companies to find people. I think this is the first struggle, right now, is just finding good people. Guy Smith: Well, are there other bumps that a business leader should be aware of when they begin to pull themselves back up by the bootstraps? I mean, money is going to be tight, but what other recovery realities of life might a CEO face as they begin to rebuild? Ray Zinn: Well, I had one of my students contact me, what, about three days ago, I guess it is now, and he was concerned. He started a little business, a little Bitcoin service business actually, called Bitcoin Mining. He was asking me what he should do. And he began to pivot from making these little Bitcoin machines to actually servicing them. That was the way he pivoted. Some companies will pivot through having your goods available in your store to delivering goods to the home, or some other way of providing a service. The main thing is understand what your strengths are and how you can profit as we come out of this downturn. How can we best profit from this? People have a lot of pent up demand for just getting outdoors. If you have a way your business can service people who want to be outdoors than that’s going to really do well. I know that these recreational vehicle companies, they’ve got so much business, they don’t know what to do. I mean, some of these guys are sold out for three to six months from now. The problem is, you can’t get the product. The pandemic, of course, with all the unemployment and people having to distance themselves from each other, has really slowed down the production lines. And so, there’s a lot of production issues that people are facing, just because of this having to social distance, and wear masks, and only can work so many shifts, so that has really slowed down the pipeline. And that has hurt a lot of companies. What you can do is figure out how you can benefit from the supply shortage. There’s a massive supply shortage in semiconductors right now, all because of the same problem. Social distancing, and wearing masks, and only can work so many shifts, that has really slowed down the pipeline. There’s a huge pipeline interruption that we have to fix. So if you can figure out, in your business, how you can solve that pipeline problem, you’ll do well. It’s just a matter of pivoting and understanding what’s going to work best for your particular business. Guy Smith: Well, I think pivoting is ultra important to some other people, because the pandemic, more or less, eliminated, or permanently reduced, certain industries. I’ve been talking recently to people in the commercial real estate market. As corporations discovered that work from home is really, really a good option for a lot of them, the commercial real estate market is in a contraction phase and they don’t see any daylight out on the horizon. So pivoting when there’s a fundamental shift in your market caused by a downturn, or by a change in your customer attitudes, is also part of the equation. Ray Zinn: No, that’s what I just mentioned. You got to take advantage. Try to find a way to take advantage of this downturn. The commercial real estate is an example. I mean, we’re finding out, in my son’s job, that when they do go back to work, they’re figuring that they’re only going to go back to work three days out of five rather than five days out of five. And they’re going to be able to rotate offices. In other words, they don’t need as many offices, because people… Maybe you’ll be in that office for three days, and somebody else will have it for two days, or vice versa, or maybe some other way of operating your business. The real estate market, commercial real estate market, is going to be highly impacted by this pandemic, because people have found a new way to adjust. Now, that’ll get swung back around again. I’ll give it four, maybe, five years and the real estate market will be back on its feet again. But for the next two or three years, anyway, it’s going to be tough sledding for the commercial real estate market. Guy Smith: Yeah, probably a few other industries, as well. But it’s like any wild cycle, after the dip there’s a surge, and then things tend to level out after a couple years. Ray Zinn: It takes about four or five years and it’ll be level back out again. The commercial real estate market will be in the tank for, probably, four or five years. It’s going to take, at least, two or three years just to even get back to somewhat form of normalcy, as they call this the new normal. Guy Smith: And right about that time, the next disaster will happen, and we’ll go through it all again. Ray Zinn: Absolutely, that’s the way it is. That’s what you call the ups and downs of life, Guy. Guy Smith: Yeah. Always assume that the next disaster is waiting in the wings. Ray Zinn: All right, Ray. Well, thank you so much. That was very insightful. I do agree that these cycles are maybe not predictable, but are to be expected. And recovering really requires being agile of mind, as well as foot, and looking for your new opportunities, or your changed opportunities, as you come out of the down cycle. For the audience, if this 10 minutes of wisdom has impressed you, by all means, go out and get Ray’s master workbook called, Tough Things First, just like this podcast. I have a degree in management. I’ve read tons of business books over the years. This is, arguably, the most informative, entertaining, but also insightful from a basis of experience and wisdom of any of the business books that I’ve ever read. I do encourage you to get that. Also, by all means, while you’re thinking about it, hit that subscribe button, as well as the like button on whatever app you use to listen to podcasts. And also, Ray has two other books out there, Zen of Zinn and Zen of Zinn 2, both of these are little… How to phrase this? Little small soundbites of wisdom to get you through your day. It’s one of those books where you can sit down, read a couple of pages, feel enormously refreshed by the insights that are there. And then pick it up, and do the same thing tomorrow, inspirational as well as informative. Again Ray, go ahead. Guy Smith: I call them the golden nuggets of life. Ray Zinn: That’s a good, good summary. Guy Smith: So go mine some golden nuggets, and pick up my two new books, Zen of Zinn and Zen of Zinn 2. I think you’ll enjoy them. Ray Zinn: I’m certain that they will enjoy them. Thanks again, Ray, and for everyone listening to the podcast, we’ll catch you again in another couple of weeks. Guy Smith: Thanks again, Guy.
27 minutes | Aug 11, 2021
Going 100% Work-From-Home
The pandemic taught many companies that work-from-home was a viable option for many employees. Some companies went all the way. In this Tough Things First podcast, Gerry Sweeney, CEO of Hornbill, a cloud-based provider of workflow management solutions, discusses with Ray Zinn, the longest serving CEO in Silicon Valley, how his company cancelled their corporate HQ office lease after a year of COVID induced working from home. Ray Zinn: Hello everyone, this is Ray Zinn. I’m the author and podcaster for toughthingsfirst.com. And I’m just delighted to have with me today, Gerry Sweeney, who is an entrepreneur and a CEO of a company. And so welcome Gerry. Gerry Sweeney: Thank you Ray, Thanks. Great to be here. Ray Zinn: So tell me a little bit about yourself. Gerry Sweeney: Okay. As you say, I’m a founder and CEO, active CEO of a software company called Hornbill. We’re based here in the UK, but have customers all over the world. We’re a SaaS software company. I founded the company back in 1995 and I continued to operate and run that company today. Ray Zinn: You must be across the pond from us? Gerry Sweeney: I bet I am. Yeah, I’m just outside London. Ray Zinn: Okay. So how big is your company? Gerry Sweeney: In terms of people? Ray Zinn: Yes. Gerry Sweeney: About 70 people currently. Ray Zinn: Okay, 70 people. And what kind of software do you offer? Gerry Sweeney: Well, the software is service management software, business, workflow automation, and collaboration, communication software. So if you combine those three things it’s, work management for businesses, typically used primarily in mid to enterprise size companies. We start to have relevance and offer value when an organization is sort of 3 or 4,000 people and above. Ray Zinn: So how can anyone find out about your company? Where can they go to find out about Hornbill? Gerry Sweeney: Oh they can just go to hornbill.com. We’re there, we’ve been there since 1995, so. Ray Zinn: Okay, so you do workflow. So that’s efficiency, production, efficiency, performance efficiency, so forth? Gerry Sweeney: Exactly. Business efficiency, business optimization, digital transformation. That whole area, service management and so on. Ray Zinn: And you know, this is a perfect segue into our discussion today. What we’re going to talk about is working from remotely as opposed to working at an office. So, that’s the subject of our podcast today. And tell us Gerry pandemic caused you to kind of shift gears a little bit pivot. So tell us about that. Gerry Sweeney: Yeah, absolutely. I think it was pretty much a foregone conclusion. So it was simply one day back in the early part of 2020 and around March, I think it was March 18, actually. We decided based on what the UK government were telling us. To actually just send everyone home and work from home. So we did that. So that was on a, I think, a Tuesday or something like that. I can’t remember now, to be honest with you. It might be a different day, but let’s just say Tuesdays for want of a better day. And everyone went home that day and we have actually been remote working ever since. So, for us and that sounds very sort of chaotic, but actually in reality we’re a software company and our business is in the cloud. Our services are operating out numerous data centers around the world. So we remote manage everything anyway. There was of course challenges, logistical challenges, but actually the transition was pretty smooth. We were back up and running the next day. I would say our customers didn’t notice anything at all actually. Ray Zinn: So, here we have the pandemic kind of coming to a conclusion, at least it appears that way. And people are beginning to go back to their office, not their home office but their company office. My son works for Apple and starting in September, they will go back three days a week, back to the office and then they get to do one, one week a year. I think they get to work from home remotely. So, tell us about what you’ve decided to do. And now that we’re kind of the winding down of the pandemic. Why have you decided to really just go remote totally? Gerry Sweeney: Right. So, it’s a very interesting set of challenges. I’ve written about it earlier on in the 2020 period. But for me, what stood out instantly as soon as this happened, as soon as you observe organizations doing this on mass, the question that was forefront in my mind is all right. So how do organizations deal with this from a management perspective? Because by far, first of all if you look at your business, the nature of your business, if you’re an information worker like we are, so a software company, we need a computer and internet and pretty much, we’re good to go. Of course, if you’re a nurse or a doctor or something, you physically need to be somewhere. So, there’s a difference between those kinds of businesses. So, the first thing to do is identify the kind of business we were. And then in thinking about it on behalf of our customers and other customers, the nature of their business. So in the information worker sort of section, if you like, for me, the most obvious question was wow, how are manager’s going to deal with this? Because most managers fairly typically manage people by presence. You want to meet with people, you get them physically in the location. If you’ve got a kind of draconian management approach, you might want to physically see they’re in the office and they’re clocking in and clocking out almost using the director systems and so on. Ray Zinn: So are you saying Gerry that we don’t need managers anymore? Gerry Sweeney: Well, I wouldn’t say we don’t need managers, but I think there’s a lot of middle managers that having to reinvent themselves quite a lot, because, you’re going to transition from, going to saying, okay, well, we need six people to man our support desk, because that’s how busy we are. Any number of calls divided by average call per hour, divided by P you can take that as an example. And in a way it’s a very lazy way of doing it. What’s really difficult to do is I’m sure you know, Ray given your experiences, how do you actually measure people’s value to the business by their contribution, by their output, by a metric other than what time did they get into the office and, how long do they stay after the office is closed to get stuff done. And, that I think is where your middle management I think have to do really big transition in their thinking. And so for me, that’s the kind of the one compelling reason that is going to bring people back into the office, not the only compelling reason, but certainly one of the main ones. Ray Zinn: So are we saying, we need less middle managers now, is that what you’re saying? Gerry Sweeney: Yeah, the nature of management I think has changed. And so I don’t think you necessarily need less middle managers. It’s actually quite possible you might need more management. But the nature of it is very different because if you’re remote working, we know that human beings are social beings and they like social interactions. So, in a way I think companies are going to be obliged to create those opportunities, create those social interactions. Whereas before they kind of got all that for free, just by bringing people through the commute and getting them into the office. And once they got them in there, they know all of these things that are really important to people. They kind of got for free without having to create them. In a remote working environment, of course the complete opposite is true. You don’t any of that for free and it does matter, even with this relatively small number of people we’ve got. I talk to our people all the time and I’m really interested in the way that they sort of perceive what’s going on and people get used to remote working. However, there’s still a very clear need for let’s meet some more, let’s get out, let’s do something, let’s get some face to face meetings, that kind of thing. Ray Zinn: So, with the software available to us now to have these virtual communication meetings as you would, be able to get together kind of face to face virtually has really allowed this remote working from home, as you would work, work well. Do you see you doing that more? In other words, do you have a lot of the remote meetings, virtual meetings? Gerry Sweeney: Absolutely. Definitely more than we have before and tools like Zoom and Skype and Teams or whatever you use have been very useful in this period. The problem with those tools though, is they’re not a complete replacement for face-to-face meetings. I don’t know what it is, people like to physically touch each other or something. You end up sort of looking at your people working with your team as they’re all sort of digital apparitions on your screen. And so the software is undoubtedly critical nowadays, I would say. And certainly we would be using video conferencing type software much more often than we did previously, but there is still a need for face-to-face. I think the other thing I’d say to our advantage is back in, or I don’t know, eight, seven or so years ago, I transitioned the company away from email. And what I mean by that is we used to have many internal conversations on email as most companies do. And I effectively outlawed that practice in the company and moved everyone onto our collaboration software. And we built our collaboration software specifically to do this. And so all of our internal conversations bar none now are on our internal collaboration tool. So obviously when it came to remote working, actually, that was a very easy transition for us to make. Ray Zinn: Emails are terrible anyway. Gerry Sweeney: Awful. Ray Zinn: I mean, you really can’t get your message across in an email. You can set appointments and you can do some basic communication. But if you trying get your point across, it’s not really good to try it on with- Gerry Sweeney: It’s not the best medium at all. Ray Zinn: No. So, now that people are not commuting. What would you say was the average commute time for your company? Gerry Sweeney: Oh, that’s a good question. I think probably I’d say an hour, an hour to an hour and a half. We’re- Ray Zinn: Each way or one way? Gerry Sweeney: Each way. Ray Zinn: Okay wow, two hours. So are you now expecting your people to work longer hours now that you saved them two hours? Gerry Sweeney: No, but to be fair to the people that work in my organization, they’re a pretty committed bunch and they do what’s needed to get done. We don’t need to tell them to do that. But, there’s a massive benefit to the individuals because they get an improved quality of life. They get more time with their family. They’re not being forced into packed trains and planes and buses. They don’t have to put up with a commute and find ways of making that time valuable to themselves. Ray Zinn: But are you getting more time? Or you, seen that your employees, you’re working a little longer because they know they don’t have to commute. Gerry Sweeney: You know, that’s really harder for me to actually if just on the spot there, because I’ve never really thought about it. I’ve never really looked for it either. I would say we’re getting at least the same level of productivity and output overall. People are definitely accessible and available, which is of course very, very important. People tend not to disappear, which is another big risk, disappear off the radar for long periods of time. So I think without having any sort of empirical evidence, I’d probably say, I don’t think it’s really changed for us. Ray Zinn: So you’re watching for keyboard clicks or mouse moves or something like that? Gerry Sweeney: No, no. Absolutely not. No, no actually the complete opposite to that. I think what we’re trying to do or what certainly what I’m trying to do and encourage everyone to do is to measure people’s overall contribution, their value contribution to the business. Not what time they switch on, what time they check in, any of that kind of stuff. Ray Zinn: Okay. So bottom line, do you see more efficiency or about the same as they did when they were working, face to face in the office? Gerry Sweeney: So far to me it feels like about the same, which for me is actually a very good outcome. I think, if that’s what we get and people’s quality of life is improved while our costs are reduced that’s an all round win really. Ray Zinn: Well. You know, they don’t have to get really dressed up. They don’t have to spend a lot more time getting so fixed up as you were to go to work. Get getting a lunch packed, jumping in the car and maybe doing other things. So there is a big efficiency working from home. But do you require them to have a special room or can they still have the family around while they work because not everybody has a home that allows them to have a separate home office? Gerry Sweeney: Yeah. There’s two, parts of that answer if I may. And I think there’s a really, really good point you’re raising Ray? So the thing is we don’t have any specific requirements. We do from a health and safety perspective, require them to have reasonable working environment for them. Now we don’t know what that means for individuals. Most of our people they are experienced people. So I don’t want to bring age into it, but then, they’re people that as a typical rule of not living at home with their parents, that kind of thing. And so they’re generally independent and they do have the space and facilities. However, the second part on-site question, which I would highlight is it actually creates a really significant problem when it comes to hiring new talent, particularly what I’m going to term the younger players where you might want to bring people in out of university where they’re not necessarily in a long-term relationship. Possibly living at home with their parents. And those people tend to flourish more having a destination to go. So, you know, because they’ve been at home for the last 25 years or something. So, it’s an interesting challenge that the nature of the people you recruit, the way in which you recruit actually changes quite a lot. Ray Zinn: Are you going to limit them? And then then the younger set that might mean it might even be sharing a bedroom with a sibling, you know? Gerry Sweeney: Yeah actually. No, no, not at all. I think one, one of the management challenges I see for us as a company is to try and figure out how we facilitate recruiting people in those scenarios. And that’s very likely to bring us back into some kind of office environment of some form. However, it might be in the form of a training center or a probation center kind of, conceptually I’m sure we could come up with a better name than that. And possibly, we could locate that somewhere far more appropriate for the nature of the people we want to hire. So, some of the big universities, the big schools, we could go somewhere near there, where we like to find the people that would meet that criteria. Ray Zinn: So, let’s segue into a… We know all the positives. All the positives are very, very obvious. But let’s talk about the negatives. What are some of the negatives that you’re finding working remotely? Gerry Sweeney: I think the first thing I think I opened with, was developing and executing on management practices that are appropriate for remote working because you could hire an expert manager that’s been managing people for the last 30 years in an office environment. You bring them into an environment where there is no office, actually, it’s a very disabling environment for them. And so I think finding management practices that work and we can enable, for managers and also for staff, I think is a negative and it’s a difficult problem. There’s no, simple answer. People are still learning how to do that. I think another negative is loss of the social contact aspects. These are pretty important. It’s important to people. We’re fortunate that we’ve got quite a lot of developers and, you know, developers kind of like being on their own as a generalization. And, so that’s possibly not a massive problem for us across the board so, there’s that. The loss of visibility in contact, there’s definitely an element of that. If you feel that, if you’re used to measuring or judging people’s performance on what you physically see and what you observe and the interactions you observe and so on, that’s very difficult to do because you only get to interact and observe people, in planned meetings or on a one-to-one basis on a Zoom call or something like that. Ray Zinn: Bad habits can really crop up very, very quickly, don’t take long to get set in place. In fact if you’re develop a bad habit, only takes a few days and then it takes hold. So, how do you detect if you see any bad habits developing with your individual employee? Gerry Sweeney: Yeah. You know, I’d say, I think we’re probably still figuring that out to some degree. If we have good ways of measuring people’s contribution, the way I think about people’s contribution in the company, it’s not, the metrics we can kind of automate and measure that which is another thing. A typical manager would like to do is put stats in and measure that and base performance on that. But so, not things like counting lines of code or numbers of defects fixed, or numbers of calls on a service desk take, and these metrics are no good. I think what are the things I look for? I look for output, I look for visibility. And when I talk about visibility, I don’t mean physical visibility. I mean, how visible is an employee to the company, not to me as an individual, but to the company. Are there anyone disappearing off the radar for extended periods of time, or those kinds of leading indicators. And then you’re into fairly normal management practices where you got to go and look at them, look at their work, look at their output, look at the time they log on and all that kind of stuff to see if there’s any problems there. So, that’s, I would say that you’ve almost… To be successful managing people remotely or working with people remotely you’ve almost got to not focus on the traditional things, because the reality is when people is at home, their dog is going to get sick or the cat is going to fall off or wherever something’s going to happen. You know, all the kids are going to be screaming or someone’s going to come to the door, whatever it is. So you’ve got to be able to not worry about that stuff. And you’ve got to focus on the other stuff, which is much harder to measure like contribution, participation, the sort of team visibility and so on, so forth. So, that would be how I would try and think about it. Not that I’m an expert just to say, we’re still learning. So let’s just. Ray Zinn: Well this is all very interesting because, with this pandemic and people working remotely a lot, I mean, there’s a lot of companies that are there are still operating remotely. Those that can’t, obviously there’s companies that can’t because they need the interaction with the customer or the client or the patient or whatever. So this is not going away. I mean, we’re going to be saying this remote or a hybrid of this remote going forward. Gerry Sweeney: Definitely. Ray Zinn: I’m on the board of a small SaaS company and they don’t want to work totally remotely. They want that presence. They want that customer to see that they have an address and a phone number that looks like a business with a receptionist or somebody that’s answering the phone or whatever. And so they’re really worried about people thinking all, you’re just a little fly by night outfit because you’re working remotely. But I think customers are beginning to understand and accept the fact that the companies are going to be more remote in their work environment. Gerry Sweeney: Yeah. I think you’re right to highlight that. And I think for startups and stuff, especially if you’re a small say tech company trying to sell to very large companies, I think that that does definitely create a problem. But there is a provenance in any business. Of course, if you’ve been around enough and you’ve got enough exposure in a customer base, you’ll get to a certain momentum where remote working in today’s climate really ought to not be a concern for people. They can generally see certainly in the UK here as a limited company, you have to be of a certain size to be limited company. Then you’re forced to publish your accounts and so on. And so, and that’s all for the public records. So it’s very easy, to look at a UK company of any kind of substance and get a good sense of how they look. But I think it will be absolutely crazy for organizations now to expect certain kinds of companies to necessarily have a big flash office, a big HQ and all that, because, while that’s great and while it looks good and it’s good for the ego and all that good stuff, the reality is, it’s a lot of wasted money. The worst scenario I think is where you’ve got employees now are going to be almost demanding, I think that they want to work from home some of the time. So if you’re going to force them back, they’re going to try and do that, right? So now you’ve got to rent office space, which you know, is going to be empty 40% of the time or 50% of the time. And any major city in the world office spaces like the business is single biggest expense by far. And, you’re in a situation where your organization would almost be held to ransom by the property itself because of the cost of holding something that’s largely empty. So, I’m sure businesses will adapt and adjust. And I think the positives far outweigh the negatives. And just as one example, I know we know what the policies are, but I can tell you now me as someone that’s been founder of this company for 25 years, whether I believed it or not, in reality, when I really thought about it, my hiring pool, my talent pool was 25 mile radius of where we’re located, just outside of West London. During the pandemic, we hired five or six people. None of them are in that distance. In fact, they’re in different countries and everything. So massively positive advantages over sort of being pinned to that sort of central location. Ray Zinn: Excuse me Gerry but you know that we need to wrap this up. But, in our country, the H1 visa people, which are people that are, coming in to work have to have an office. And so the laws are going to have to change somewhat if we’re going to have H1 visa people working remotely because technically they could be in Timbuktu or as you said that in India, in Russia, Afghanistan, wherever, and there’s no need for H1 visas if they’re working remotely- Gerry Sweeney: That’s, exactly right. And the laws will change of course, because it’s in the local government’s interest to allow those people to work locally so they can get taxes. Because of course, you as a business, you don’t have to pay employment taxes if you’re employing someone overseas. Ray Zinn: Exactly. Gerry Sweeney: Now you don’t have to pay local taxes. So I don’t see that as being a barrier. Of course, it raises a very interesting question, how you bring someone over on an H1 visa, get them into some physical location where they can live and sleep and then work. Of course, that does present a problem. I think that’s very similar to the problem you have trying to hire the students, the younger players who are coming into business where they’re perhaps working from home or sharing a bedroom with a sibling, as you said. There’s challenges around these sorts of areas for sure. Ray Zinn: Well, this has been a very fruitful podcast, and I really appreciate you coming on today, Gerry, to share these thoughts. I see that and from my point of view, that we’re not going to be going back to the old, as you would office environment. That we’re going to have more of a hybrid or a full time remote access to work. And I think we’re going to have to get used to it. I think there’s some real efficiencies, travel time, having access to people that are not within the physical location of your office to be able to share and to do valuable work. So, thanks again, really appreciate your time today and good luck to you and your company. Gerry Sweeney: Thank you very much Ray. Ray Zinn: Yeah. As Gerry said if you want to know more about Hornbill, just look at hornbill.com. To learn more about Tough Things. First, go to my website, toughthingsfirst.com. Read my book, Tough Things First and my new Book Zen of Zinn 2. You can find it in your local or online book retailers. So thanks again, Gerry. We appreciate the time you’ve spent with us today. Gerry Sweeney: It was a pleasure. Thanks for having me.
14 minutes | Jul 28, 2021
When should businesses borrow? That question is prime in their era of very cheap money. Ray Zinn, Silicon Valley’s longest serving CEO, knows and tells you now. Guy Smith: Hello again, and welcome to another episode of the Tough Things First Podcast. I’m your guest host for today, Guy Smith. And as always, we’re picking the brain, the wisdom, the experience of Silicon Valley’s longest serving CEO, Mr. Ray Zinn. Today, we’re going to be talking about cheap money and borrowing. Every business has a temptation to borrow money. I think every human being in a capitalist society has a temptation to borrow money. We are, at least as of the date of this recording, still in a period of exceedingly low interest rate, cheap money. This brings forward the questions that I think our audience is interested in. When is debt the right thing to do? When do you know that the cheap rates are as good as they’re going to get? How should you balance your borrowing against your cashflow, et cetera, et cetera. So with that, Ray, hello. Good to talk to you again. Ray Zinn: Well thanks, Guy. Good to be with you this morning. Guy Smith: Always a joy to be with you. Now, we have cheap, cheap, cheap, cheap money. I get to say that because I just closed a refinancing of my house yesterday and I’m just still stunned at how little I’m paying for cash right now. Ray Zinn: You mean for interest, the interest rate? Guy Smith: Yeah. Ray Zinn: Okay, cash. Right. Guy Smith: When it comes to business, there’s always a temptation to borrow money. I think some companies borrow money because they’re not frugal internally, and they think they have to get excess capital from the outside. Let’s first start off by talking about when do you think it’s right to borrow. What are the key elements that say borrowing is really the only thing that we should consider for this particular situation in our business? Ray Zinn: Well as you pointed out, money’s really cheap now. I’ve never seen it any cheaper than it is right now. It is about as cheap as it’s going to get. Any of you who have your money in money market or in treasuries, you’re getting less than a percent back on your money. Obviously, if you’ve got cash, you’re not going to benefit from that by borrowing because if you put your cash to work, you’re not going to get much for it. You might as well use your cash, unless of course you don’t have the cash. And then, of course you don’t have much of an option other than to go out and borrow. But you’re not going to find, over the next couple of years, you’re not going to find money any cheaper than it is right now. If you have your ability to refinance your business, refinance your building, refinance your home, whatever it is you can to refinance to get that lower interest rate, you ought to do it because I don’t see interest rates going up at least for the next couple of years. Now’s the time, if you are in need of money and you have the ability to go out and borrow, now’s the time to do it. They’re almost giving it away. In fact, I would say they are giving it away. Guy Smith: I’ve got to believe that this applies to so many businesses out there that may already have a debt load, and have an opportunity to transfer that debt to a new lender and shave several interest points off of what they’re currently giving to the bank. Ray Zinn: Absolutely. What I did actually is I took some of what I was going to pay for taxes and I invested that in the market. And then, I took my line of credit and I borrowed on my line of credit to pay my taxes. Because I was gaining about four-and-a-half to five percent using my money to invest in bonds and some stocks, and paying only a couple of percent on my borrowing on my line of credit. So I’m picking up two, or three or four percent by using the bank’s money that I borrowed rather than my money, because I can’t use my line of credit to invest with. So I take that I money that I earn and dump it into the market and then use my line of credit to pay my taxes. I’ve got to be careful because someday I’m going to have to pay that back. But right now, it’s cheaper for me to borrow the money to pay my taxes than it is to actually use the money that I would have used for taxes and put that back in the market. Guy Smith: That is a clever little do-si-do. I wish I had a tax problem big enough for me to justify doing that, but maybe down the road I will. Well, let’s get back to the business side because businesses occasionally are just way too tempted to borrow. What are the legitimate triggers for borrowing, regardless of what the interest rates? And, how would a lower interest rate change that equation? Ray Zinn: Well, if you have the ability to borrow, depending on what you have to collateralize the loan with, you can use it for buying property, investing in your building. Maybe you’re renting instead of owning, you might consider buying your building, therefore you would eliminate that monthly rental or lease payment that you have to make. Those are the kinds of things you can do. If you need new equipment, if getting new equipment will help your efficiency and make your business run more efficiently, then you could use it for that. Don’t borrow money for things that have no physical value. Borrowing money, for example, to go on vacation or to eat out. I would say just going on vacation, then those are the things you want to avoid. Borrow money for tangible things, things that you can collateralize, that have value, long-lasting value not just to, as you say, a vacation. Guy Smith: Well, to my mind, one of the great things that cheap money facilitates is the ability to move forward on strategic things that may not have been possible in the past. Your semi-conductor industry, we know that building a fabrication facility is way, way expensive. But, I’ve got to imagine that there are situations where, when money is really, really cheap, a company can then take the risk and say, “Okay, we’re going to bet bigger than we could have last week to do something, to buy something, to make a strategic change that’s going to put us one step ahead of the competition.” Ray Zinn: As long as it’s collateralize-able. In other words, if it’s physical, even inventory, if it’s something that’s physical, then yes. But not on intangible vacations, or just things that don’t have lasting value. Whenever you think about borrowing, make sure it’s got a physical relationship, in other words that you can actually collateralize it. That’s the key because at some point, that interest rate’s going to go back up again and you might have to dispose of that asset to pay off that debt. Guy Smith: Yeah. Now, is there any category of spending that you’ve seen other companies borrow against which you figured was foolish? Is there something that some business leader is really tempted to go to the bank and borrow on and they really, really should not? Ray Zinn: Well, things that depreciate fast like cars, and boats, and airplanes and stuff like that. You want to avoid that, okay. Another example, even though this is one of the hot topics that we’re discussing now, is your educational borrowing. In other words, people who are borrowing money to get an education. That is an intangible, meaning it’s not something you can collateralize. Now, you can gain something from it when you put that education to work. But a lot of people are just running a big, massive educational debt, student loans, and now they can’t collateralize that so that’s something that’s going to be hanging over their head for some time to come. I think those interest rates are pretty fixed too, on student loans. If you can figure some other way to borrow, but not against the intangible, but not against these things that don’t have tangible value that you can collateralize. Avoid anything that’s not tangible. That’s what you want to do is just make sure that whatever you are purchasing is tangible and has lasting value, something that’s going to have at least a five year lifespan. Guy Smith: Even if it’s intangible, a little bit of careful thinking about what to do. I was having a conversation the other day with an air conditioning repair guy. This was a guy who, right out of high school, decided to go to trade school because it was cheaper, he could see what the rate of income for somebody who repaired air conditioners were, et cetera, et cetera. He was cursing up a blue streak because some politicians want to cancel student debts for guys who went off and studied Russian literature. Ray Zinn: Yeah. Guy Smith: He felt really cheated that he spent money out of his own pocket to go to trade school and he was now being asked to give tax money to finance other people’s education that lacked any real economic value. Ray Zinn: Yeah. Well, that’s going to happen. With this spreading of the wealth as they say, or reallocation of wealth, you’re going to have that happen. Life is not totally fair. There are going to be things that are going to work for you and work against you. Even when Donald Trump lowered the taxes, it actually went up for me because I had two pieces of property and I could only write off the taxes of one of them and actually, my taxes went up. But, other people’s taxes went down. It depends, again, where you are when things change. It may be that you’ll end up paying off your student loan and then somebody else gets it for free, but that’s just the way it is. That’s why we live in a democratic society. Not everything goes in your direction. Sometimes it will, sometimes it won’t. Guy Smith: That’s very true. One of my favorite writers, P.J. O’Rourke, his teenage daughter once shouted, “Well, that’s not fair!” He said, “You’d better hope it doesn’t get fair. You’re a white female in America, things get a whole heck of a lot worse than that.” Ray Zinn: That’s true. Guy Smith: Well, thanks again, Ray. For the audience, if you find this podcast compelling then you’ve seen nothing yet. You need to go get a copy of Ray’s book, Tough Things First. In the annals of business and leadership books, Tough Things First is arguably the best one that’s out there. Not only is it a top-to-bottom study about entrepreneurship, leadership, management, executive thinking, but a whole bunch of wisdom into how all of this ties together. And also, as part of a humanistic organization. By all means, it’s got to be on your must reading list. In know for a fact it’s required reading at at least a couple of business schools in America. If you have not bought it and read it, do so before the day is over. Ray has two other books out there. Zen of Zinn, Z-E-N of Z-I-N-N, and Zen of Zinn Two. These are small, little, bize-sized nuggets of wisdom covering everything from management, to humanity, to leadership, to life as we know it, the nature of honesty in relationships. And, if you’re looking for holistic thinking about life in general and how it intersects with business, you’re going to be hard-pressed to find better material than these three books. Ray, again, thank you very much. Always a joy to share some time with you and look forward to doing it again. Ray Zinn: Well, thanks, Guy. And again, those two new books, the Zen of Zinn One and Zen of Zinn Two, are golden nuggets. In other words, if you like mining gold, you’ll love these two books. Thanks, Guy, for this podcast.
20 minutes | Jul 14, 2021
Disaster Planning for Business
Ray Zinn, the longest serving CEO in Silicon Valley has seen business disasters come and go, and dodged many of them. In this episode of the Tough Things First podcast, Ray discusses how to plan for unplannable disasters, and even the common ones. Guy Smith: Hello again, and welcome to another episode of the Tough Things First Podcast. I’m your host for today, Guy Smith, and as always, I’m really excited to have a chat with Ray Zinn about a topic which I think is on everyone’s mind. 2020 has been a heck of a year with the pandemic. Businesses have had to react to a disaster which is normally not on their books, normally not in their planning. Ray has been through many up and down cycles, many disasters in business, and we’re going to have a chat with Ray, the longest serving CEO in Silicon Valley, about how somebody in business, how a business leader can plan for disasters in general, but also for these whopper disasters that come around maybe once in a lifetime. So hello, Ray. Great to be with you again. Ray Zinn: Well, thanks, Guy. Yes, it’s great to have you on the podcast with us. Guy Smith: Always enjoy doing it. It’s exciting, it’s intellectually stimulating, and I learn more about practical business working on this podcast than anything else I get to do during the week. So let’s dive right into it. 2020 has been a disaster. Pandemic has really racked a lot of businesses, from the small to the large, so why don’t you give us first your perspective about what is the difference between a normal disaster, a run of the mill business disaster, and something exceptional about an event like a pandemic, and why this changes the way the business leader might do their disaster planning? Ray Zinn: Well, Guy, I like to think of, all disasters are disasters. I mean, there’s no good disaster. And you could say that depending upon the kind of business you run, one kind of a disaster could impact you more than another kind of a disaster. So for example, if your company was a clothing company and you could switch to making face masks and other protective clothing, this disaster is actually a boom or an advantage. A disaster for one person can be a boon for another. For example, when you get a cavity or you break a tooth, that may be a disaster for you but it was a great thing for your dentist. Or if your heart goes bad, that’s a disaster for you but it’s a great thing for the heart surgeon. So there’s always a… For every dark cloud, there’s a silver lining for someone else. So again, depending upon the kind of business you’re in, one disaster could be a boon for another business. But not withstanding that, trying to plan for something that will impact your company, presuming your company is not going to benefit from the disaster, is what we’re really talking about today, and that is to be prepared. As I say, plan for the worst but hope for the best. And so make sure you have sufficient cash reserves to hold you through the disaster. I like to think that three to six months is a minimum. This particular one, the pandemic that we’re currently facing, has gone nine months so that’s a little extraordinary, because generally, these disasters tend to start slowing down in about a year, year and a half, something like that, so that they kind of recover in about that time period. This one may recover in about that time period too based on what we’re seeing. But if you can have at least three to six months worth of working capital and reserves, that’ll definitely a way to stave off the effects of it. The other thing is of course to have a good relationship with your employees. Your employees can withstand a disaster if they know that you’re in there with them, if you’re actually feeling the pain just as much as they are. And when I was running Micrel, the thing I like to think of is treat my employees like family, and families stick together. And my employees were willing to do whatever it took to keep the company going because we had a good relationship with our people. Guy Smith: All great points, and in terms of businesses that actually benefit from disasters, that’s not really all that educational for the audience today but it is fascinating to watch. I have a friend who owns a factory and they make valves, and about three months into the pandemic, I was wondering how his business was doing. And he very sheepishly said, “Guy, I hate to say it but business has never been better.” And the reason was that a lot of the valves that they make go into medical equipment, and the demand for that medical equipment had just spiked through the ceiling. So yeah, some people do definitely walk away from disaster better off. But on the flip side, let’s take something like your local mom and pop restaurant. The pandemic and lockdown really started back in March. Given the timing of when the vaccine will be available, it’s probably not going to be until February or March before they can be fully back open again, and that may even be optimistic, so we’re looking at a year of a severe shutdown. So for the average startup, let’s talk about startups for a second. What did you see that they did well or did wrong, aside from not having enough cash in the bank, in reaction to the pandemic? What were some of the things that were obvious and smart survival tactics? Ray Zinn: For those who can pivot, that’s the key, and if you’re a startup and depending upon what kind of a startup you are, being able to pivot to keep yourself alive is key. So one of my grandsons, he’s graduated already but he lost his job during the pandemic, and so he was struggling to keep his family going, and so he started doing YouTube videos and selling those. And I thought that was kind of a cute thing to do, so he pivoted. In other words, he just said, well, rather than just stay home and do nothing, I’m going to see if I can make lemonade out of these lemons. That’s the kind of thing that you need to do if you’re a startup, is you have to pivot if you want to stay in business, so you’ve got to find ways to earn money. Another one that comes to mind is this person was running this pet salon where they do shampooing and combing out the pet’s hair and nail clipping and so forth, and so because of the pandemic, they had to shut down their store. But they went and got a couple of vans and then they went mobile. And even though they did social distancing, they were able to go to the client’s home, and there, they were able to service those clients by actually going to their location to take care of their pets. So again, pivoting, that’s the key. These mom and pop restaurants, as you’re talking about, rather than sit down dinners or meals, you could pick them up. They actually had ways for people to drive to the curb and then the employees would come out, actually deliver the meal to the customer. So again, pivoting is the key. Just because you’re down, you don’t have to be out. Guy Smith: And that relates to the barbecue restaurant right down the street from me. Being a Southern boy, going without barbecue is considered a cardinal sin, and when the pandemic came in, they pivoted hard, hard, hard to the takeout and delivery motif, even incorporating it into their loyalty advertising to people like me, doing very cute things like saying, life without barbecue is meaningless. Let us add meaning to your life. We will deliver your barbecue on an emergency basis to your house. And they found a way of keeping the customer base and even possibly expanding it during the pandemic. And let’s touch on that for a second because customer loyalty I think is one thing that’ll get a company through hard times better than just about anything else. Talk a little bit about what you’ve seen during the pandemic in terms of companies that have great customer loyalty, or maybe marginal customer loyalty, and what that’s done in the way that they can get through. Ray Zinn: Well, as an example, during the pandemic, my wife had a difficult time getting her hair done. So she tried to get ahold of the owner, the salon owner, but wasn’t able to. And so she just said, okay, so much for that hairdresser. She went out and found someone else to do her hair who was more flexible and more willing to take some chances, I guess is a better way to say it, and she was able to keep having her hair taken care of. So again, loyalty is extremely important, no matter what business you’re in because your customers will stick with you if you have the right attitude toward client service. Especially during a difficult time like a pandemic, you want to be on the phone, texting and emails with your clients regularly, even more so than during regular times or non disaster times. Guy Smith: I think I’ve seen a lot of that from small to large businesses, the ramp up in terms of any outboard communication seemed to increase. I’m willing to just ballpark this at about 25%. Everyone seemed to believe that staying in touch with the customer was not harmful and probably necessary in terms of staying top of mind during the pandemic, but also after the pandemic resolves itself. Did you see any large companies who did not do well in response to the pandemic? And how did they stub their toes? Ray Zinn: Some of these airlines that were not flexible, they were still charging you for changing your reservations. I think they suffered. Now, many of them did get off of that kick and didn’t charge for changing your reservations. During this pandemic, I mean, everybody is going to suffer, and the last ones you want to suffer are your customers. And so you want to make it as convenient and as good an experience as you can for your customers. Some of these computer companies didn’t do a very good job either because they kept complaining that they had a hard time getting parts. In other words, that parts suppliers were the reason for their not being responsive and taking care of their customers. And so that was another large industry that I don’t think did particularly well during the pandemic, especially with people having to stay at home and run their business or run their employment from their home. They need to have access to their computers and to their network. Some companies did well in taking care of their customers, others did not do so well. Companies like Zoom I think did a pretty good job. They jumped in and actually made it convenient for their customers to use their product, but also some of these other, WebEx and so forth didn’t do so well. So depending upon the kind of services you wanted to provide, don’t blame your demise on someone else. Just accept the responsibility to satisfy your customers and not let them suffer because you’re having to suffer as you would. Guy Smith: Very good advice on that one. So planning for a normal downturn, a normal disaster, you’ve said anywhere from three to six months of cash in the bank, being close to your employees, but how should a business leader incorporate mass scale disasters into their forward planning? It’s maybe a once in a lifetime event, but should a business leader be incorporating that? And if so, what precautions should they have in place in order to deal with something this big? Ray Zinn: Well, as you know, all these emergency companies, emergency governments have had their disaster preparedness, and they go through drills and they go through all kinds of rigmorole to practice for a disaster. So the fact that you may not be having a disaster doesn’t mean you don’t want to plan for it. So depending upon the kinds of potential disasters you’ll have in your area, whether it be fires or floods or hurricanes or whatever, preparing for it, even though it hasn’t happened yet, is key. And I think the people in California saw that with the problems they were experiencing with these fires. They harangue the public utility company that supplies power to the point where at the drop of a hat, they would shut off power for fear of getting lawsuits and other problems. So preparing for a disaster is necessary. As I said, plan for the worst but hope for the best. So I’ve been involved as a ham operator in a number of disaster planning times. We just recently did one here for earthquakes, so even though we weren’t having an earthquake, we all checked in at a certain hour, at a certain time, just to make sure all of our gear was working and that we could communicate in the event of a disaster. So plan for the worst but hope for the best, that’s the key. Guy Smith: And before we wrap this up, let’s talk a little bit about the interaction with employees during the disaster. Now, one part of that is of course the normal leadership practices, stay calm, keep on course, blah, blah, blah. But a lot of companies had to make some harsh trade-offs in terms of furloughs, layoffs, outright terminations, rescinding of Christmas bonuses, et cetera. Let’s coach a couple of startups here, what the wiser trade-offs that a company can make when they have to go to their employees and say, this is a long-term problem and we have to make some changes. Ray Zinn: Well, we think we talked about that earlier, and that is as long as you’re willing to suffer more than they are, for example, when I ran Micrel, we had a number of disasters. I always made sure that if there was time off, I took twice as much time off as employees did. If there was a pay cut, I made sure my pay cut was two to three times more pay cut than they had to suffer, and so I just want them to know that I was in it all the way. As they say, are you in it all the way? They didn’t have the feeling that I was taking advantage of the situation. Guy Smith: Wow, and I think that’s good advice for anyone, shared suffering or at least a commitment to your employees through demonstrated self-sacrifice is one of the things that keeps employees motivated, keeps them believing in the mission and the vision and the company, and staying on board. Because during a disaster, sometimes employees leave if they think their future prospects are not going to be all that great. Thank you, again. This has been enlightening and informative, as it always is. For your audience, if you need a massive dose of leadership, management and executive thinking thought, by all means, get Ray’s book, Tough Things First. I’ve read a lot of management books in my day and this is the number one as far as I’m concerned, because it’s comprehensive and it leads the new startup CEO basically through all the rigors that they need to understand in order to run a successful business. Ray’s second book, Zen Of Zinn is also out. More philosophical, but what I like about that book is it kind of ties together the philosophies of humanism, of being part of society, about being part of an organization, so that you can see how the human aspects affect a business and how business affects humanity. In this age of conscious capitalism, Ray shows that this is not a new thing. He’s been doing it for a long, long time. And just to tease the audience, there will be a Zen Of Zinn Two I hear, sometime in the spring most likely, so keep your radars tuned in for that. So thanks again, Ray. I appreciate it. I look forward to talking to you again. Ray Zinn: Well, thanks, Guy. I enjoyed having this podcast with you.
29 minutes | Jun 30, 2021
Sales and Expansion
Sales drives revenue. But selling has changed when the internet and technology made mass marketing available to everyone. In this Tough Things First podcast episode, Ray Zinn is in conversation with Aleks Gollu, CEO of 11Sight, to discuss sales effectiveness in the 21st century. Ray Zinn: Hello, everyone. Welcome to another fantastic Tough Things First podcast, it’s great to be here with you today. And I have a very special guest that I’d like to introduce and let you know a little more about him. This is a friend of mine, Aleks Gollu, I’m so delighted Alex to have you on the program with me today. So let’s hear a little bit about yourself please. Aleks Gollu: Thanks Ray, and it’s definitely an honor to be here with you talking. My career has evolved as that of a serial entrepreneur. I did my undergrad at MIT, then I did a PhD at UC Berkeley. Those were all in electrical engineering, computer science. And back at the university, we were working on automated cars, automated highways, this is late ’90s. But one of the other PhD students, Farokh Eskafi and I, we were more entrepreneurially oriented than just academically. So we had it in our head that we wanted to do a startup, and this was like the dot-com era just about to begin. So right after the PhD, [inaudible 00:01:49] and I did a startup, this is a time where Motorola StarTAC is the most advanced form, Netscape is new. So we told people, “Hey, come to our website, tell us what you’re interested in, and we’ll send you SMS messages with your stock prices, your sports results and so forth.” So that company we sold to a competitor, then both Farokh and I, we saw RFID emerging. He being more technical, he built in a new RFID chip that did location tracking, and he ultimately sold that company to Maxim Integrated. And I used RFID readers off the shelf to build a yard management solution that made transportation aspect of supply chain more efficient. In today’s language, we were an IOT company in the Cloud. Back then, we were a SaaS based yard management company that combined RFID and user input to improve trailer life cycles in yards. Now, after that, we both saw video as a communication means of the future. And that brought us, Farokh and me back doing a new company which is 11Sight. And what we do at the 11Sight is we bring businesses and customers closer together. We provide the fastest way to connect, the simplest way to engage. And the net result is increased revenues and improve customer satisfaction. So that’s basically me in a nutshell from ’83 arriving in US, to sitting in north of Berkeley in El Cerrito today talking to you. Ray Zinn: Thank you. It’s so good to hear that background too, because it’ll give our audience a little insight as to who 11Sight is, and as well as who you are Aleks. Now let’s talk about the subject that you want to discuss today. So why don’t you take it off in there, tell us what we’re going to talk about, and then let’s just launch right into it. Go ahead. Aleks Gollu: Yeah. So as we focused on video, we said, okay, videos communication means of the future. We all know Zoom, the meeting problem online, meeting problem is solved. We all know about the WhatsApp, Skype or FaceTime. So two friends talking, that’s taken care off. We wanted to see what else video can do for people? And what we noticed is that there is this increased friction in the way businesses interact with customers. And as we dug deeper into it, what we realized was that this is a friction that us technology companies and Silicon Valley have created. We have introduced AI chatbots, we have introduced forms. And when a customer wants to talk to a business, it takes two to five days to get that first face-to-face meeting. Maybe you schedule something with Calendly. And that basically is the problem we wanted to focus on and better understand, is why is it that businesses are not ready to just simply pick up the phone, and here I say, “phone,” than a potential prospect and customer calls? Because back in the ’80s, as a sales guy, when your landline rang, you were more than happy to pick it up, and you had a personal conversation. Today, the opportunity exists to be able to do that on any device and people can call in also on any device. We have the technology to connect with video, with audio, anytime we want. And yet there is this reluctance of, “Well, let’s not talk real time. Let’s schedule a meeting, I’m going to go do some research about you, and then we’ll talk.” Ray Zinn: That’s a problem that we’ve been facing since day one. With the Zoom meetings as you would, or the new technology being able to connect with audio, with good audio and good video does change things. I have a saying, “Out of sight, out of mind.” So with just a phone call, as “Your phone call,” there’s no sight. So when we say, “Out of sight, out of mind,” we like that face-to-face, and if we can improve, as you would, the connectivity between the customer and the salesperson, I think we have a winner. We learnt that through this pandemic, everybody was on this audiovisual method of communicating. So I think this is really the wave of the future. It not only saves money and time, it’s more convenient to set up these meetings. Aleks Gollu: I definitely agree. It used to be that I would have to get up, drive to South Bay, have a meeting, maybe have a coffee, have another meeting, drive back, and that would be the day with all the bay area traffic. I now have the ability to do that in the first two hours of the day, and there is equal amount of connection in those meetings that I do online. Okay, so it’s not the same as breaking bread with somebody, but if you can see each other, the facial expression to just the gestures, that does build a relationship between you and the other party, and it also engenders trust. And trust is a very important aspect of sales or building your relationship between a business and their customers. Ray Zinn: It reminds me, back in 1974, yeah ’74, I was working for a company called Electromask. And I was their Sales Manager, National Sales Manager, and one of my customers was TEI. And so, I would take an airplane from San Jose to Dallas, and I’d go into the lobby and I’d say I want to talk to so-and-so. And next thing I knew, I had two guards rushing me out of the building. And so I said, “What’s going on here?” And they said, “We were just told to usher you out of the building.” So I hopped back on an airplane and flew back and told my boss. I said, “Well, that didn’t go over very well.” He said, “What do you mean?” I said, “Well, I went there, took that three and a half hour flight, and all I got was they just threw me out of the building.” He said, “Well, did you make contact with your customer?” “Well, I couldn’t, because they wouldn’t let me.” And so he said, “Well, get back on the airplane and this time be more sincere.” And I said, “What? Okay.” So I sent a letter, because back in those days, we didn’t have this technology we have today. Aleks Gollu: Mm-hmm (affirmative). Ray Zinn: I sent a letter to my customer saying I was going to be there on a certain day, and I would like to set up this meeting. And he never responded, but I dutifully got back on the airplane, flew back to Dallas, three and a half hours. And same thing. There, here come two guards, lifted me up, and literally tossed me out, tore my pants, and I ended up flying back again, no contact. So my third time… This is in my book by the way, I think anyway, Tough Things First. So my third trip, I didn’t want to go, but my boss said, “You must go, and you must make contact.” So what I did, went back again dutifully, two and a half hours. And this time, I’m sitting in the lobby, thanks coming, “okay. How am I going to get this guy to come down and see me?” So the receptionist said, “Well, who may I say is calling?” I said, “Tell him his brother is calling.” And so, pretty soon, down comes this fellow, my customer that I wanted to meet with, and he’s looking around, looking around, and then he goes over to the receptionist. I could hear him kind of say, “Well, where’s my brother?” And she pointed over to me and I had this Cheshire grin on my face, and he came over and he said… His hand was on his hip. He was red in the face, “How dare you still tell them that you’re my brother?” I said, “Aren’t we all brothers and sisters under God?” And he started laughing so hard. He took me upstairs and we started talking about this product that I wanted to sell them. And it really began the biggest order the industry had ever had by first equipment, semiconductor equipment ever had. And that’s when I launched the Wafer Stepper, was there at that meeting with TEI. But that’s what it took. It must have been 12 or 14 hours back and forth of flying just to set up this meeting. So hey, I had this technology, been available to me back in 1974. I could have saved myself, lots and lots of time. Aleks Gollu: That’s a good story. It’s amazing that back then, people were willing to work so hard for a face-to-face meeting and take all those flights. And today, you can do that even from the comfort of your home, and people are just now being hesitant of just answering an incoming call. So that’s basically, I think what’s going to happen in this post-pandemic era, now that we have gotten used to meeting people online. A lot of this interaction that used to necessitate travel or scheduling meetings and so forth, are just going to be at the end of a single click. Ray Zinn: Aleks, well, let’s look at this one though. How was I going to make contact with my customer using this technology when he wouldn’t take my call? See, what I did is I had to come up with the story to get him to do it, but see, when you have the technology, he can just ignore me. He can just disconnect, or he can just not take the call, he won’t join the meeting. So tell us, how would I be able to pull that one off using this technology? Aleks Gollu: That’s exactly where the marketing or understanding your customer and your customer’s needs come into play. You basically said, “Hey, we are all brothers on the God,” and you basically said his brother is here. So if you can find something that’s relevant to your customer, that’s value to your customer, you can easily send an email or send out some information that will resonate with the customer’s problem. So the goal here is not just to sell, but to create value, to solve a problem of your customer. So if you have the right audience and if you are providing the right value proposition, the customer will be more than willing to call you. It’s also true that in this day and age, that everybody is reaching out to everybody on LinkedIn and on emails and Facebook ads, and so forth. And yet, in all of that noise, some messages, some outreach actually stands up. It comes to being able to be relevant, to add value to your customers, and let them come to you. And things have also changed the way people do shopping because people do their homework first by themselves, and typically down select to a couple of vendors or a couple products that they are going to choose from. And when a customer is in that mindset, this could be a business customer, this could be a consumer, that’s when they switch to the buying mode. And at that time, the customer is willing to reach out and place a video call because this is when they would step into a store or they would actually call it business and say, “Hey, we are interested.” Ray Zinn: Yeah, but the Aleks, the problem I think is with the reluctant customer. My son-in-law works for Dell and he’s the Sales Manager for Dell in Montana. And he’s having difficulty. He has the technology that we’re talking about. I don’t know which one he uses but go to web, I see web. I don’t know, anyway, he has one that he uses. Aleks Gollu: Mm-hmm (affirmative). Ray Zinn: And still, the customer can just still shut him off. He can just not be willing to accept the link, click on the link. Somebody’s going to click on that [inaudible 00:14:50] link. So what he’s having to do and difficult customers, he’s still having to go down to the lobby and try to figure out some way to make face-to-face contact with this guy, taking him to lunch or dinner or whatever, because having to click on a link is… The customer has got to accept that. And not all of them are willing to accept it. I’ve heard his stories, he’s having difficulty just doing nothing, but these linked meetings. Aleks Gollu: It is true, there are multiple ways you can go and you can look for your prospect, right? If you’re selling to a very large enterprise, you have a dozen potential prospects and a dozen decision makers you need to connect with. And in those cases, I definitely agree with you, is you have to go park yourself in their lobby, figure out at which conference they are giving a talk… Ray Zinn: Mm-hmm (affirmative). Aleks Gollu: And you just go and attend their talk and catch them after the talk. Those are the standard tools that I have used. I’ve made contact with Kraft Foods, VP of Supply Chain at the time, when he was giving a talk. But then if you actually have possibly thousands or tens of thousands of users, or customers for your product, you cannot go to 10,000 different conferences so that you can make contact. At that point, you do have to play a little bit more statistically or strategically. You do an outreach to all those 10,000 and maybe a 1,000 are interested. Ray Zinn: Mm-hmm (affirmative). Aleks Gollu: You go to those 10,000 with the right message, with the right value proposition, that they will then self-select and say, “Okay, what this guy’s telling me in this email, or in this YouTube video, or in this Facebook ad, is relevant to me. Let me reach out to them.” So in those cases where you have tens of thousands of customers, and you want the customers to come to you in that inbound sales, and I think that’s where these online interactions come into play. Whereas if you are doing outbound sales targeted to very few people, you have no choice. You have to get on the road and you have to catch them somewhere in person. Ray Zinn: So what percentage of the time do you think we can contact them, vis-a-vis these online methods versus the face-to-face? You have any thoughts on that? Aleks Gollu: The way I would say is that there is nothing that replaces breaking bread or being in touch with the person directly. But the metaphor I use is that if you have a product and you are going to market, what is the market size, or what are the number of customers you are targeting? In my first company, we were selling to telcos. In US, there were five of them. Once we talked to them, that was it. We didn’t really need to do much of a marketing outreach because we knew the five customers that we needed to talk to. At Pink, which was my supply chain company, there probably are 500 companies with enough traffic in distribution center manufacturing plant yards, that we could initially down select to 15-20 of them and do whatever is possible to actually get in front of them. So in those cases, you definitely need to do outbound sales in the sense that you go to the customer, you catch your customer. But then there are a lot of solutions today, like our solution applies to any business 25 people and up, that has a VP of Marketing and has an inbound sales, strategic approach, because they do all these campaigns. They have a 100,000 different people, a 100,000 different businesses who could use their solution. In those cases, you can’t just go to all 100,000 to the office, you have to let them come to you. So that then becomes inbound sales. I guess the long story short is if you are doing inbound sales because you have a very large number of customers, you are serving online interaction is ideal. If you are doing outbound sales and you have some named customers, you need to get in front of, the old fashioned way is the best. Do whatever you can do to meet the decision-maker in person. Ray Zinn: Is there any way to do better marketing using your kind of tool or using some other go to meeting tool? Is there some way we can market better that way, as opposed just to sales? Aleks Gollu: I think that’s a very good point, is that there is sales, but you are not just selling, you are adding value to the customer. So the need of understanding your customer, understanding their problem, how you can create value to them, that hasn’t changed. Technology may change, but the way we conduct business, the way we interact doesn’t change. So you need to understand your customer, their problems, how you can create value to them. And your marketing needs to gear towards that. As you introduce your company, your company culture, how you work with your customers, that’s a good way of building trust in general. And then as you do your outreach to broader number of businesses for them to contact you, then they are going to be more willing to reach out to you because they’ve heard of you. Ray Zinn: I have this program I call ZinnStarter that I have at various universities, and I’ve been using this training method of trying to get these students to get their message across in a very short period of time. Customers, just like any of the rest of us, have short memories and they don’t want to sit around for an hour presentation. So what we need to do is come up with ways to get our message across in less than five minutes. I did that with you the other day, and I remember it was kind of funny. You went for 15 instead of five, and I said, “Aleks, we said five minutes. It took you 15 minutes.” We got to figure out customer… In fact, a good marketing tool, and I don’t know how we do it yet, I still haven’t figured it out, but we have to be able to get that message out in less than five minutes. That’s the way that you’re going to reach your customer. If they’ve got to sit through a 15 to 20 minute conversation, they’re going to click off. And so we’ve got to come up with getting people to understand that to get your foot in the door, you’ve got to have a very snappy, short presentation. Aleks Gollu: That absolutely true, and that’s the other thing with these scheduled meetings, is that there is this expectation that you’re going to spend half an hour, an hour to talk. And I interact with… I have customers who call us sometimes like at Sunday night at six o’clock, that did happen. It just happened that they were following up on their LinkedIn messages and they clicked on. So you definitely are correct that we need to have that skill of when my ear line rings when I pick it up, I need to make that connection in the next three, four minutes… Ray Zinn: Exactly. Aleks Gollu: And see if there is value that I can add to that customer, and if this is a proper prospect. And the nice thing about that incoming line is that you are no longer bound to this half an hour that has been allocated. It protects you, it protects the customer that [crosstalk 00:23:02] you make a connection, it’s great. Then you can stay as long as you want. Ray Zinn: Exactly. So the key, I think to get your message out there, it’s got to be short and snappy… Aleks Gollu: Mm-hmm (affirmative). Ray Zinn: Five minutes or less, five minutes or less max. So we’ve got to figure out, the customer has to… Or the salesperson, sales and marketing have to figure out how they’re going to get that customer to click on that link, to have a longer face-to-face meeting? And to do that, you’ve got to do it short, snappy, and it’s just… As I said, you and I have played that little game. I said, “Okay, Aleks, give it to me in five minutes or less,” and you went 15. And you tried your best, and it was not easy, was it Alex? Aleks Gollu: It definitely is not easy, especially in that case, I was doing the company presentation. There is a three minute version of it, like on Friday, I’m going to do a six minute version of it. And you can definitely… And if you are presenting to the VCs, there is a 60-minute version of it. But if you are engaging with your customer, that call can come in at any time. And if you know your product, and if you know your value proposition, you can engage that customer right there and then, understand their problem, how your company can add value, and then sort of move that relationship along. And there are actually tools that we provide in our solution that if a particular prospect calls you and they enter their email address before they call you, we can actually show you some information about that caller’s company, their business, and maybe even a couple of value proposition that you can mention. Ray Zinn: What we need to do, Aleks, is we need to come up with a way, and I don’t know if this is another business that could be looked at or how it can be done, but getting your message out in less than five minutes, that ought to be a business. That’s somebody that wants to be an entrepreneur and say, “Here’s how to get your message out in five minutes or less.” That would just ring with everybody, customers and marketing, sales, everyone would want that. I know as a customer, that I am not willing to listen to more than five minutes. So I think this is a key, this is another way that I think we need to think about reaching these customers and whatever method that is, whether that’s in-person or using these online tools, is to get that message out in five minutes or less. And that’s my goal. I’m trying to come up with, how do I convince these students that I teach to get that done in five minutes or less? Some of them, I’d say probably out of the 60 or 70 that I had this contest with, I think maybe 20% of them got their message out in less than five minutes, but that’s still not very good. We need to get higher percentage net to get that message out. So anyway, what do you think? Aleks Gollu: I definitely agree because a good sales guy should also be articulate, understand the value that their business generates for their customers. And when a call comes in, you should be able to just provide the value, understand your customer, where they’re coming from and move things along. Ray Zinn: The two most important things customers want is service and quality. Aleks Gollu: Yeah. Ray Zinn: That’s the two things they look at the most. So you’ve you got to show you’ve got the service and that their product has its quality. So that’s the key. Well, anyway, Aleks, thank you for taking the time today to speak with us and talk about your product, and kind of your thoughts about sales and marketing going forward with all the new technologies that are available. So if somebody’s trying to reach you, would like to learn a little bit more about you and 11Sight, how can they get hold of you Aleks? Aleks Gollu: So my ear line is vcall.link/aleksgollu, A-L-E-K-S, G-O-L-L-U. So type that into the URL of any browser, you will be calling me directly, or you can come to our company website, 11Sight.com. You can actually spell it out as 11sight.com or 11site.com. In the lower right corner, there is going to be a button, click that, click the sales department. You will either get to me or another team member. They have the ability to transfer the call directly to me. So [crosstalk 00:27:51] We are ready and available to talk to anybody whom we can add value, and in five minutes or less, we’ll see what we can do for you. Ray Zinn: That’s good. Well, thanks Aleks. Aleks Gollu: So it’s vcall.link/aleksgollu, and given where I come from, Alex is spelled with K-S, A-L-E-K-S, G-O-L-L-U. Ray Zinn: Well, thank you. This has been great. I really appreciate you taking your time to visit with us today and cover this important subject. So again, thanks for joining us today, everyone. We hope that you will come and listen to our podcasts going forward. We’re in the top 10 in Silicon Valley, you can look at our… Go to our website, toughthingsfirst.com, to learn a little bit more about us, and what we’re up to. My new book is out, Zenn of Zinn II is now out for all of you to go get at Amazon, or any other nice book retailer. And we just really invite you to join us every week as we present these podcasts. So again, thanks everybody for being with us today, and we certainly have enjoyed this visit with Aleks. Aleks Gollu: Thanks Ray.
13 minutes | Jun 16, 2021
Board Members come and go, but navigating a working relationship with board members good and bad is a constant. In this Tough Things First Podcast, Ray Zinn, who has experienced everything when it comes to boards, provides some profitable insights. Rob Artigo: Rob Artigo here, your guest host for another edition of the Tough Things First podcast with Ray Zinn. I’m a writer and entrepreneur in California being invited back. Always a pleasure, Ray. How are you? Ray Zinn: Doing great, Rob, good to be with you again. Rob Artigo: I think I have a good subject here, something that you are definitely familiar with, and that is a board of directors that you might have for your corporation, your company. In business, we have these board members that tend to come and go. I mean, they don’t stick around forever. If you’re fortunate enough to be like you, running Micrel and being around almost four decades… And so you have a board that, I’m assuming, was fluid. It changed over that time, because that’s just the nature of these boards. But sometimes you have people who leave, and you don’t really necessarily want them to leave, because you appreciate their input, advice, and their professionalism on the board. But then they go on and do something else, and they’ve got another board they join, or they just get tired, or they retire, because it’s just that time. They just leave the board. Sometimes, you have other board members who are a thorn in your side. I’m assuming you’ve had that experience, where you’ve had board members who you kind of wish they weren’t around the board anymore, but yet they never go away. Give me some thoughts to start off here about your experience with boards, whether you’re sitting on a board or whether you’re dealing with it as a CEO of a company. Dealing with board members, because not all personalities are going to gel well together. And some people, they find out that they’re maybe not meant to be a board member in the first place. Ray Zinn: Well, there are boards, and there are boards. I mean, a rose by any other name is still a rose. It depends upon how your board is formed. If you’re a private company and you have control of the company because of your shareholder capability or majority, you can get rid of a board member very easily. You just fire them, because you’re a majority shareholder. If however you’re a minority shareholder, whether you’re public or private, then you have to get the agreement of the majority shareholders to dispose of a board member. Now, in the case of a public company, there are elections that are done periodically, depending upon the bylaws of the company, and you get to put your slate of shareholders up for vote. And so if you have a shareholder that is not performing well, you can only do it at a specific time when that election takes place, but you can change your board of directors base. And so it’s not a forever thing, but during that period when they were elected, you did hire them, then they can be a pain in the neck. But it’s like hiring good employees. You want to make sure you hire good board members. If you inherited a particular board, then of course you have to do the weeding out process and get rid of the board members that don’t get along with each other, or don’t get along with management. So you can tell if you have a good board by how well they work together and how involved they are in the success of the company. It’s difficult, especially if you’re a public company and you only elect boards every year or two. Then you’re kind of stuck with those guys until the next election comes up. Rob Artigo: Tell us a little bit about what you expect board members to do. What should I expect as an entrepreneur from those board members, and what should I expect them to do? And what makes a good board member? Ray Zinn: That’s a good point, and a very good question. The board needs to be supportive, and that includes… The management needs to be supportive of the board. And so if you look at the responsibilities, if they’re well-defined… In other words, if you have a board and everybody has a well-defined responsibility, then you can measure them against what they were responsible to do. And in a public company, you divide up the responsibility, corporate governance, accounting, financials, organization, reorganization, hiring CEOs. So the board is usually divided up to responsibilities, usually have a committee that you form to take care of these different aspects. And then you look for the experience that the particular board member has in those particular areas, so that you get the best results. Most boards are not that involved. I mean, all they do is they come to the board meeting and agree or disagree on certain aspects of what the board has to do as part of their board responsibilities. Very seldom do they do anything outside of that, other than monthly or quarterly board meetings, or annual board meetings, depending upon what the bylaws of the company require. But boards are like employees. They are often paid, they do get stock, and so they are to be treated like people who have to perform their particular function. And if they’re not performing their function, you get the rest of the board to agree to dismiss them, because a board can, at appropriate election time, dismiss that particular board member, depending upon whether you’re private or public or whatever. Oftentimes, if the board is not liking the way management’s running the company, they’ll actually bring in another board member who maybe has some expertise in that area. They’ll be sitting right on the head of the management, micromanaging the company. So boards can be either very helpful or very deleterious. I very seldom see them… They’re either very helpful, or they’re deleterious. It’s like progressing or retrogressing. You’re either moving forward, or you’re moving backward. You’re not just standing still. So if the board is a do-nothing board, that’s deleterious. Even though maybe they’re not causing any waves, they’re still not… They’re getting paid and getting stock, and they’re not really doing anything, so that’s deleterious. And then there of course activist boards, maybe if you’re a public company, and the shareholders bring in an activist to be on your board. They can be a real pain in the neck. As I said, there are only two kinds of boards. Those are the ones that are very helpful, and those who are not helpful. What you want is you want a board that’s helpful. Rob Artigo: If you have the ability, I suppose, to maintain a majority shareholder status, then you’re in a position of strength in terms of your ability to work with the board and exercise some influence, but as that erodes, you end up losing some of that power and the ability to deal with the board. Is that accurate? Ray Zinn: That’s good news, bad news. That’s true. So if you got a management that has control of the board, but they’re not very good management, then of course the board will support the bad management and you don’t have any successful outcome. On the other hand, if the board is not working well with management, it could be that they change management or they can make some modifications to the structure of the company. So boards can be under the thumb as you would of management, which is not a good thing, because then if the management is not doing that good a job, then the board who represent the stakeholders or shareholders is not being… They’re not serving well to the shareholders of the company. It all depends upon on how well a company is doing. If the company is doing extremely well, the board has little impact or little effect. If the company’s not doing well, the board can have a big impact. Rob Artigo: If you have the deleterious board, is this where you get into situations of hostile takeovers, or is that just strictly a stock thing? I mean, I really don’t know, and that’s why I’m asking. Ray Zinn: Well, it depends. I mean, a hostile takeover can happen if you have a great board, even. So the hostile takeover occurs when they get the shareholders to all agree to sell the company or dispose of the company. The board doesn’t necessarily do that. The board can force a hostile by virtue of just going out and soliciting… Shouldn’t say soliciting, but trying to get companies to come in and buy the company. So hostile is really where the company is being attacked as you would… Or to be acquired, even if the board supports management. So hostile just means where you don’t have agreement with the board to sell the company. Rob Artigo: Yeah. It’s the outside source coming in and saying maybe there’s an offer on the table that is something friendly, but then they decide to decline the sale, and somebody goes, “Well, then we’re going to take the company anyway,” type of scenario. Yeah. All right, well, I learned a lot about boards and board members in this podcast. And as usual, Ray, wealth of information, and I appreciate it. Join the conversation at toughthingsfirst.com Questions, comments are always welcome. You can go there. You can ask Ray directly. He’ll answer your questions. You can also follow Ray at Twitter, Facebook, and LinkedIn. And don’t forget, wherever books are sold, you can get the Zen of Zinn, and of course Tough Things First, two books with much more knowledge that can help expand your horizons each day. So get those books if you can. Thanks again, Ray. Ray Zinn: Thanks, Rob, appreciate you being here.
15 minutes | Jun 2, 2021
Consultants can be helpful experts, but sometimes they show up to fill a need for which there’s purpose. In this Tough Things First Podcast, Ray Zinn discusses when consultants make sense and how to decide when the time is right. Rob Artigo: Rob Artigo here once again, your guest host for this edition of the Tough Things First podcast. I’m a writer and investigator in California. Big back is always a pleasure Ray, how you doing? Ray Zinn: We’re doing just fine. Thanks, Rob. Good to have you back on the program. Rob Artigo: I’m sure this is a subject you can identify with and probably you’ve heard plenty of stories and experienced it yourself is, the tech industry… And I think I relate this to Hollywood, as there’s always this bubble around… I don’t even know if it’s a bubble, but sort of this fog, this cloud around the tech industry, because there’s money there and in Hollywood, the same thing. There’s always people on the periphery trying to separate ambitious people from their money. And I mean that in ways like, they’ll say, “Hey, you come to me, I will build out your business plan. Or I will help you create this or I’ll design something for you. Or I’ll do an advertising campaign for you all. I’ll show you how to do this on the internet, or use Yelp to get some business.” And it turns out really all they’re doing is, doing something for you, you could have Googled or watched a YouTube video and figured it out for yourself and only takes five seconds. Right? And you end up paying them thousands of dollars and the return is nothing. So let’s get to the point here is that, there are people in Silicon Valley, there are people in industries where there’s money that are just waiting to take maybe a naive younger person or a new entrepreneur and extract some money from their wallets. That doesn’t mean that there aren’t legitimate consultants out there or people that can really help you. So that’s what I want to talk about here. Would you agree with my intro there? That I’m correct in saying that there are people out there waiting to take money away from people, for projects they don’t necessarily need to be paying for? Ray Zinn: Well, I’m sure there are some. I don’t know that they’re prolific. They’re- Rob Artigo: Vultures, not like vultures? Ray Zinn: Well, you know how they vote. So I think there are people who are opportunistic. My dad used to say that a consultant is somebody who doesn’t have a job. So I got to be careful about when we refer to about a consultant. A medical doctor is a consultant, if you want to look at it that way. A teacher, a professional, either a high school or college or whatever teacher, they’re consultants. And so, the term consultant… A good father or a good mother is a consultant. And my parents were good consultants for me. It depends upon where you need help. I believe in going to the doctor to get physical checkups and to have them consult with me on what I need to do, whether to lose weight or whether to change my eating habits or sleep habits, or whether exercise. A physical trainer, a person who works with you in an exercise program, they’re a consultant. There are consultants and then there are people who are just trying to separate you, as you said, from your money. I don’t think there are that many, at least in my experience that are not good. Another one is a CPA firm, they’re consultants. Tax preparers are consultants. There may be a few consultants that are not really worthwhile, for carrying their weight, worth their pay as you would. A consultant is anybody that you would go to, to get help that you can’t handle yourself. So, if you can handle yourself, there’s no need of a consultant. I know people that do their own barbering, and sometimes it looks like it. Or I know people who go to the restaurant because they don’t like to cook. It just depends upon what your needs are. Rob Artigo: Yeah. I think for the purposes of this podcast, I’m thinking… And I appreciate the fact that you wanted to separate the difference between, what I’m referring to as one of these people that are trying to separate ambitious persons from their money versus a consultant that is valuable. So there are plenty of valuable consultants out there. And I guess what I’m getting at is, what we want to be able to do as entrepreneurs in our businesses, I’ll give you one example. I came from a radio background, 20 years in radio, and a couple of times they would bring in… The company that I was working for, the radio station I was working for, decided to bring in a consultant. And the consultant spent a week looking at how operations worked in the newsroom and with the FM radio stations and the AM stations. And looked at how we approached imaging and different things, and then came up with ideas for how to brand the company better and how to make it more consistent and a more concise messaging. And I never found anything of any value, at least as an employee on, ranking file type in the newsroom where I felt like they were giving us anything that we didn’t already know needed to be done. But the company ended up paying for it anyway. And I suppose they got some value out of it, but when I’m a leader of a business and I sit down and go, “Hey, we need to bring somebody in.” How do I know that it’s something that I do need to get somebody from the outside to come in and take a look and help us out? And then how do I know if that person is going to be the right person, that’s going to give us quality for our investment? Ray Zinn: Well, it’s like, let’s say you have a heart problem and your physician is suggesting that you have a quadruple bypass or something. You might want to get a second opinion. And so a second opinion is necessary whenever there’s something really serious with the company that would require a second opinion. So I look at a consultant as somebody who’s going to offer a second opinion. You may have a health issue and you’ll get online and you’ll look up some resources to help you understand your medical problem. But then you’ll go to the doctor and say, “Here’s what I read online. What do you think?” So generally, a consultant is brought in many times because something really serious is wrong. And maybe it’s the board of directors is demanding that you get a second opinion. Maybe they’re not happy with the way the current management is solving the problem or dealing with the problem. They want a second opinion. So they’ll hire a consultant to come in and look at the situation. Maybe it’s also, maybe the leadership of the company brings out a second opinion just to bolster what they’re doing is correct. That they’re on the right path because, it’s called drinking your own Kool-Aid if you don’t get somebody from the outside to come in and do a deep dive into what you’re doing. Consultants again, all depends upon how serious the situation is and whether or not you need a second opinion. So I refer to a consultant as somebody who really is there to offer a second opinion, or to be able to do something that you cannot do, because you lack that skillset yourself. For example, like a tax preparer or a CPA or something like that. Rob Artigo: Right. And you have to have somebody doing your payroll. I don’t care how small your business is, you should have somebody doing your payroll because that can become a problem with the IRS really quick. And you just need those… You need experts helping you out if you really want to be a success and streamline things. Here we are as business leaders that we have to make a decision as to who to hire, so we look at who’s out there and maybe we ask for recommendations, it’s like hiring an employee, you have to do your due diligence. Did you have experiences with Micrel, where you had to bring somebody in to take a look at what was going on so that you could get that… Like you said, that other perspective, an outside dispassionate perspective? Ray Zinn: Well, only to the extent we talked about like a CPA or a… Oh gosh, let’s say, a board member might come in and help us take a look at a particular operation that they got that knowledge and skillset. But we didn’t use a lot of consultants in a situation where you’re just looking for somebody to come in and give a second opinion of what you’re already doing. I’d say that 99.9% of the time, the consultants that we use, we did not have the resources or the ability to really look at that particular problem. And so we hired somebody with that expertise. I can’t think of hardly a time that we brought in a paid consultant to look at something that we could do ourselves, but we wanted a third opinion or a second opinion. Rob Artigo: Okay. I can’t help but think of Marcus Lemonis said, the profit on CNBC that he goes around and invest in companies. And he literally is that outside guy who comes in… Well, he usually brings in money and investment and then becomes a stakeholder in the company. But he is the ultimate consultant when it comes to many of these businesses, because he’s got an expertise in the way big picture runs that these other people don’t. And when you are running a business, I think that perhaps if you find that you’re running a foul or your business is not doing well, you find that you aren’t really handling the business operations well, that if you find somebody who can help you with those situations, who could say, “This is what you’re doing wrong, and this is what you need to do.” That’s the kind of consultant that could help small businesses that are just getting started that have found that they are struggling for the first couple of years, bring somebody in and go, “All right, here’s what you need to do to fix your major problems.” That’s different than going to a company like Micrel, that is running well, that is profitable, 99% of the time, it’s just one year where it wasn’t. You didn’t need that because you were running the company right. Many of the entrepreneurs who are perhaps listening to the podcast are listening to it and going, “All right. Well, I’ve got a smallish business. I’m struggling a little bit, and I’m not sure what I’m doing wrong.” This is where you get into a situation where I opened talking about, somebody’s paying for something they don’t need versus something they do need. And you mentioned the do need part. What would you say to those entrepreneurs who find themselves struggling and want to potentially reach out to somebody who could come in and look at the way they were operating everything and say, “This is the way you need to do. This is what you need to fix. You need an accountant. If you don’t have an accountant, you need to have one?” Ray Zinn: I’ve just recently heard of a franchise that provides training for customers. You can join this group of outside members that will be part of a board of directors group, as you would… An informal board of directors where, you pay X number of dollars a month and you meet once a month and you have experts there or even each other, where you could help consult with each other and help solve problems. And so there’s a number of those kinds of franchises available. So I would recommend that if you’re a small company that you look at possibly joining one of these franchise groups that does have these informal meetings, where you bring your problems to them, and then they talk about it as a group and they offer suggestions. It’s pretty interesting. I thought it was a pretty neat way of helping small companies who don’t have the resources to hire good complex boards, that they can at least talk among themselves as a kind of a talk group and they take time to help solve each other’s problems. Rob Artigo: Around here, if you’re looking for office space, you can get a desk and an area to meet every once in a while. And those kinds of benefits for a small company where you’re not having to take on a lease, long-term obligations or having to hire a bunch of people. You can join one of these groups and you can get some good information. So technology can really help us out if we stay within our means while we build it into a profitable company, which is obviously the goal. Thank you, Ray. Really appreciate it. You can join the conversation at toughthingsfirst.com. Your questions and comments are always welcome there. Follow Ray Zinn on Twitter, Facebook and LinkedIn. And of course you can get the texts, Ray books, Tough Things First, and The Zen of Zinn. Thank you again, Ray. Ray Zinn: Thanks, Rob. Appreciate it.
17 minutes | Jun 10, 2020
Corporate Culture, Part 1 – in conversation with Professor Jennifer Chatman
Part one for three in a series where Silicon Valley’s longest serving CEO chats with Professor Jennifer Chatman, a Distinguished Professor of Management and the Associate Dean for Learning Strategies at the Haas School of Business at UC Berkeley. Professor Chatman is also the Director of the Berkeley Culture Initiative, a program with the goal of identifying the most promising opportunities and challenges facing leaders who harness organizational culture as a strategic resource. Guy Smith: Hello again, and welcome to another episode of the Tough Things First podcast and this is the first of a very, very special three-part series of Tough Things First where with the help of a particular expert and the experience of Silicon Valley’s longest serving CEO, we’re going to explore the topic of corporate culture; what it is, how you shape it, how it facilitates innovation performance, and quite a bit more. For this three-part series, we’re joined by professor Jennifer Chapman, distinguished professor of management and the associate dean for learning strategies at the Haas School of Business at UC Berkeley in California. Professor Chapman is also the director of the Berkeley Culture Initiative, sorry about that, a program that has the distinct goal of identifying the most promising opportunities and the biggest challenges facing leaders who harness organizational culture as a strategic resource. Now, Professor Chapman’s CV goes on for quite literally 27 pages. Just her list of publications alone, take up five pages, so rather than recite more of that, let’s instead get started with today’s podcast. First off, welcome, Professor Chapman. Thank you so much for being here today. Professor Chatman: Thanks, Guy. Nice to be here. Guy Smith: Of course, on the other side, we have Silicon Valley’s longest serving CEO, a man who is no stranger to shaping positive corporate cultures himself, Mr. Ray Zinn. Hello again, Ray. Ray Zinn: Hello, Guy and hello, Jenny. So happy to be with both of you. Guy Smith: I think this is going to be an exceptional three-part series of podcast. I’m going to step back and let the big brains have a discussion about today’s topic, but to go ahead and get started, we’re going to put the question on the table, the question we’re exploring today. Professor, let’s start off with you. How can leaders create a strategically aligned, execution-based culture in their teams or perhaps in their entire organizations? Professor Chatman: Well, that’s a great question, Guy. Let me start by putting together an argument for why it’s so important to pay attention to culture and then we can talk about to do it. The basic idea here is that no matter what you do or don’t do as a leader, a culture will form. That’s not the question. The question is whether the culture that forms is one that helps you execute on your strategic objectives or worst case scenario, a culture that actually precludes you from achieving your strategic objectives. It’s really not a question of how to create a culture. It’s really a question of how to shape the culture that has developed in your organization and how to ensure that that culture is actually aligned with your strategic priorities. That’s the first piece. Let’s talk a little bit about what that means. Throughout my career, I’ve conducted research and consulted with organizations, taught courses about how to cultivate an effective culture. We’ve identified three specific criteria for using culture as a leadership tool. The first criterion is that a culture must be strategically relevant. What we mean by that is that the behaviors and decisions and priorities of your members half match with your strategic priorities. For example, if you’re competing based on customer service like an organization such as Southwest Airlines, customer service, and low price, then employee behaviors have to prioritize everything having to do with customer service and everything having to do with keeping cost low so that you can deliver on that strategic promise. In other words, the culture alignment can be seen throughout the organization in terms of consistently prioritizing the things that matter for strategic success. This sounds easy and straightforward, but think of all the times you’ve encountered competing priorities. One question is, do you serve customers even if it gets really expensive to do so? Or do you lower cost even if, at some point, you’re going to lose money on some routes if you’re Southwest Airlines? These conflicting priorities are what makes it very, very hard for most organizations to consistently focus on the behaviors, allow them to fully deliver on their strategic promise. That’s the first criterion. The second one is to ask the question of whether your culture is strong. What we mean by strong culture is two distinct factors. One, people agree about what’s important. Could you ask five people in the organization and would they say the same thing about what’s important within the culture? The second to mention is intensity around those cultural priorities. I’m a professor. We delve in the world of two by two contingency tables. You can imagine in your head the two by two that you’d set up for culture agreement and culture intensity, right? It’s easy think about the high, high and low, low quadrants, right? You have a high intensity, high agreement is what we call a strong culture. Low on both of those would be a weak culture, but then we have interesting combinations. So some organizations have high agreement with low intensity, what we call a vacuous culture. Some organizations have high-intensity but low agreement on culture, and we call that bring factions. One thing that leaders can do is scan their organization to see these quadrants they fall into. What we know from our research is that the most prevalent of those four possibilities is vacuous beliefs. We have high levels of agreement, but no real intensity behind upholding those norms. It makes sense because often what we’re asking people to agree about is pretty good stuff, right? “Hey, we want to be the best in quality”, right? And employees are going to say, “sure, we love quality. We agree with that. That’s a great thing to emphasize.” But there’s no real intensity behind it. And that means that you’re not going to deliver on your strategic promise systematically. What we know about strong cultural organizations is that they upgrade in terms of delivering on their strategic promise. Ray Zinn: So let me jump in here, Jenny, because you hit a key note for me because having run my company, a semiconductor company in the Silicon Valley for 37 years, culture was extremely important. So the name of my company was MICREL, M-I-C-R-E-L, which stands for microservice at a reliable. If you look at, then that we’re talking about quality again, that became our brand. Whereas we didn’t necessarily promote low price, that wasn’t our brand. Our brand was high quality, high reliability. I had to set up a culture that would support that sort of a thinking. So going along with what you’re saying, if I just waved arms at it and just let it happen, it wouldn’t be structured. So we had to have a structured culture. I think going along just to give you an example of the culture we had at MICREL, the quality and reliability goes along with honesty and integrity. We really promoted heavily being honest and having high integrity. We set up a plan to do that. So that the company, the employees fully understood what those terms mean. Honesty means you’re truthful. Integrity means you do what’s right when no one’s watching, which goes into building in the quality, rather than testing in the quality, you have to build it in. And then of course dignity and respect for every individual, which means we didn’t allow any swearing or vulgarity at the company. The last was doing whatever it takes, no excuses, meaning you’re going to put forth your best effort, making it no harm, no foul to the company, even if you make a mistake. So that’s how we inbred the brand of making semiconductors that were, were high quality and high reliability. So I just wanted to kind of interject that, Jenny, as we talk about the importance of having a strategic culture that you can actually execute. Professor Chatman: Great illustrations, Ray, of these two criteria for having a strong culture. People can see that there’s a clear strategic alignment between what you’re emphasizing in your culture and how you’re differentiating the company strategically, this notion of reliability and quality. So that’s a great illustration of the connection between strategy and culture. Second thing you illustrate was the kind of level of consistency and intensity throughout the culture. It sounds like people didn’t just agree, but that there was enough consistency and comprehensiveness in the practices that there was an intensity behind what you were prioritizing in an organization. Most organizations who are deliberately focused on leveraging their culture like you were, and I would say that given when you started your company, you were way ahead of your time because culture is something that organizations have really just started to take seriously, I would say, within the last 10 or 15 years, and as your company predates that faddish orientation by some number of years, so that’s really incredible. But many organizations you can actually look within the organization, even within my business school. I’m a professor at the Haas School of Business at UC Berkeley, and we’ve embarked on a cultural emphasis. In fact, we’re known as the t
15 minutes | Jun 3, 2020
Make Points, Not Enemies
Unskilled communicators can create a breakdown in conversation at every turn, sometimes making enemies in the process. In this Tough Things First Podcast, Ray Zinn explains how to avoid pitfalls we often create for ourselves using the wealth of knowledge he learned over decades at the highest levels of the tech industry. Rob Artigo: Rob Artigo here once again, your guest host for this edition of The Tough Things First Podcast. I’m a writer and an investigator in California. Being invited back, always a pleasure, Ray, how you doing? Ray Zinn: I’m doing great, Rob. So good to be back with you again. Rob Artigo: Well, it’s happened to most of us at one time or another. It can be at a board meeting. It could be in a design strategy session. It can be just a discussion in passing about where to put cubicles in an office building. That conversation turns into controversy simply because a point we’re trying to get across feels like, to the other person, at least, that it’s a personal attack and maybe you could even make an enemy out of that person. We know that communication is a two-way street, but how do we make a point with someone large or small in the course of the conversation without putting somebody on such a defense that we end up making an enemy out of that person and they shut us off and they don’t want to listen to what we have to say? Ray Zinn: That’s a challenge of making your point without making an enemy. It depends upon how we sharpen our point. If you sit there, making this as an example, you’re whittling on a stick and you keep sharpening that point and you keep pointing at somebody, they’re going to think they’re your enemy or they’re become your enemy. So, don’t keep sharpening your point. That’s one of the things that you need to do when you’re making your point so that you don’t create an enemy is don’t sharpen it. Don’t make it personal. Don’t make it emphatic. Don’t make it so that it comes across as being you’re harming them because then they will become your enemy. So the challenge is to how to make your point without sharpening it. Rob Artigo: Yeah. I mean, can we employ techniques that will maybe draw out the point so that the other person feels like they’re contributing to your point so that it doesn’t sound like you’re telling them something but that they’re… In other words, I mean, can we ask questions instead of making a point or making a direct point? You know what I mean, make an end-around to our point in order to not directly come at somebody with that, like you said, pointed stick? Ray Zinn: That’s the key. In other words, keep them involved. Keep asking them, “How do you feel about this?” Or, “What’s your feeling on that subject? Do you understand what I’m saying? How can we work together on this?” And making it sound like it’s a two-way or that we’re a team as opposed to being, “You’re the enemy. You’re the one that’s going to get defeated in this.” So we don’t want to bark our point. We want to, in more of a loving, in a more kind way, we want to develop that point so that they don’t feel the sharpness of it. Rob Artigo: Have you seen in business situations, and maybe in your many years at Micrel but just simply being in the business sector for as long as you have, seen situations where business relationships have been ruined by one or the other party coming at a situation maybe with more than one pointed stick, just on a few basic business points that shouldn’t have been so difficult to get through? Ray Zinn: Yeah. For example, in the beginning starting my Micrel, we were talking about, “How should we dress?” In other words, “What should be the standard of dress?” With me, I wanted to be more formal. In other words, I wanted everybody to come in a suit, and tie, and a nice shirt, and nice, pressed slacks, and so forth, and polished shoes as you would because that was the image I wanted to project for the company. But not all the employees saw it that way. They didn’t see the way I did about neatly-combed hair, and neatly-shaved face, and then neatly dressed and groomed was the way that they wanted to be part of a company that projected that image. So I had to soften that a little bit. I had to blunt the stick, but I kept coming dressed that way. I kept being neatly groomed, and clothed, and fresh shirt every day, and shoes were polished. I did it by example. I actually got them to see what that looked like or what the company wanted to look like, and they wanted then to become more like me. I guess it came in a more slow way. I mean, I was quite young. I was less than 40 and in my 30s when I started the company, and so I was a little bit more aggressive and so. But I wanted them to feel part of the decision. So I just set the example, and it worked because ultimately, the employees did finally adopt the image that I wanted to project for the company. Those didn’t see it that way, probably ultimately left. But I didn’t sharpen the point, I just kept making the point. Does that make it clearer? Rob Artigo: Sure. When we’re communicating, sometimes and in particularly, if you’re inexperienced communicator, this idea of backing up a little bit and letting time and circumstances illustrate for your audience, so to speak, whether it’s one person or a bunch of people, to illustrate your point rather than continuing to hammer away at something, it seems to me that looking at the situation and saying, “Does this conversation need to happen like this right now?” Ray Zinn: Well, I have an example, it’s in my book. One of my execs had a terrible swearing problem. It just flowed off his tongue. It was a habit he had, and it was just terrible. But I loved the man. I loved him like a brother. So I kept saying to him, “Bob, we don’t use vulgar language here at the company. It’s not proper.” He just couldn’t break the habit, so I said, “Hey, wouldn’t you like not to use such condescending vulgar language?” He said, “Yeah, but it’s really hard and blah, blah, blah.” And I said, “Okay, tell you what? Let’s come up with a deal here. How about every time you swear that you put a dollar in employee jar here to do an employee activity?” Pretty soon, I had over $300 in that employee kitty jar because he kept putting… Pretty soon, he got to the point where it wasn’t so much the money, it was so difficult for him to walk in and have to put money in the jar that he finally just slowly improved and he stopped swearing. His wife actually told me here not too long ago that one of the best things that’s really happened in their marriage and their family is that their father and husband quit swearing. This really works. So rather than sharpening the point and trying to jab him with it and using difficult language with him, I just said, “Okay, how about come up with a plan? Every time you swear, you’re going to get to pay for your indulgence here. If you want to swear, fine. Just put some money in the jar.” So he did that for a while and then finally, he just couldn’t stand to do that anymore so he stopped swearing. Rob Artigo: That’s funny. What do you do in a situation where you’ve recognized that a point that you made, regardless of the situation, had turned this other person into enemy of sort? I mean, we’re not talking about somebody who’s suddenly dawning a pith [inaudible 00:09:00] helmet and coming at you with a bayonet out or something, but somebody who then feels like they’re an adversary, or they’ve been put down, or they’re now on the defensive. If you figure it out, if you were sensitive enough to realize what has occurred in the conversation or at the end of the conversation, how do you then try to reverse it and get that person back on your team? Ray Zinn: Well, the first thing you have to do is recognize that you’ve done that. You might say, “Wow, I didn’t realize I had done that or said that, gee whiz.” A situation that actually happened to me at Micrel, where I’m in a conversation with a young marketing engineer, a female, actually, she thought that I was using language condescending, meaning that some or other, I was talking down to her because she was a female and so forth. I didn’t realize I was doing that. For some reason or other, just in the comments I made and so forth, made her feel uncomfortable and not even realizing it until she let me know that I was offending her. So I had to catch myself from knowing that certain things that I say and how I say them was affecting her. I’m not going to say she was defensive, but maybe she was little more so than other people because certain words and certain circumstances just made her feel uncomfortable. I had to watch what I said and how I said it. I was just more careful in the way I approached her. Things worked out wonderfully. But in the beginning, you got to watch what you say and how you saw it because not everybody’s going to take what you say in the same vein. What’s maybe amenable to one person could be not to another, depending upon where they’re coming from and how they have viewed themselves. This particular female had a difficult time at home with her parents because she wanted to be an engineer. She didn’t want to be a nurse, as you would. So her becoming an engineer was a real goal and achieved by her. I didn’t know her background, didn’t know that that was a sensitive area. So I had to [inaudible 00:11:34] treat her more, as I said, more professionally, as y
14 minutes | May 20, 2020
Setting Business Goals
If Tough Things First stands for one thing, it’s setting and achieving goals even when they are difficult. In this edition of the Tough Things First Podcast, Ray Zinn talks about setting priorities to meet those goals. Rob Artigo: I’m Rob Artigo, your guest host for this edition of the Tough Things First Podcast. Hi, Ray. It’s good to be back with you. Ray Zinn: Rob, it’s so good to hear your voice again. Thank you. Rob Artigo: And it seems like it’s been a long time, but time marches on and here we are doing another podcast and I’m grateful for that. Now, whether they plan to, or not, like me, most people set some kind of goals every single day. Now that could be something easy, like going to the store, just doing the dishes, maybe doing the dishes isn’t always that easy for everyone, but they’re goals nonetheless. And we got to think of things in terms of this podcast for entrepreneurs and business operators, entrepreneurs do the same kind of goal setting, those small tasks that they have to do every day, because they’re just things that everybody has to do. But they also have to keep the future in mind, their business, where they are, where they’re going, and what’s next. So, let’s talk about setting goals first, and then we’ll talk a little bit about some of the strategies for making sure that those goals come to fruition. So for you, it’s always been important to set goals when operating your business. Ray Zinn: Well, even running your life. I mean, it doesn’t have to be running a business. I mean, setting goals is really avoiding procrastination and that’s the title of my first book, Tough Things First. We tend to not want to set goals, for one thing, because it’s a lot of work and because we’re not really willing to do the tough things first. And so, when I wrote the book and we hadn’t yet come up with a title for it, I had my staff together and we were talking about what should we title this book? Vona my VP, she just said, Tough Things First. Do the tough things first. And so, the only reason we have a goal is to get us to look up, to aim higher, to reach out and to lengthen our stride to be more purposeful in what we’re doing. We don’t have to set goals for things that are almost secondary, like eat once or twice a day or three times a day, or whatever, or go and get the mail. I mean, setting goals is really trying to reach up. In other words, trying to get us to go above and beyond where we are, not just to repeat something we did the prior day to better ourselves. And so, that’s a whole concept of setting goals. Now, how do you set goals? You look at really, I would say, once you listen to this podcast, write down three things that you really don’t like doing, and that should be a goal or those three goals are the ones you should set for yourself that you want to accomplish over the next period of time. Habitus is easy to start and hard to break, but a good habit is hard to start and easy to break. So you want to set good goals, good habits. And so, write down three things that you don’t want to do. And I’m sure we all have those. I can think about 10 more right now as I’m talking on this podcast of things I don’t like to do. And those are the things that I’ve got to focus my mind on. Because once I learned to do the tough things first, once I learned to set goals for which I don’t want to achieve or I’m reluctant to do, then setting goals becomes easier. Rob Artigo: One of the goal setting principles that I have is that if I’m facing something that is an extraordinarily daunting task, and I’ll give you one sort of, this is a smaller task in the scheme of things because it’s just a project around my house, but I have an area that for a long time on my property had been overgrown since I had moved in. And I’d slowly been trimming back things and breaking it down. And I’ve got all these root balls from these hedges, they’re ancient. I mean, they’d been growing there for a long time. There’s big roots and root balls and there’s this… What I decided to do in terms of my goals was to take it and establish what it is that I want to achieve, but take manageable pieces away from it and set a goal to achieve that one little piece. Because it’s like, I can’t do this whole yard myself, but I can do this one little piece and it won’t be that difficult. So part of my goal setting tends to be prioritizing the piece of the bigger project that I have to get done, because that one piece that I have to get done is manageable and I can get it done right now. And then over time, what I’ll find is that the whole project will eventually get finished. Ray Zinn: Well, you’re jumping into how to achieve a goal. Okay? So we went from setting goals to achieving goals. Rob Artigo: Yeah. Well, and that would have been my follow up question is all right, let’s talk about making sure that we see those goals through fruition. Ray Zinn: Well, it’s like the old saying goes, how do you eat an elephant one bite at a time? And so, as you said, you go, “How are you going to clean up your yard one root ball at a time?” And so rather than just dive in and try to get it all done to the point of exhaustion, do it in bits and pieces. Don’t discourage yourself, because as humans, we can get easily discouraged. So rather than try to hack the whole problem out in one day, try to do it a piece at a time until the goal is achieved. I can remember years ago when I had my first home, we were repainting the home. We’re using a sprayer, but at nighttime, I didn’t want to disturb the neighbors with the compressor going. And so I got the roller out and I had my car parked up on the curb with the headlight shining on it. And I continued painting. I finished it at two o’clock in the morning. But I felt so good. I mean, I know in that case, I just continued because I felt that… Well, my thinking was that it’s going to look kind of dumb to have part of my house painted when I woke up in the morning. So I painted my entire house in one day, finishing at two o’clock in the morning. So in that case, I really ate the whole elephant in one day, one bite at a time. But if I was bonded, determined I was going to finish that house, but that’s kind of who I am. I just go at a task until it’s done. But still, one bite at a time, I don’t try to use a 10-foot roller to paint the house. I’m still using a nine, 10-inch roller, but I’m going at it until I’m done, because I know if I stop, I won’t start again. How do you start a marathon? By knowing you’re going to finish it. That’s how you do it. You don’t start a marathon by just taking the first step. You have to say, “I’m going to finish it.” And so, you’re going to make that as your goal, that I’m going to run this distance and finish that task. But it will be one step at a time as you get to the end of that race. Rob Artigo: Well, and you’re talking about the project of painting the house was a time when you were in the zone, right? It’s just like the running of the marathon. There’s that time where you get into this zone, where you’re just one with the run, so to speak, and you’re running along your route and you’re achieving your goal. You’re in the zone. But there are times when we have goals that we’ve set, and this happens a lot, is you hit that trudge mode where it becomes a longer slog of trying to get the project done. And how do we make sure that we’re achieving our goals when the times aren’t so easy and we’re not on autopilot and we have to make something happen? Ray Zinn: Well, that’s the hard part, is how do you keep up the pace? So rather than outpace yourself, you keep pacing yourself until you finish it. As you pointed out earlier, how do you clean up your yard? One root ball at a time. But if you just say, “Okay, I’ll get back to that later,” then you’re back to procrastinating. And that’s one thing that will kill a goal faster than anything else is that procrastinating. You got to be willing to stick to the task until it sticks to you. That’s what Emerson says, “That which we persist in doing becomes easier.” Not that the nature of the task becomes easier, but our ability to perform it becomes easier. So you got to stick to the task until it sticks to you. We, humans, tend to run really fast and then… As the story between the tortoise and the hare, if you remember that story, where the race was between the tortoise that plods along versus that hare that just can run like a screaming demon. And of course we knew who won the race was the tourist, because he kept it up, he didn’t slow down. The hare ran out of gas and he’d go over and sleep for a while and then rest. And then the tortoise just kept plugging along. So don’t run faster than you can run. Pace yourself, keep your goal in mind. If you decide you’re going to run a marathon, make sure you have that in mind as you start the race, don’t just say, “Well, I’m going to run so many miles,” okay? Because that’s not a marathon. A marathon is a specific distance. And so you got to say, “Okay, that’s going to be the goal, not just run for a while until I get tired and do like the hare does and pull over and take a nap.” Rob Artigo: Do these goal setting and goal achieving ideas work with just about any kind of goal that you can set for yourself? And I think at the beginning, we were talking about something small, like making sure that y
15 minutes | May 6, 2020
In business and in life there are conflicts. Some of those are internal but threaten the external when we lose control. In this Tough Things First podcast, Ray Zinn explores how entrepreneurs can find a path to being open minded with conflicting with our core principals. Rob Artigo: Welcome back to another edition of The Tough Things First podcast. I’m your guest host, Rob Artigo. I’m a writer and entrepreneur in California. Hi, Ray. Ray Zinn: Hi, Rob. So good to be with you again. It’s been a while. Rob Artigo: Good to be back, of course. Core principles define us and we don’t typically, like we’re doing a podcast here, we don’t just broadcast our core principles to everyone, but if they’re really true principles, at least in my eyes, they’ll manifest themselves in many ways that other people, that everyone will see. I mean, even if we’re not telling them what our core principles are, people will notice what they are even if they can’t define them right away. Ray Zinn: Exactly. Rob Artigo: But we’re also asked to be open-minded. Ray, in your experience, are there times when being open-minded is actually challenged by conflicts with our core principles? Ray Zinn: Well, certainly. If you have a principle that you hold dear to your heart, then someone wants to bring a counter to that or maybe argue with you about that, debate you on that subject, you can get your, as they say your dander up, your hackles up, and then of course as soon as you do that, you shut your ears off. You no longer are going to be listening because you’re in a defend mode. The key is how do you maintain these very solid core principles, and even when they know that you have these core principles, and yet they’re going to want to argue and put you in a defensive mode. There’s a saying that goes, the best defense is a good offense. What you want to do of course is to make sure you don’t get into a defensive mode, because as sure as you do, you’re going to shut your mind off. Rob Artigo: Well, if we have these kinds of things come up, it’s one of those things where we want to be tolerant with the people we’re dealing with. I mean, if we come from different cultural backgrounds for example. I mean, in some cases some of these differences can be pretty vast. There’s a lot of territory to cover, but you want to be open-minded and understanding with people. But if somebody else’s core principles or their attitudes about the world come direct conflict with you, it just seems to me the question is, how can we truly be open-minded in various scenarios, whether it be business or personal scenarios when the issue at hand actually goes against a core principle and we don’t want to get bothered? Like you said, you could get your dander up. We don’t want to get our dander up, but at the same time, we don’t want to compromise who we are, right? Ray Zinn: Yeah, but the big debate right now is what is free speech? And I’m sure you’ve been following the news and you can see that there’s a belief that people are trying to shut off free speech. There’s no longer what we refer to as the ability to speak your mind, because they want to shut you down, and a lot of universities, especially ones that tend to be more liberal, are actually trying to prohibit conservative speakers from coming on campus to express their views, because the campus or the, as you would, the group being the majority apparently have decided that we’re going to be closed-minded. In other words, we don’t want to hear it. We don’t want you to threaten our views, and so therefore we’re just going to stop you from coming on and speaking your mind or giving your views. So I think it’s a very good podcast, because the thing I think that’s really threatened now is our inability to get along with each other, to be able to have open debate and without having to get to threaten either physical or emotional violence. And so I think, Rob, this is really a good podcast for us to talk about it. Rob Artigo: And it’s timely in an election year of course, and we’ve seen it in a variety of ways. It manifests itself, where there are, you mentioned campus, a college campus and where speakers have been shouted down or told they don’t have a voice. It seems the problem is that in those cons… I’m one of those people. I’ll just admit that I’m one of the people who when I’m being attacked and somebody wants to silence my speech, I tend to go, like I don’t want to have the conflict and I’ll just go away. But that doesn’t really solve the problem. You don’t want to have the conflict, but at the same time you don’t want to compromise your core principles and just cower in the corner and say, “Okay, you’re going to take away my voice? I’ll let you take away my voice.” Ray Zinn: Well, I know, Rob, and that’s the challenge. I mean, there’s a whole host of Antifa, people like that, that are going to try to intimidate you and bully you. We don’t want to be bullied either, and so the challenge is how do we not be threatening to them? In other words, how do we not fight fire with fire? Obviously if it gets dangerous or if it gets threatening, you best remove yourself from the situation. It’s not that you’re cowering, is that you don’t want to escalate it. But not all debates have to be where there’s what we call closed-mindedness. It doesn’t have to be in a campus environment or political stage. It can be with our neighbors. It can be with our own family members. It could be between a husband and a wife or children. The key here, what we want to talk about, is how do we not become closed-minded ourself? In other words, this is not so much how do we react in a threatening condition like on a campus or in a other more public debate, as you would, but even one-on-one employee to employee, boss to subordinate or subordinate to boss, or husband or wife or parents to children. This is a subject that I think we should talk about in general as opposed to just talking about Antifa kind of violence or the threatening of free speech. In my mind, the way you become open-minded is to show love. In other words, love is compassion for another individual, and so if they feel your love, in other words if you don’t act or sound threatening, even though you have a very core principle. It might be one where one of your children has decided to experiment with some drugs, and of course now this goes against your core value as a parent or maybe as a supervisor. If you get angry and if you get threatening, they’re going to close their mind. They’re not going to listen. I’ve had four children, and typical kids, they grow up with their different personalities and issues, and I have found over the years that my family responds better, or my employees in this case as the CEO of Micrel, they respond better when they know that you love them and you have their best interests at heart. So the whole concept of this podcast is to get people to understand that you’re going to attract more bees with honey than you will with vinegar. And so the best way to be open-minded, meaning that you’re willing to listen and being more harmonious, as you would, it’s just to show your love for them as a person. Respect them as an individual. That’s being open-minded. It doesn’t mean that you have to change views, but yet you don’t come across as being dogmatic or as being a demagogue. That you’re showing compassion, you’re showing empathy, you let them know that you understand their situation and their particular emotions that they’re facing. Rob Artigo: You mentioned counter, let’s put it this way, countering that negativity or that close-mindedness coming at you by being an example of something else. And it takes us back to the beginning of the conversation when I was talking about how our core principles may not be something that we are articulating to people, but an example of how we are living, and therefore it says more than perhaps what our words could say, correct? Ray Zinn: Exactly. Well, your example sets who you are. Whether you’re going to be a good example or a bad example, your example sets the stage. If part of your example you’re setting is one of a caring, loving, compassionate person, you’re less likely to get into these harsh debates, because people will say, “Well, he’s humble, he’s a good man or a good woman,” and they’re less likely to want to denigrate your personal beliefs or your particular core principles. It’s really the way you come across. It’s that Cocker Spaniel look versus that Doberman Pinscher. If you come across as a Cocker Spaniel then you come across more loving and so forth. As a Doberman people are more fearful. You have a choice. You can come across more as a Cocker Spaniel or you can come across as a Doberman Pinscher or a German Shepherd. It’s just in the way you project yourself, as you mentioned. Rob Artigo: As we close this podcast out, just a thought in terms of what can we learn about discourse just by being observers of these more vitriolic reactions that happen from one side versus the other, and shouting the other side down or attacking and that sort of thing? What is it that we can learn in our lives, in our family lives, in our business lives that we can take away from what we’re seeing rather than participating in it? Ray Zinn: If it’s a strong core principle that you have, or if you’re trying to set the stage for something, you’re less likely to be less vitriolic. In other words, the more you hold to those p
13 minutes | Apr 22, 2020
Bad Decisions, Good Outcomes
Entrepreneurs are bound to make bad decisions, but it’s how they handle them that is the difference between success and failure. Ray Zinn has seen it all and in this Tough Things First podcast he explains how successful business operators process bad decisions differently. Rob Artigo: I’m Rob Artigo, your guest host for this edition of the Tough Things First podcast. Hi Ray, it’s going to be back with you. Ray Zinn: Well, thanks Rob. I appreciate you joining us again today. Rob Artigo: I’ve got another question about decisions. We talk about decisions on the show frequently and I want to talk about bad decisions. Entrepreneurs make decisions all the time. They make decisions daily and they’re big, sometimes very easy decisions. And sometimes they’re small, very hard decisions. And some are just based on analysis and projections or educated guesses. So no matter how much though that goes into it, some decisions are not going to turn out the way you expect. How does a successful entrepreneur deal with bad decisions? Ray Zinn: Okay, well let’s first of all talk about a bad decision. They’re always going to be with us. We’re not perfect as human beings. We don’t have privy information. Decisions we make, if the statistics bear out correctly, they’re only good 50% of the time. It’s like flipping a coin. So what is different about a bad decision is that it’s a decision that’s not corrected. So, that’s the bad decision. And so, I want to make sure the listeners understand what a bad decision is. It’s an uncorrected decision is a bad decision. I make mistakes every day, and so you could say, well that was a bad decision, but then I correct it. And so, a bad decision is not bad if you correct it. As they say, no harm, no foul. So if you make a wrong decision and you immediately correct it or to the extent you can immediately correct it, then it’s not really a bad decision. Does that make sense? Rob Artigo: Yeah, it does. And as an entrepreneur, you have a high profile position, you’re a CEO of a company, and you make a bad decision, sometimes you’re in the spotlight on it. You can get ridiculed for it. Acquisitions comes to mind because sometimes people end up acquiring a company that just ends up being an absolute dud. They did not realize that just soon down the road that particular whole arm of the company would be obsolete. And so you see this and you think, wow, that was a really bad decision. But like you said, it’s how you make the lemonade out of the lemons. Right? Ray Zinn: Exactly. There is no such thing as a good acquisition, they’re just acquisitions that are controlled. So acquisitions by definition are difficult, and if you are not prepared for it or if you don’t already have it factored in, then it becomes a bad acquisition. So, just assume that no matter what, whether you’re hiring a person or whether you’re pivoting on a particular product or product line, these are all fraught with problems. And so just realize that being an entrepreneur or being in business for yourself is fraught with problems. The difference between a successful entrepreneur and an unsuccessful entrepreneur is their inability to turn, as you said, lemons into lemonade. It just like you’re going down a freeway and you take your hands off the wheel, you know what’s going to happen. You’re going to end up in a bad accident. Ray Zinn: So you got to keep your hands on the wheel, you’ve got to keep attentive, you got to keep looking around, you got to understand what’s going on. You know, it could be snowing, it could be raining, you could get a lot of traffic, you could have other forms of chaos. And so, the good driver will be able to manage his way through whatever disaster is thrown in front of him. And so, that’s what an entrepreneur is, is that disasters are around the corner and he’s dealing with them. So running a business is like that. It’s controlled chaos is what it is. Rob Artigo: Are there times when, in hindsight, you look at the situation, you’re saying, “Oh man, that was a bad decision.” But you look back in hindsight you go, “Well, I think that the decision was still the best decision that we could possibly have taken, that the outcome wasn’t what we wanted, but the decision was the right one because anything else would have been potentially disastrous.” You know what I’m saying? Ray Zinn: Yeah. And marriage is that way. So you could say, “Wow, that was a bad marriage or that was a bad decision marrying that person.” But that’s not a bad decision if you start out looking at the little minor changes that are taking place in your marriage and correct them as you go. Then they don’t become big disasters. I think that probably half or more of the divorces could have been prevented had one of the other members of the marriage partners took action quickly and early, so before it became a disaster. You don’t paint yourself into a corner. You realize you’re about to paint yourself into a corner and you move so that you’re not ended up being in the corner. And that’s the way you run a business. Same way. What are they, nine out of 10 businesses fail after three years, or startups fail after three years. I mean after three years. And the reason is because they paint themselves into a corner. They don’t realize that they’ve caused their disaster or their own problem, whether it be a marriage or whether it be starting a business, because they don’t correct things quick enough. They let them become big problems and maybe at that point you can’t correct them. So whether it be as a parent with a problem child or whether it be a marriage or whether it be a business or whether you’re a school teacher or whether you’re a salesman, whatever situation you’re in, don’t let problems become big problems. Solve them early when they’re small. Rob Artigo: And I suppose also you want to make sure that it’s a learning experience so that you don’t make the same mistake again. But at the same time, what about the approach of letting it vanish in the past and say, “Look, I’m not going to dwell on it.” The way a golfer maybe makes a bad shot and he’s taken his next swing down the, hopefully it’s not too far off the fairway, but let’s say he’s in the rough and he knows he made a mistake in the last swing. I’ve heard that professional golfers will put out of their mind the mistake from before and say, “All right, this is a new moment. This is a new decision.” They set themselves free from the, I guess, frustration of making a bad decision. Ray Zinn: Well, that’s what causes people to stop even in moving into a dark room is because they dwell on it. In other words, they can’t move forward. And so if you’re dwelling on the mistake you made, then you can’t move forward. It’s hard to be thinking about more than one thing at a time. And so if you’re thinking about the mistake you made or about the problem you caused, then you’re not going to find a solution. You’re just going keep dwelling on the mistake. And that’s what we talked about earlier is that you don’t wait until it’s a big mistake. You correct it when it’s a small mistake. It’s almost like correcting your swing in golf as you’re swinging as opposed to hitting the ball poorly and then having to correct for it. So, the good golfer can actually correct his swing as he’s swinging. Or we’re playing tennis or whatever else you do, you correct it as it’s happening rather than let it cause the problem and then have to correct it. Rob Artigo: Is this something that a young entrepreneur or a new entrepreneur can learn? Is this something that they have to learn to expect? Ray Zinn: Well again, that’s professionalism. You can’t learn to correct your swing before you learned. It takes practice makes perfect. It takes time to develop those skills to do anything. Whether it be football, any other sport, whether it be a parent or whether it be a spouse, you learn. And if you stop learning, then of course you stop growing, you stop progressing. Rob Artigo: And if you’re very young, you’re a college person and you’re maybe participating in the Zen Starter program, have you run into people in the program that have seemed a little downtrodden or they feel like they made some kind of huge mistake and they’re very disappointed in themselves or in something that they did that they seem like they just need to get over it and move on? Ray Zinn: I’ve seen all kinds. I’ve seen them where they think they know what they’re doing, then they don’t. And you can see that, that they don’t know. But they pretend like they know what they’re doing. And that’s the dangerous one. The most dangerous ones are the ones that pretend they know because they stop listening. They keep moving forward, going through the mistake because they don’t want to show they don’t know. And so they pretend like they know. And so you can tell that aren’t right off the bat is that that person obviously doesn’t know what they’re doing. And that’s again, the most dangerous one is those who do pretend like they know what to do when they don’t. Rob Artigo: Yeah. I think that one of the experiences I’ve had in business and in the military for example, is people who feign some competency or that they’ve got a good handle on something, and you can almost see in the way that they’re dealing with it, they just are afraid to or donR
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