The CEO Magazine

Silicon Valley’s aura is unique. Try though they might, other localities have yet to replicate it and likely never will.

In The Valley where I helped drive the semiconductor industry, we thrive on doing, and every vector of activity is based on doing things big. Nobody in the Silicon Valley technology world dreams of starting anything less than a global business. A good starting point for us is a million customers or users. Changing the world is considered the norm. In a word, Silicon Valley’s culture is geared to the exceptional.

Biases abound

Everyone is led by their biases, and in Silicon Valley, biases abound. What underlies the Silicon Valley mystique is a collection of well-integrated biases toward action.

Bias for disruption: Small, incremental changes are fine, but Silicon Valley prefers wholesale change. This is reflected in our entrepreneurs, our daily language, and our venture capital choices. The phrase status quo is only used negatively in Silicon Valley.

Bias for flying fast: Though I prefer investing in entrepreneurs seeking to create enduring companies, Silicon Valley prefers starting fast, ramping up faster, and selling out once the product concept is proven. This attracts venture capitalist who also have short horizons.

Bias for brains, not egos: In Silicon Valley, the best idea wins. This generates an egalitarian environment largely free of egos. Pride is replaced with patriation, collaboration, and a constant focus on the end-game.

Bias for global: From our semiconductor origins, Silicon Valley recognized that we were changing the world. The Internet has brought the cost of changing the world down to start-up affordability. Few venture capital pitches in Silicon Valley include business plans with mere regional or national aspirations.

Bias for bucks: Capitalism is a good word in Silicon Valley. With this is a bias for acquiring capital to disrupt technology and life as we know it. Taking investment money, making money, and then giving away our billions are considered saintly, not evil.

Cultures migrate, but are rarely exported

Herein is why no other city has replicated the Silicon Valley mystique.

What drives us is mainly cultural. Our local culture has self-assembled over the last 60 years. Our collective biases for risk taking, coopetition and disruption are interwoven into our people. What we think, whom we dine with, what risks we consider worth taking, even our local language evolved to support our biases for disruptively changing the world. It is an integrated culture, and like most cultures, it does not travel well.

Think about regional cultures in the United States. The warm hospitality of the Old South cannot be found above the Mason-Dixon line. Nor can the overly tolerant ethos of San Francisco be found in The Middle. Cultures can migrate, but it is a slow and sloppy march in the best of circumstances.

Silicon Valley’s integrated culture is less likely to find roots elsewhere. One aspect or another may be adopted in Austin, Portland or the Research Triangle, but the entire set of biases and the support systems that feed them cannot simply find new homes as a unit. Yet without each of these elements, what Silicon Valley does on a daily basis cannot be replicated. As long as our unique set of biases and abilities stays here, then Silicon Valley’s mystique will remain unique.

One of the biggest mistakes that I made while running my company, Micrel, for 37 years was to hang on to problem employees – those who were extremely functional in producing a lot of high-quality work, but dysfunctional in the way in which they interfaced with others.

Why is the Dysfunctional Employee So Hard to Spot?

I would observe these employees to be very productive and professional in my presence. Important performance attributes such as productivity, sales and even attendance did not take into account other key factors like attitude, collaboration, team mentality and communication. Too often, these “softer” skills were difficult to measure, but were of great importance in addition to the “hard” performance metrics.

Differentiating Beteen Transient Symptoms and Authentic Diseases

This distinction can be particularly difficult for the high-growth entrepreneurial CEO or leadership team. If the leaders pay attention to every signal within every part of the organization, treating each as equally important, each bad signal looks like an illness worthy of the emergency room. In my role, one approach that I found successful was to literally get out of my office, away from my closest group of advisors, and to visit each department and working group to understand the problems they faced. I ensured that everyone spoke up, not just the vocal majority. In these personal interactions, I was able to determine through body language if stressors were real or potentially elevated, if situations were temporary or more prolonged. This direct contact and personal communication created a culture of honesty. The public nature of the communication also exhibited the ways that employees chose to raise issues. Were they solution-oriented, or was there a tendency to blame? Was it clear that an employee considered him or herself as part of a collective team, or was there an “I’m in it for me” orientation? By taking myself out of my executive position, I was able to experience these attitudes firsthand and more clearly balance results and attitude.

Taking Action

We’re all too aware of the acquisition cost for new talent, and in my experience, consciousness of these costs can keep organizations from taking action. It was difficult for me to listen to complaints about people whom I considered to be highly productive employees, while others considered them to be problematic as team players. I would tell my employees who were having difficulty with the dysfunctional person to avoid “throwing out the baby with the bath water.” Concerned with the economics of replacing a new employee, I would nurture, coddle, and do everything possible to work with the dysfunctional person.

That said, it’s important to proactively determine when the effort did not deliver on a return and be willing to make a break. The old adage came to mind, “One rotten apple spoils the whole barrel.” As productive as these employees might have been, they were a detriment to the organization. It is often better for one highly-productive but dysfunctional employee to be dismissed than to lose the rest of your organization or to have it become less productive on the whole.

Suggestions for the (Hopefully Functional) Tough Love Discussions

Be utterly honest and transparent. Provide specific examples about how the employee’s attitude impacts the wider team. Be prepared to repeat the importance of the softer skills, particularly as the employee may become defensive and point to his or her results.

If you experience the following responses, be prepared to immediately move on. Definite warning sings of an ongoing attitude issue: Defensiveness. Blame. Finger-pointing. Thank the employee for his or her service, offer to assist (if willing) in job transition and make it clear it’s not a fit.

Determine if the behavior is a one-time instance and representative of “place and time.” Is the company experiencing intense growth? Has the person been recently promoted? Is the company going through a period of rapid change? These factors can stretch even the most accomplished of employees, so keeping in close touch during these times can help you feel confident about the authenticity of the employee’s leadership.

If there’s one lesson I have learned that I need to remember and pass on, it’s that it is better to sacrifice this highly productive yet dysfunctional employee in order to have a more productive overall functioning organization. The short-term pain is far lesser than the longer-term systemic tension. Your functional employees will be thankful for the transition and be free to continue to do great work.

I know many companies feel that if you don’t take care of your customer, somebody else will. At Micrel, the semiconductor company that I ran for 37 years, I told my employees that they were number one. One of my strongest beliefs is that if you don’t take care of your employees, they are not going to take care of your customers. Authentic service is a cascading concept.

Positive impacts of employee focus

With our focus on the employees, we were able to reduce turnover to less than half of what it was in other similar companies. In addition, we had a large percentage of our employees that returned to the company after they left – we classified these as boomerang employees. We were able to have such a low turnover and high return rate, because we had a culture of honesty, integrity and dignity of every individual.

We had regular communication meetings with our employees. We were upfront and honest about progress, challenges and ways that we sought to outperform our competition. We shared in collective successes; we were honest when inside or outside factors were prohibiting progress we otherwise sought to make. Time and time again, our employees told us that the culture of honesty, integrity and clarity resonated in not only their professional, but also had a profound impact on their personal lives.

Operationalizing communication

Every Friday we had a 2-hour communication meeting with representatives from each of the departments. At the end of these “Operation Meetings”, we had a talk given by one of the members of the Operation Staff, usually my staff. These talks were generally motivational talks. For example, we used the Friday Talks to inspire, reinforce our values, guide our management in leading the rank and file, and groom up-and-coming leaders.

Promoting decency in the workplace

We forbid the use of vulgarity and other condescending language with our employees. We wanted our employees to feel at home. We wanted them to feel safe and valued as individuals. By maintaining a high quality of interpersonal communications, we fostered greater willingness to collaborate even among job functions that are not traditionally in positions to naturally collaborate together.

We also encouraged the concept of when we met with each other to say, “How can I help?” I often speak of the concept of servant leadership as the very powerful means for developing the discipline needed to function at any level within an organization – with a healthy balance of humility. To lead requires knowing why people follow. Individuals simply can’t learn this if they don’t have the practice of following in their own respective lives. Always think of ways to serve employees – make it a clear demonstration of actions. I’ve personally adjusted poorly hung pictures, served up pancakes at company functions and taken the time to sit down for a few minutes with a team member who had recently lost a family member. While seemingly small tasks, I’ve been told by long term employees, even our boomerang employees, that these efforts remain in their memories and experiences at Micrel.

The importance of the line supervisor

Most employees who left the company said that their reason for leaving was that they didn’t like their immediate supervisor, which is the case in nearly every enterprise. Here again, to reduce turnover, we spent a lot of time with department heads and line managers to help them improve their skills working with people. We provided regular leader training sessions, I had an open door policy for employees at all levels to raise issues or ask for leadership direction. Keys to success in creating a culture of building strong new leadership – at least in my experience – were collaboration, diplomacy and honesty.

Authentic focus

Humility is an essential human trait. Business leaders who put their egos aside and consistently demonstrate the best interest in the company are more likely to inspire and engender the same emotion from their employees.

One example of behavior conditioning and role modeling – As CEO, I tried to know everyone’s name. I was frustrated with myself when I did not know an employee’s name and said, “I’m sorry I can’t remember your name.” It was remarkable to note, that with this simple technique, as years went by, I don’t recall missing another person’s name. I found that in leadership, the more I reviewed a particular principle, the more frequently I acted in accordance with that principle.

If you want a company that has a focus on your customers, you need to have the employees who are happy, dedicated, and loyal to your company. In other words, make your employees number one and they will be naturally conditioned to then make customers number one.