Ray Zinn, the longest serving CEO in Silicon Valley, sits with Trey Taylor, author of “A CEO Only Does Three Things” for a chat about the priorities facing every business leader.
Ray Zinn: Hello everyone, this is Ray Zinn. I’m the author of Tough Things First. Welcome to another Tough Things First podcast. We really appreciate you joining us and listening to these podcasts. My guest today is Trey Taylor. He is the author of a new book, brand new book, called, A CEO Does Only Three Things. I’m so happy to have you on Trey. Why don’t you give us a little bit of background on your book, and why you wrote the book, and then we’ll take it from there.
Trey Taylor: Yeah, Ray, great. Thanks for having me and good to be with you. I get asked this question a couple of times a week now with the book being on Amazon and doing a lot of media in support of the book. The answer is pretty simple. I heard a speaker one day say that the only moral imperative we have is to be the person we needed when we were younger. I thought, gosh, that’s just a good way to live your life. I really noodled on that for a long time. One of the answers I came up with was that I needed a book on how to be a CEO when I was a young CEO. I set that out as a journey a couple of years ago and wrote the book and present it as a gift to those CEOs who are starting out now. But then as the book has come into its own, I’ve heard from CEOs who’ve had the position for a long time, that there’s wisdom in it for them as well, that concept of finding your focus in the C-suite again. So, it’s had a really good reception in the market, and for that, I’m grateful.
Ray Zinn: It’s interesting, a CEO does lots of things. Your book really focuses on the three things that they really have to do, as opposed to the three things that they do do. It’s interesting that you concentrated on the three things they must do, as opposed to the many things that they do on a daily basis. I’ve been a CEO for 37 years and run my company through many, many downturns and difficult times. I can certainly empathize with your point that there may be lots of things they do, but only three things that they must do. Let’s review those, if you would. Trey I’ll let you start off by talking, what’s the first thing that they must do?
Trey Taylor: Yeah, absolutely. It’s just like you and I were talking previously, every CEO says, oh gosh, I wish I had three things to do and only three things to do. Of course, we understand that, we understand that the task list is always there, the to do list is always there. You have things that you need to assist in, things that you need to touch, that sort of thing. But the three things that we think a CEO should really only do are the three things that the CEO only can do. No one else in the organization can own those things. So, those three things are culture, people and numbers. When we talk about those, we talk about those in terms of the CEO setting the agenda and giving the model for what a successful implementation unique to those three verticals looks like. If we took the first one, it would be culture.
Ray Zinn: Okay, let’s talk a little bit about how important culture is.
Trey Taylor: Yeah, I think that culture is the prime strategic differentiator between you and your competitors. Very specifically, culture is the shared system of values that show up in the behaviors of your people. No one wants to over-manage another person, and God knows no one wants to be micromanaged by another person. So, culture is sort of the invisible manager of people, always standing in the back of the room saying, wait a minute, let’s make sure that we’re doing things in association with our values. We know if we look at the root word of culture, it’s the same root word shared by a lot of other words that are important, like cultivation and that sort of thing. When we look at it and break it apart, your culture is that which you nurture, that which you care about enough to provide it with nutrients and sustenance, and that sort of thing, to make sure that it’s prevalent in your organization.
Ray Zinn: Yep, and in my book, Tough Things First, that I wrote several years ago, I focused mainly on the culture of the company, and Micrel, the company that I ran for 37 years, our culture was, number one, honesty. Second is integrity. Third is dignity of every individual. We never allowed any swearing, condescending language, at the company. The fourth is, doing whatever it takes, no excuses. In other words, we all make mistakes, but as long as you correct it, no harm, no foul, then it’s okay. That was the four cultures that we had at Micrel.
Trey Taylor: Yeah, that’s great. I would assume, from hearing those four things, that you have an extremely execution oriented culture, that you guys set your milestones and you hit them. Because of that, you could see those values that you just shared, showing up in the behaviors of your people and producing the results that you wanted to see.
Ray Zinn: Absolutely, which leads us into to your second point, because employees are the backbone of the company. Without your employees, your company is nothing. Everybody has brick and mortar, but it’s the people that make the difference. At Micrel, the company I ran, we had the highest boomerang of any company in our industry. Over half our people who left the company, came back. We had the lowest turnover in our industry. So, on an annual basis, our turnover was like 7%, compared with 15% for the industry.
Trey Taylor: That’s amazing. Yeah, and that’s exact testament to the CEO’s job of selecting the right people to be part of that culture, recruiting them in the right way, but also to your point, retaining them in the right way. Sometimes I get raised eyebrows from CEOs to say, well, wait a minute, you expect me to go recruit people to come into the organization, and then you expect me to mollycoddle them while they’re here so that they stay with the job. The answer to that is, yeah. That is what we expect of a CEO.
Ray Zinn: Absolutely.
Trey Taylor: You obviously have done this, but we have to change this mindset almost to a Hollywood mindset, where we talk about talent, recruitment, retention, making sure that we’ve got the right leading man or leading lady to play the role in the script that we are writing. When we change CEO’s minds about that, when we show them how desperately important it is for them to be engaged with the talent, engaged with the people, and what that does for the overall long-term success of the business, we really have an impact.
Ray Zinn: That’s the way I believe we were so successful, is because the fact that we did believe in our people, we built upon that premise that people make the company, not the other way around. We really did coddle, as you would, our people and we made them feel like they were at home. I talked about the company is nothing more than just an extension of your home. Anybody that understands why they work, knows that they work to provide for their family. So, family is number one. Having that culture of the company is just another room in your home, makes them feel more like it’s home.
Trey Taylor: Yeah, it does, I’m sure. You see that in the results that you shared with me a second ago, that people might look and say the grass might be greener over there, but they don’t stay long, they come back.
Ray Zinn: Exactly, that’s what we call boomerang. People that leave but come back. I mean, over half our people who left the company did come back or wanted to come back. Let’s talk about your third one, go ahead.
Trey Taylor: The third one is numbers. Some of the pushback I get from CEOs when I say that numbers is part of your job, some of the pushback is, well, I have a CFO for that, the CFO runs the numbers. But we’re talking about something a little bit different. What we want to see is the CEO saying, in a very transparent way to everyone in the organization, this is how we make money, this is how the money is spent once it’s made, these are the things that are important, and this is how we measure them, these are the milestones that we look at, that sort of thing. Other people may own the task of tracking the numbers, and reporting the numbers, and saying, hey, we’re falling short here and let’s pull up here. But the CEO really has to be a forefront in saying that, this is what is important to us as an organization and setting that agenda for the numbers.
Ray Zinn: They own the numbers, the CEO owns the numbers. So, say what you want, that business cycles go up and down, and everybody has problems, and we have to work our way out of a situation, but the buck stops at the CEO’s desk. He owns those numbers.
Trey Taylor: That’s exactly right. So many CEOs and CFOs today have this pact with the devil where they split that responsibility. You and I both know what happens to split responsibility, no one ends up carrying it. So, I don’t think that’s right. I think that when I study really great organizations, the CEO, at the end of the day, knows what Wall Street knows, which is he owns the numbers.
Ray Zinn: That’s what we did, is made sure that our employees understood those numbers. We went to great pains to communicate those numbers to every single employee of the company, regardless if they were a vice president or just a person working on the line. We wanted to make sure they understood the numbers and how they arrived. We all took ownership in these numbers, but the buck stopped at the CEO’s desk. It worked out well, because once my people knew that they were part of the success of the company and its numbers, then they took ownership too.
Trey Taylor: That’s exactly it.
Ray Zinn: Yeah, you don’t have just the boss taking ownership, you have every single employee wanting to be part of that ownership.
Trey Taylor: Yeah, we have a great story that came out of one of our consulting arrangements, where there was a manufacturer who had a large line built. As you do on those kinds of things, technology improves. So, after 30 of running some old equipment, they upgraded the equipment. The expected productivity gains didn’t arrive. They really couldn’t figure that out, so of course they have to hire consultants to figure that out. So, the consultants come in and they go talk to the foreman, and the foreman says, I don’t know, we’re doing all of these things, everything’s correct. He goes down onto the line itself, and he looks at the guy running the line and they’re on a two hour break. He says, well, why are we on a break here? This is brand new equipment. Why are we just sitting around waiting on it to cool down?
The line guy says, well, we don’t know, but we’ve always done it that way. No one ever asked us why we would take two hours a day after we replaced the equipment. So, just talking to the guy down the line, they figured out immediately, that they were still running things as if the old equipment was in place. As soon as they identified that and fixed that problem, all of the promised productivity gains came in. The funny thing about that is how many companies would never have figured that out because they don’t go and talk to the people closest to the problem. We see that a lot of times, great CEOs really do management by walking around and talking to their people and figuring out what to do. If you don’t share with the people what’s important in terms of your culture and your values in terms of what it takes to get someone on board and keep them on board in terms of what the numerical definition of success looks like, then you don’t really have anything to talk about with those folks anyway.
Ray Zinn: It reminds me of a story that I heard many years ago. A nine-year-old girl was watching her mother prepare a Sunday roast. She would cut one inch off of each edge of the roast, and so she was curious as to why her mother did that. She says, mom, why do you cut off so much of the roast? Her mother says, I don’t know, ask your grandma. Anyway, so the little girl one day was with her grandma and she asked, hey, grandma, why do you cut off an inch off each side of the roast? Her grandma says, oh, that’s because that was the size of pan we had. It just goes to show you that habits are hard to break. We do things because that’s the way we used to do them.
Trey Taylor: It’s so true. We see it in my own organization, which is a 52 year old organization. I’m the third generation in that organization. We see it all the time. It really means you have to question a lot of things, is sometimes there are sacred cows for a reason, but a lot of times they were making the best of the situation 10, 15, 30 years ago, where really and truly it doesn’t make sense to do it that way anymore. We uncover that, of course, in so many organizations. The key is that the CEO has a unique perspective sitting on top of the pyramid, if you will, seeing everything that happens below them, gives them a special prescription in their lenses to be able to say, wait a minute, maybe numbers and people, maybe they’re not coming together here to work the way that they need to work, that sort of thing. We uncover a lot of success that way.
Ray Zinn: When we hired new people, they would inevitably say, well, that’s not the way we did it where I used to work. I’d fight that tooth and nail, I’d say, you’re not where you used to work, you’re here at Micrel, so I don’t want to hear about this is not the way we did it at where you used to work.
For those CEOs who are listening, do not accept the premise that if it’s not like it was at the other company, that you have to change. You change it if you think it’s right, and do it the way you want to do it, and the way your company best adapts to the problem.
Trey, I’m so grateful that you joined me on this podcast today. It’s good to hear about you and your book. So, let’s rehearse now, where can we buy your book, Trey? I’m sure you’re at Amazon and others, but let’s talk about where you can buy it.
Trey Taylor: We are. Yeah, we’re definitely on Amazon. In the launch of the book, we’ve been really gratified to achieve the Amazon bestseller status, beating out some really good other books as well. So, Amazon, Trey Taylor, T-R-E-Y, is my name. You can find it there, A CEO Only Does Three Things.
Ray Zinn: Thank you so much for joining us today, Trey. I appreciate you taking the time. Once again, please join us each week on The Tough Things First podcast, we have great messages, and great people that we interview, and great subjects that we cover. You can find my book, Tough Things First, also on Amazon and [inaudible 00:17:03] your good book retailer. Also my new book, Zen of Zinn, which by the way, my second book of Zen of Zinn will be out shortly, probably the next six months, so you can see it. Again, please join us again on another Tough Things First podcast.