Ray Zinn is joined by his former CFO at Micrel, Robert Barker, to discuss the culture of success fueled by the attitude of doing “whatever it takes. No excuses.”
Ray Zinn: Welcome to another Tough Things First podcast. We are so delighted today to meet with you. And I have a very special guest with me today. His name is Robert Barker. He was my CFO for many, many, many years while I was at Micrel. And so, welcome, Robert. Good to have you with us.
Robert Barker: Thanks a lot, Ray, glad to be here.
Ray Zinn: Subject that you chose today, which I think is interesting, happens to be one of the cultures of Micrel. We had four cultures, honesty, integrity, dignity of every individual means respect for everyone, and then the fourth was doing whatever it takes, no excuses. So, that’s the one we’re going to talk about today.
Robert Barker: I’m going to start by just saying that when we had a plan, I knew, because of the culture, that I needed to do whatever it took to make that plan, to make those numbers for the quarter. And we did that consistently. And we did it because I could go to anybody in the company, I tell them this is what we need to do, this is what the plan is, and here are all your problems and this is how we go about fixing the problems. Or I would tell them what the problems were, they would tell me how to fix the problems. But I think everybody worked together, and we all knew from a top down, this was our revenue plan, and this was our profit plan for the both the quarter and for the year. And we were successful, because I think everybody in the company did whatever it took to fix the issues. Because everybody has a plan, but it’s the problems that come up in the middle, and we knew we had the authority to do whatever it takes.
Ray Zinn: What’s interesting, when you were interviewing with me, and I think it was in 1993, if I remember right.
Robert Barker: Yeah, it was.
Ray Zinn: We were talking about ultimately taking the company public, because that’s one of the things that I wanted to do. And one of the reasons that I was interviewing you as the CFO, was that I wanted to ultimately take the company public. And you thought I was wanting to do it the day you joined, and I said, “No, you take a look at it and then you let me know when you think we’re ready to go public.” And I thought that was interesting, because you were thinking I was ready to go public the day you joined the company, and you of course didn’t want to take on that unless you felt comfortable with it. So, you spent the next several months digging into it as you joined the company. You looked at the various issues that we had. And then sometime around the first part of 1994, you came to me one day and said, “I think we’re ready to go public.”
Robert Barker: That’s right. That’s exactly right. It took me about two or three months to figure out the financials of the company. And we were in a big fab expansion at the time. And I looked at that and I said, “You know, if this happens and the cost is really going to come down, and the gross margin is going to go up pretty dramatically here.” And we had a lot of backlog at the time. The company had wonderful products that were designed in with all the leading edge notebook companies, computer companies, and just a number of different designs, and I said, “Boy, this is the time. We can do this.”
And we have a plan, and we adhered to that plan, we made that plan. The ramp happened and it wasn’t easy. It wasn’t easy getting to the IPO, and it wasn’t easy after that. But the company kept ramping, and we kept making our plans, because everybody in the company was committed to doing whatever it took to make the plan.
Ray Zinn: Well, once you start that process of doing an IPO, all the S1 information you got to pull together and whatnot, you’re committed, because a lot of money is going to be spent preparing for that IPO. And so, you got to do whatever it takes, no excuses. And so, as I said, the culture of the company, which I think was well entrenched by the time you came on board, was doing whatever it takes, and not shirking in that responsibility of doing whatever we have to do to make things happen. What I like in it too, is that, a mistake is really not a mistake as long as you correct it. So, we all make mistakes, we’re going to make mistakes our whole life. I mean, every day, we’ll make some form of a mistake.
But it’s not a mistake if we make it a no harm, no foul. In other words, if you fix the problem or fix the mistake, then it’s not a mistake. So, that’s the concept of doing whatever it takes is, as long as you’re willing to correct whatever problem comes up, then it’s not a mistake. It’s not, no harm, no foul as I said. So, we talked about that because we met once a week, as you remember. We used to meet on Friday at 1:00 o’clock. And so, we talk about it. We’d have all the staff there. Anybody that wanted to come, could come. And we just drummed that in. Everybody reported on their particular area of responsibility, whether it be quality, or HR, or finance, or sales, or operations.
We had representatives from each of those organizations. And then we just talked about what are the issues, and we assigned responsibility. Who’s going to take care of this? Who’s going to take care of that? And then report back. So again, doing whatever it takes includes reporting back, saying, “Here’s what I’ve done. Here’s how I have fixed the problem.”
Robert Barker: When we were going public, when you do that, you have auditors that come in, and you have a lot of them. You have a lot of auditors that come in, and they look at everything that the company has done, in this case, for long-term back. And every day there was an issue they came up. Every day there was an issue, when you do this. I think our process lasted probably from September until December, maybe even before that.
Ray Zinn: Even before that.
Robert Barker: And every day, there was an issue that we had to solve and overcome, and you just kept going with it, and just kept a cool head, and just keep going, keep moving through it. And as the years went on, you’re right. There were so many things. One of the things that before the socks came in, what I had was, I had policies and procedures. And every year before the annual audit, in probably 1st of November, we would all sit down and I would hand out all the policies and procedures to everybody in all the organizations. And I’d say, “Read this and tell me if this is what you’re doing. Because this is what you said you were going to do. This is what we told the auditors last year that we were doing.”
And when you’re growing rapidly, the people would go, “I’m not doing that.” And I’d go, “Oh, why aren’t you doing that?” They go, “That didn’t work. Didn’t work anymore.” “Well, well, we got to change it. Okay.” So, about half of them, when you’re growing, the policies and procedures, they don’t last. You have to change them and adapt as you’re growing.
Ray Zinn: Yeah. That’s a living document. And I think it took us six months Robert, to go through the whole process before we actually hit the road, as they say. So-
Robert Barker: Oh, yeah. Yeah. Yeah, yeah. We were really started in June, like a head start a little bit, and yeah, you’re right. And then September was when… Yeah, you’re right. We had to, because we filed in September.
Ray Zinn: Well, you had to dot every I, and cross every T. I mean, they’re looking for anything and everything. I mean, back when we took the company public in ’94, you had to be profitable for a few months, or year, or whatever. I forgot now the length of time you had to be profitable for a period of time. Now you don’t in today’s market. But back when we went public, you had to be profitable. And boy you had to prove it. You had to make sure that everything you wrote down, everything you said was absolutely 100% correct. And they must have five different people, because they had different teams that were put together on this thing by the bankers. And they had five different people reviewed every single document, everything that you were going to present to the SEC was spot-on.
So, it’s again, whenever you want to succeed, you have to commit to doing whatever it takes. You can’t shirk, saying, “Oh, well, I got to go play golf or I got to go home. I got to take care of this or that.” You really have to make it no harm, no foul. In other words, if you’re going to fix a problem, you can’t put it on somebody else to fix, you got to take care of it yourself, and you got to see that it’s fixed. And so, that’s the concept that we had at Micrel, which is doing whatever it takes, no excuses. Meaning, your problem is not for somebody else to solve, your problem is for you to solve.
Robert Barker: I think one thing that is very unique, and I don’t know, maybe this will never happen again, but the SEC after they reviewed our document, we’ve actually fought hard for some things that we wanted in that document that people said, “No, no, no. You shouldn’t put that in there.” And we said, “We’re going to put this in here. We think this correctly reflects our company and the way we run it.” And in the end, the SEC had no comments.
Ray Zinn: Right.
Robert Barker: Everybody was shocked about this. And I have never heard to this day of any other company doing a public offering with no SEC comments.
Ray Zinn: Yeah. I agree with you, Robert. That’s that’s another hallmark I think that we had at Micrel. Everything we did was spot-on. When I finished my book, Tough Things First, we submitted it to McGraw Hill for publication. It was the first time in their history that they came back and said that we have no comments. In other words, they took the book as is.
Robert Barker: Really?
Ray Zinn: Yes. Uh-huh. So, I thought that’s just the Micrel way, doing whatever it takes, no excuses. And that’s the way we ran the company, and that’s my philosophy today, to this very day, even though I’m technically retired, is still, I do whatever it takes, I don’t put it on somebody else to solve it for me. I solve my own problems, because I want no harm, no foul. Meaning, I don’t like mistakes, I hate mistakes. And so, the best way to overcome a mistake is to fix it, and then it’s not a mistake if you fix it.
Robert Barker: That’s right. And if you have a philosophy of like that, I believe that you’re constantly doing new things, going to new adventures, trying new things. You’re not afraid to fail, and you keep growing, and you keep an active mind and will continue to contribute to society and the world for as long as you can, as long as you’re physically able. I think that’s what you should do. And I like this. I mean, I love that do whatever it takes.
I have one more. I was the also responsible for Human Resources, and I had to give the introduction. As part of the introduction, I came and every day I had a portion of it that I did. And one of the portions, when I told the people about the different philosophies of the company, when I came to this one, I said, “I want to tell you a story about this to illustrate the point.” And I said, when I was a young captain in the Air Force, I was in Germany, and we had a problem. We’d lost an engine on an aircraft. So, a bird had flown into it. And everybody else on the team was going out for the weekend. And actually, I was sick, and I said, I didn’t want to go. And they said, “Fine, you need to stay here. And you need to get an engine for our aircraft.”
And so, the Colonel told me, he said, “That’s your job for the weekend, is to get this engine.” And I sat there, and about two hours after they left, the phone rang and a master sergeant called and said, “We found your engine.” And he said, “If we get your approval, we’ll take the engine off your aircraft in Germany. We’re going to take it off and then would fly it over Saturday to Sunday. Sunday, we’ll install the engine, you’d be ready to go on Monday.” And I said, “That’s great. Go ahead. Let’s do it.”
And the guy goes, “Well, I need specific approval from you. I need to know who this is. And I want to let you know that the engine that we’re going to take off and use is coming off of aircraft, Air Force Two.” And he said, “So, who authorizes this?” And I looked around and there was nobody there. And I said, “This Colonel told me to do it.” And I said, “Well, Captain Barker does.” So, the next day I went out, and they were taking the engine off. And on Sunday, they were putting the new one on. But the plane we were flying was a camouflage plane. It had been used in Vietnam. And the cowling that they put around this engine, was from Air Force Two.
Ray Zinn: It didn’t match the color.
Robert Barker: It didn’t match. And so, the next Monday, when the Colonel came up, first thing he said, “Well, did you get the engine?” I said, “Yeah, yeah. It’s on there.” “It’s okay. That’s great.” And so, we’re walking out together and he looks at this, and he turns at me and he goes, “Where’d you get that engine?” And I said, “Don’t ask.” But I would tell him, I’d say, “Look, if you’re given a job to do,” I say, “We’re not asking you to do anything illegal or immoral, but you got to do and take the chances and responsibility and nobody is going to fault you for this.”
Ray Zinn: That’s a good segue to end our podcast for today. So again, Robert, I so appreciate you joining me today to do this Tough Things First podcast. So, you’ve worked for me for many, many, many years and enjoyed just solving many, many problems that we had at the company. We ran Micrel for 37 years, 36 of those were profitable. And I’m very proud of that. So, that’s a hallmark of what you’ve done and when you were CFO as well as when you were running HR.
So anyway, join us for another segment of Tough Things First, and look up my book, Tough Things First, you can get it on Amazon or any other favorite retailers. Also my other two books, my new ones, Zen of Zinn, and Zen of Zinn 2. We’re finishing Zen of Zinn 3, and it’ll be out. So again, please join us for another podcast of Tough Things First.