Woke Capitalism

Woke Capitalism
September 22, 2021 admin
In Podcasts

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.

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