Ray Zinn is no gambler. In business, his trump card is knowledge. In this Tough Things First podcast, we explore why smart persistence is educated decision making.
Rob Artigo: Well, today it’s really about smart persistence, knowing when to double down and when to just walk away gracefully. This is one of the toughest calls any leader can make. So let’s start with double down side. How do you know when to just keep on pushing when you’re facing challenges?
Ray Zinn: Well, look at the direction that things are headed. When things are going well, double down. When things are not going so well, back off. We talked about that in earlier podcast about the stock market. When the stock market looks like it’s rolling good, double down. And that’s what I’ve been doing, is I’ve been doubling down on the market for the last year and a half and I’ve been just plowing my resources from bonds into the equity market and it’s paid off. But now I see things kind of peaking and I’m a little concerned.
Ray Zinn Cont:And so now I’m pulling a little bit back off the table and moving more back into fixed assets and less into equities because again, I see things are kind of peaking. So how do you know when to back down and when to press forward? Is look where things are headed. I mean, we do that when we drive a car. When we see a flashing yellow light or yellow light comes on, we slow down. When we see the green light comes on, we press forward. When we see the red light comes on, we stop. Be aware of the direction or dynamics of business and the market. Know when to hold them and when to fold them. I think there’s a song about that, Rob.
Rob Artigo: The gambler.
Ray Zinn: Yeah. Know when to hold them and know when to fold them.
Rob Artigo: Yeah.
Ray Zinn: This goes right along with our topic today. You got to know when to hold and when to fold.
Rob Artigo: How do you develop that judgment? Think of yourself and of course you know from your lifetime of experience in business. How do leaders in business or entrepreneurs develop the judgment to make a call like that? I mean, sometimes the amber or yellow light looks a little orange or it looks a little more, I don’t know, something else.
Ray Zinn: Chartreuse.
Rob Artigo: Like rainbow or something. Yeah, Chartreuse. And then how do you develop that to make that judgment call? It feels like the tough things first. I mean, doing the tough things first.
Ray Zinn: My pilot loves Bridge. I mean, he’s a Bridge player. For those of you who’ve ever played the game of Bridge. And it’s a very strategic game. It’s like running a company. It’s a card game. I don’t know if ands or what’s about it, but you have a partner and you play against the other partner, their team. Usually there’s two teams, you and your partner and them and their partner. You got to be watching how they’re playing and how they’re calling their suits and their Trumps and whatever.
And you just got to be aware. I think the reason that most companies fail is because they’re not being aware. They’re not realizing what the other side’s doing or what’s happening in the marketplace. So running a company is very strategic like playing Bridge. It’s very strategic and you have to pay attention. You got to know when to hold them and when to fold them.
When I ran Micrel for 37 years, I had eight downturns and so I had to know when to hold them and when to fold them. And I did that and we were very successful. I mean, not that the downturn didn’t hurt. It hurt terrifically, but we were ready for it. We were prepared. The being strategic like in playing Bridge is very important in running a company. You got to be aware of where the market’s headed. Double up when it’s going well and double down when it’s going bad. And then just be like the song about playing poker, I guess it is, know when to hold them and know when to fold them.
Rob Artigo: Yeah. And I think that when you say fold them in a practical business sense, we’re talking about pivoting mostly. Because if you want to turn a walkaway moment into an opportunity, you don’t just walk away into oblivion, you walk and you turn in a direction that’s going to be helpful. So that’s a pivot. Right?
Ray Zinn: Well, I like playing basketball. I mean, there’s a lot of pivoting in basketball and there’s a lot of pivoting in Bridge and other card games. You have to be willing to pivot, change, restructure, modify, reengage. If you stay on the same suit or the same Trump as you would, you’re going to lose. You got to know when to hold them and when to fold in there, Rob.
Rob Artigo: Well, Ray, for our listeners, entrepreneurs, executives, and even people managing careers or big projects, is there a practical framework they can use for making decisions like that?
Ray Zinn: Read the Tough Things First. That book covers that. I mean, that book is it in spades. I cover a lot of stories, a lot of things that I had to do to run Micrel successfully. Micrel, we ran 37 years with only one year where we lost money. So 36 out of 37 years, we were profitable. That is a record. There’s no other company that I’m aware of that had that kind of a success record of only one loss in 37 years. So if you’re an athlete and you’ve got a track record of winning 36 out of 37 times, you’re a dog gone good athlete.
Rob Artigo: And you were a dog gone good business athlete so to speak. So…
Ray Zinn: Thank you.
Rob Artigo: Thank you for another insightful conversation, Ray. Listeners can pick up your book. The latest one is Zen of Zinn Daily and of course the Essential Leader, and Ray was just talking about Tough Things First. This is where you can find great stories that are, I guess you can call them specific Micrel stories where smart persistence and at a good decision to pivot made a big difference. So-
Ray Zinn: Absolutely.
Rob Artigo: … don’t waste that knowledge. Get in there and do the Tough Things First was to pick up a book and read. A lot of people don’t do that anymore, but you should. So visit toughthingsfirst.com. More episodes are there, blogs and information on the ZinnStarter mentoring program. Also, drop your thoughts in the comments. What’s a time you had to decide whether to double down or walk away? You can drop those in the comments. Just tell us what you’re thinking and we’ll bring them up on a future podcast because we’d like to know and want to learn from you. Remember, do the tough things first. Right, Ray?
Ray Zinn: And you know-
Rob Artigo: Oh.
Ray Zinn: … the book about Tough Things First is know when to hold them and when to fold them. It covers that. It covers how I was able to run Micrel for 37 years and 36 of those profitably.
Rob Artigo: Thanks, Ray.
Ray Zinn: Thank you, Rob.
