Why do startup founders kill themselves work themselves to death? They shouldn’t, according to Silicon Valley’s longest serving CEO.

Guy Smith: Hello everyone in podcast land. My name is Guy Smith. I’m your guest host today for the next episode of the Tough Things First podcast, where we’re going to a chat with Ray Zinn, longest serving CEO in all of Silicon Valley. And we’re talk about subject that’s near and dear to my heart, which is being a founder and working your butt off, which oddly enough is probably not a good combination. It’s almost doctrine in Silicon Valley that founders need to kill themselves at their desk working the 80 hour work week, and Ray Zinn has been very vocal about how that’s kind of nuts. So good morning Ray, how are you doing today?

Ray Zinn: Doing just fine, Guy. How’s it there in North Carolina land?

Guy Smith: Well, I can’t complain. The view from my office is an unobstructed view of the Smoky Mountains and it’s a pleasure to come to the office every day.

Ray Zinn: You’re in the office, aren’t ya?

Guy Smith: I am, yeah. So let’s talk about founders. You have been on record on more than one occasion saying that a founder and a CEO on average does not need to work more than 40 or 50 hours a week. Why so?

Ray Zinn: Well, you know, for one thing, the body needs rest. Studies show that you need somewhere around seven to eight hours a night rest, no matter how old you are. In fact, the younger you are, the more rest you need. Even as a new entrepreneur, the more rest you need as opposed to the more work you need. What happens is that if you are just putting in many, many hours with the desire, with the effect to show everybody how hard a worker you are, you’re going to be less efficient. You can only put in so many effective hours a day. Most studies have shown that we’re only productive about four hours a day, which is only half of a workday basically.

Trying to put in 12, 15 hours a day with only four hours of productive work, that means you’re putting in 10 hours of unproductive work, and that’s not good for your people, it’s not good for you, and it’s not good for your family. What you want to do is work smarter, not harder, as I say. The most time you really need to spend… You have to be open a certain number of hours a day, as you would, is in that eight to 10 hours is his max. Your body needs rest and your body includes your mind, and so you needed a diversion. So that’s why I say working more is not better. It’s worse. (more…)

What does Silicon Valley’s longest serving CEO, and now a tech investor, think about tech investing and the current state of the industry? In the episode of the Tough Things First podcast, Ray Zinn lays it bare.

Guy Smith: Well, good morning to all the audience and welcome to another episode of the Tough Things First podcast. I’m your host today, Guy Smith. As always, we have Silicon Valley’s longest serving CEO, Ray Zinn. How you doing today, Ray?

Ray Zinn: Well, hopefully better than you are back there with that ice storm. So yeah, we’re doing fine. We might get a little rain, but it looks like a decent day.

Guy Smith: Well, there’s an old joke that meteorologist is the Greek word for liar and all of the forecasts they made for ice here did not happen. So, thank God for that. We don’t need any down power lines. Hey, so what I wanted to talk about today is Silicon Valley tech investing. After your Micrel years, you got into a little bit of investing on your side. I’ve been on both sides of the pitch table in Silicon Valley, so I’m kind of intrigued by some of the commonalities, some of the traits, some of the things that we’re seeing out there in the marketplace in terms of startups and investing.

So now that you’ve been actively on the other side of that table for awhile, what are some of the common traits that you’ve noticed about companies that have been pitching to you for investment money but never got to their serious discussion phase? Where did they fall down in their approach to you?

Ray Zinn: Well, that’s an interesting question, Guy, because I’m somewhat of a old school investor, meaning that I tend to like to see all the nuts and bolts in place in a company before I consider investing. So, there are two kinds of companies that I see. One is someone who’s just iterating something that’s already been done out there and just wants to get their two cents worth in or get to get themselves involved. The other is a totally new market, something that’s kind of disruptive, and they think that they’ve got the next most exclusive idea, and it will make us all a fortune.

So, those are the two kinds of companies I see. In both cases, what I see as that is that they’re more wannabes. In other words, they want your money, and they talk about their investment being sweat equity. In other words, they’re just putting up their sweat equity and not putting any money into it themselves. I was talking to a fellow the other day, and I said, “Okay, how much money do you have in your company?” He says, “Well, you mean investment?” I said, “Well, how much do you have invested?” He says, “Well, I really can’t do much because other than selling my house, or mortgaging my house, or refinancing my house. I really don’t have the funds to do that.”

I said, “Then, why do you want to go into business?” He says, “Well, because I got this great idea.” I say, “Yes, but you’re using other people’s money to do it. So if you’re not going to put yourself at risk, why would you expect someone else?” “Oh, well, I’m putting up sweat equity, I’m working for no money,” I said, “For how long? How long has it been since you have been working with no money?” “Well,” then he kind of [ham har 00:04:21] around, and I said, “So, the money you’ve raised so far, the money you’re raising, you’re using to produce a salary shares for yourself.”

“Well, yeah. I have to live,” and that turns me off. I watch Shark Tank, obviously, from time to time, and I’ve seen the same kind of thing that when a shark see that they’ve not really, put themselves at risk, other than saying, “Well yeah, they’re working part-time or they’re willing to start in the future putting in full-time,” it turns the sharks off, and it turns me off too.

Guy Smith: Well, and just to pitch your book for you on this account, there’s a wonderful story in the book, Tough Things First, about your origin story. When you launched Micrel, you went to banks, and banks never lend money to startups, but you were putting almost everything that you had on the line, your house, your cars, your investments, et cetera, et cetera, to get going. That showed the bankers that you had real teeth in the game.

Ray Zinn: Yeah. Well, as a personal guarantee. What a personal guarantee is that you take out a loan with the bank and, or lending institution, and then you’re willing to put up your assets to protect the bank in event of a default, and that’s called a personal guarantee. I certainly did that. The banks wouldn’t never have loaned me the money had I not been willing to put up all my assets.

Now, some of my partners weren’t willing to do that, but the bank was relying on me primarily because of the strength of my net worth to back up the loans. So, the one that’s really at risk was me. Of course, I was the present CEO anyway, but the bank absolutely demanded that I personally guarantee the loan.

Guy Smith: Well, and given the way bankers views startups, I’m assuming that that had to be the position that they weren’t going to even ponder a startup that didn’t have the founders financial backing in that, because it basically creates some sort of guarantee of efforts, some sort of guarantee of commitment.

Ray Zinn: Well in a bank case, Guy, they don’t have a financial, I mean, I shouldn’t say an equity investment, in the company. They just have that loan. They don’t want to loan to a company that doesn’t have the cashflow to make their monthly payments. For example, if you went out and bought a home, or a car, or some other expensive asset and took out a loan, they’re going to use the home or the car as collateral for the loan. Then, they’re going to look at your ability to make these monthly payments to pay back that loan.

If you don’t, then they’ll foreclose on you or they’ll confiscate your car. So, they’re very specific about wanting you to have the ability to make those monthly payments. So what I’ve seen with these startups is they don’t have the cashflow yet, and so they’re unable to immediately begin payments. So you say, “Okay, well when can you start making payments? When are you going to be profitable?” Of course, they ham har around about, “Well, this is a new business,” and blah, blah. Then, that just turns me off.

Guy Smith: Well, and that segues nicely into my next question because a little bit ago, you had mentioned new markets, companies that are developing for new or pretty nascent markets. Are you seeing a disconnect between the quality of the pitches or the business readiness of startups who are going into new markets? When I’ve talked to these people, almost all of them say that they’re relying entirely on first mover advantage, and they think that’s the only thing that they really need. So, are their pitches lacking because they’re depending way too much on that?

Ray Zinn: No, I don’t think so. I think that it’s the same no matter whether they’re going into an existing market or whether it’s called a nascent market, a first mover. It’s not so much the newness of the market or the matureness of the market. It’s more how that CEO or that team views their risk, as you would, in the business.

What I want to make sure is that they’re all. In other words, it’s not one of those things that, “Oh, well.” It’s like me hiring them to run the company, and then if they just decide that they’re tired of running the company, that they all say, “Well, let’s go and look for another job,” and then I’m stuck with the investment because I’m the ones who’s got to cut the money in it. I look for that. I look for how far they’re in to the company. Does that make sense?

Guy Smith: Yeah, that does. That does. I’ve got to imagine it’s kind of tricky with these new market companies. When is it too earlier or when is it too late for an investor to sink money into a company that is attacking, or in fact, maybe even trying to create a whole new market?

Ray Zinn: Well, most of these startups that are into these new mover markets usually get angel funds. In other words, they’ll go to parents, or family, or to angels and raise a small amount of money, and then try to get the thing going. Once they get that going, it’s that kind of seed money, then they’ll go start raising money in a serious way through venture funds or other means to really launch the company. So, most of them die right before they actually get out there and start having to raise some serious money. They tend to fall apart right at the seed round.

Guy Smith: Right. But from an investor’s standpoint, how do you know when the right time to jump in is? How do you know that you’re not too early in the game, you’re not investing before they have shown some real ability? But also, when are do you know that you’re too late to the game, that maybe you’ve missed the prime opportunity in somebody who’s exploiting these new markets?

Ray Zinn: Well, those are two different questions. When you know you’re too early is when they’re not ready. In other words, they don’t have their product fully qualified or haven’t proven it, and so they’re just feeling their way along. In other words, you’re just in a very early, early stages.

When you’re know you’re too late is they’re floundering. They’ve gone for round A, round B, round C, almost the whole alphabet, and they’ve raised a tremendous amount of money, far more than they’re ever going to be able to pay back. So, they’re crying. This is their suicide round. They’re trying to make sure they take, “Okay, this will be it. I mean, this is my last round. If I can just get this round, I know we can do it. Right on the verge, we just got this customer all qualified and ready to go.” So when they sound panic, then you know that they’ve ran out of gas.

Guy Smith: Okay. Speaking of running out of gas, this is kind of a leading question, but Silicon Valley venture capitalist, on average, have a tremendously horrible profitability record. Last time I looked into it, they were getting of returns of like maybe 2% or 3% on the invested capital that they put forth. So, what are the Silicon Valley venture capitalists getting so wrong?

Ray Zinn: Yeah. Well, we should call it Silicon Valley roulette because they do a lottery. They’ve raised lots of money, and most of them have raised lots of money, and need to put that money to work. If they just put it in money market, of course, probably do their investor just as well because you can make probably 2 or 3% on money market, but the investors don’t want you to let that money sit there in money market, so they have to go out and find these opportunities. So, it’s a game of roulette, it’s gambling.

So, this whole concept of venture capital is really just another form of gambling. They’re just playing a lottery. So, they’re looking for that one deal that will make their investors a fortune. We know the record is that nine out of 10 of these startups fail. The reason they fail is they run out of money. The reason they run on the money is because they can’t get to profitability in any kind of a reasonable timeframe.

Look at some of these big companies like Uber and such as that. They’re not making any money, and it’s hard for them to sustain themselves except on cashflow. So what happens is, is that they just fold up. Within the first three years, they’re out of money, and investors just don’t see the recovery, and so they move on to the next lottery deal. So, it’s really a lottery thing. I mean, they’re expecting to hit that one in 10 that’s going to make it for them. In the meantime, of course, they bet on the wrong horse, and they spent a lot of money, and then they have less money to invest in those good deals that are out there.

So, the whole flawed concept of venture capital is the fact that it’s a timing thing. The partnership is usually a five-year partnership, and so they have to get it moving, get out there, get the money invested within the first year or first few months because, it’s going to take five years or so for these companies to really make a name for themselves and become about a viable company.

So these VCs, they spent a lot of time just rushing out, and jumping on these deals, and then just hoping that their winning lottery ticket’s going to pay off for their investors, and it usually doesn’t.

Guy Smith: It usually doesn’t. I mean, the way you describe it makes me think of a slot machine. They’re just continually putting quarters in the machine, and pulling the handle, and the hoping that one of those pulls of the handle is actually the big Jack Pot.

Ray Zinn: Exactly. Exactly. It’s exactly the game.

Guy Smith: Oh, that’s terrible game to be in. You would figure that they would take a little bit more time to analyze trends, narrow down their portfolios, really focus on a few high probability companies instead of just continually pulling the lever.

Ray Zinn: Well, they say they say they do. I mean, they claim that they go through that vetting effort, and they will tell you that they spent a lot of time and energy vetting these out. But if you ever watch Shark Tank, you know that every one of them, everyone of the sharks, is looking for the revenue, that the potential the candidate has achieved. So if you don’t have any revenue, the sharks just turn away. I mean, and the sharks are sharks. I mean, they’re looking for good deals, and they’re looking for ownership in the neighborhood of 15 to 20%.

Whereas in the case of the venture capitalists, are looking at something north of 40, maybe even north of 50. So, that’s an early round. That’s very, very seed round. When a company’s just starting out and they’re just getting their feet wet, they’re more likely to fail. If I look at all the shark programs that I’ve watched, and I bet you less than a third of them that the sharks even jump on. When they do jump on it, they want a huge percentage of the ownership of the company.

Guy Smith: Right. When you’re putting up your own money and trying to get somebody boosted to that next level, you definitely want that equity position, but that’s the game I’m afraid that they continually playing Silicon Valley. Because, so many of these startups are in the early phase, in the seed phase, maybe around a funding that the VCs are trading off the same amount of cash for more equity, and that’s their way of hedging their bets. That’s their way of trying to find that bigger payoff in the end by having that larger equity stake.

Ray Zinn: Right. That’s exactly what they’re doing.

Guy Smith: Yeah. Well, thanks, Ray. I appreciate those insights. For the audience, if you want more insights from the guy who’s basically done it all in Silicon Valley, do get a copy of his book, Tough Things First. You can get it from Amazon. Absolutely entertaining, inspiring read from beginning to end, and you’re going to walk away feeling smarter than you ever have before. If you want to continue feeling smart, tune in for the next episode of the Tough Things First podcast coming out every Wednesday.

Ray Zinn: Thanks, Guy. Look forward to the next one.

Strategy is often easier than execution.

In this episode of the Tough Things First podcast, Ray Zinn chats with Michael Canic of Making Strategy Happen to explore how an organization goes from planning to execution, all while remaining faithful to the underlying strategy.

Michael Canic, PhD, CSP is the founder and Chief Flag-Bearer of Making Strategy Happen®. Through high-impact consulting, action-inspiring presentations, and a wealth of resources, Michael helps committed leaders turn ambition into strategy, and strategy into reality.

Ray Zinn: Welcome to another Tough Things First Podcast. I’m so delighted today to have with me Michael Canic, who is a management consultant specializing in helping companies develop realistic strategic plans. And so Michael, welcome. Hopefully we have a great session today.

Michael Canic: Great. Great to be here, Ray. Looking forward to it. Thank you.

Ray Zinn: Before we begin, Michael, would you please just tell our audience, who you are, what your background is?

Michael Canic: Great. Thank you. Yeah, my company is making strategy happen. We work with committed leaders to turn ambition into strategy and strategy into reality and simply put, it’s the execution where we fall down, Ray. We’ve got good intentions, good ideas. And making it happen is the hard part. So my world, the past 18 years has been focused on making that happen.

Prior to that, I ran the consulting division of the Atlantic Consulting Group. I’ve got a PhD in the psychology of human performance and I’m a former football coach as well. And we can get into that as well. But lots of things that have led to this point. But it’s really around making strategy happen.

Ray Zinn: Well, you know, it’s interesting, your experience as a football coatee is fascinating. So why don’t you just briefly tell us about that and how that ties into what you’re doing with your current company?

Michael Canic: Yeah. The big thing, one of the big lessons I took away from coaching is there’s a big difference between the will to win and the will to do what it takes to win. And you better understand that difference. All of us want to win. We want to be successful, we want to feel what it feels like to win. But are we willing to do what it takes, which is often the detailed discipline, difficult things. Often what we don’t want to do, what we don’t like to do, but the things we have to do to make sure we win. And you see this in successful people, whether it’s in sports or business, whatever field, there is no easy path. But that commitment, that focus, alignment, and commitment is key to success.

Ray Zinn: You know, I’ve heard that over half the athletes and especially in football become bleacher watchers as opposed to a players, because they just don’t have that burning commitment to do whatever it takes to become the best of the best. And so, they’ve done well in little league football or Pop Warner or whatever. But when they got up into the big leagues, college, and pro sports, over half of them are sidelined.

Michael Canic: Yeah, I think that’s right. And how that plays into business, just to take a brief aside here, when it comes to recruiting people, I like to look for people who are often former, whether it’s athletes or excelled in some field, but importantly, Ray, those who weren’t the naturals, those who are the overachievers. Who had to work hard, who had to dedicate themselves. They built the good habits and the good traits which transfer well in the business world. Often the great natural performers don’t have those traits.

Ray Zinn: Yeah, that’s true I think in life. Whether it be as a parent, a husband or wife, it’s the same. We all have to have that desire to see something succeed. We have what, over half the marriages in this country end up in divorce because they weren’t willing to make it work. And as you point out in your writings and your training that this research shows that 60 to 70% of all initiatives fail because of just that commitment. Is that correct?

Michael Canic: Exactly. Yeah. It comes down to what we as leaders don’t do. We lack the commitment. We don’t make certain that all of our decisions, all of our actions are consistently aligned with our intentions. Were unwittingly inconsistent and people pick up on it. So it’s really being, just very painstaking around, “Is every decision I make, every action I take consistent with my intentions.”

And when that’s reflected and people see that all the arrows are aligned, they pick up on that as well. And that’s when you create a focused and energized organization.

Ray Zinn: Well, you talk about commitment, and again, I remember as a college student, we had a hypnotists come to school and was teaching us about hypnotism and how it helps. And so I immediately, I could raise my hand, “I’d like to be one of the hypnotists”, or be hypnotized…

Michael Canic: Hypnotized.

Ray Zinn: Right.

Michael Canic: Yes.

Ray Zinn: And, and so, he did his thing, and he asked me to do some certain things and of course I didn’t do them. And so I looked at him and I said, “Well, I thought you’re going to put me under.” And he says, “You have to want to go under.” And I says, “Oh, I want to go under.” He says, “No, you don’t, by your actions. I can tell you’re not committed to what we’re doing. You don’t believe in what we’re doing.”

And so he excused me promptly because it was ruining the whole thing by him not being able to get me to want to commit to it. Now, as I sit here today, I’m not sure I’m a believer in hypnotism, but it does reflect your comment about I wasn’t committed to it. I didn’t believe in that, at least deep enough. I didn’t believe in it to allow it to happen. Does that make sense to you, Michael?

Michael Canic: Absolutely. And it’s easy to fool ourselves, because we want to be committed. We think we’re committed. But the moments of truth are often the uncomfortable thing. So here’s an example. Holding people accountable is something many organizations struggle with. And we say we’re committed, but when it comes to holding people accountable, constructively accountable, we avoid it, we put it off, it’s uncomfortable, it’s confrontation. Maybe it’ll get better on its own. We come up with rationalizations. That’s a good example.

But if we realize no, to be successful, we need to hold people constructively accountable. And I’m just picking on accountability, now. There’s a lot of other things we need to do to reinforce people, and support, and train them, and develop them. But accountability, if we’re not willing to do that, we’re sending a mixed message, Ray, about our commitment. People pick up on, “Oh, I guess this is optional. I guess the leader really isn’t committed.” That’s why we have to be so consistent. And commitment is reflected in what I call ruthless consistency.

Ray Zinn: Even though I got my masters, 50 something years ago. I was taught that leaders get things done through people. In other words, if you can’t get things done through people, you’re not really a leader. You may have the title like CEO, or vice president, or some other fancy title that makes you sound important. But if you can’t get things done through people, are you really a leader? So can you address that Michael?

Michael Canic: 100% right. In my view, and I emphasize this with clients all the time, it’s not about you, it’s through you, right? You are only a vehicle. And if you do the things that you should do as a leader, that enables your people to perform at their best. And when people perform at their best in the right direction, with the right goals, the right objectives, that’s when success happens.

So leaders are great enablers. They create the right environment to be successful. So 100% agree, it really is. I think… John Maxwell, of course the prolific leadership writer wrote, “If you say you’re leading, but no one is following, then you’re really just going for a walk.” And that’s what we have to keep in mind.

Ray Zinn: Exactly. Exactly, and I think it’s important for our listeners to understand that you may be committed in your mind, but if you’re people that follow you are not committed, you’re again, you’re just going for a walk, and by yourself.

Michael Canic: Exactly.

Ray Zinn: So help us understand, Michael, how we can get people to follow us. Maybe you could share some guidelines, or some ideas that you’ve come across that can help our listeners understand how they can get people to follow us.

Michael Canic: Sure, in my model, Ray, it’s really creating the right environment, which is made up of five things. Have we oriented people, have we equipped them, have we coached them, have we supported them, and have we valued them as individuals? So let me just touch on each of those.

When I mean orient them, I mean orienting their heads and hearts in the right direction. Everybody today talks about purpose. Yes, very important. But have we linked purpose to goals and expectations? We have to connect the dots for them. It’s one thing to say we have this high level purpose as an organization, but do people see how that translates into goals and what we expect of them?

Orienting them also means taking away the disincentives that would keep good people from changing. The number one disincentive that keeps people from changing is fear. Fear of the unknown. So as leaders, we have to make sure we overcommunicate during times of change to remove that fear of the unknown. Letting people know what we want to accomplish, how, and importantly why. And if we can overcommunicate with them, take away that fear of the unknown, we overcome that disincentive.

So number one, we’ve got to orient hearts and heads.

Ray Zinn: Yeah, and go ahead. Yeah, I interrupted you. Go ahead.

Michael Canic: That’s all right. And number two, and I’ll just talk through each of these quickly here, but number two, in terms of equipping people, we have to make sure they have the knowledge, skills, resources, and authority to succeed, and not endless amounts, but sufficient amounts.

For example, one of the things we often do, we say, “Well, we don’t a lot of resources do the best with what you have.’ Well, the message we’re unwittingly sending, Ray, is that it’s not that important. Better to do fewer things but, sufficiently resource them so people feel they’re being set up to succeed, not set up to fail.

Number three, are we coaching them instead of just managing them? And the big difference here, Ray, is that coaches take responsibility for the performance of their people. Coaches to ask themselves, “What do I need to do to enable my people to perform at their best? How do I create the right environment? What buttons do I need to push? What levers do I need to pull to give them a fighting chance to succeed?” Coaches take responsibility.

Number four, as an organization, do we support them? Have we aligned processes and policies And our structure? Do we have the right infrastructure, again so they can and be successful?

And number five, and this is critical, do we value them as individuals? Because I can tell you, Ray, as somebody who’s, my wife and I have traveled over 40 countries. It’s a passion of ours, just discovering different cultures and countries. One of the things I’ve discovered, is that there are universals, and that is everyone wants to respected, everyone wants to feel trusted, and everyone wants to feel cared about as an individual. If we as leaders can truly value people, that will energize them, and again, help them perform at their best.

So quickly, the five things we need to do to create the right environment. We have to orient people, we have to equip them, we have to coach them, support them, and value them as individuals.

Ray Zinn: Perfect. You know, and I was taught that there’s a difference between ministering and administering. So ministering is where they feel your love, your compassion, your willingness to help. Administering is when you’re dictating you’re directing, and you’re more of checking the boxes as you would. And your employees know that, when you’re ministering to them or when you’re administering to them. They sound similar. But they’re not the same are they Michael?

Michael Canic: No, no, that’s a very good point. And you said people can pick up on it. People are bloodhounds for mixed messages, for inconsistency, for do you care about them, or not care about them. People pick this up. So as leaders, we have to recognize we are on stage 24/7, and the messages we send intentionally and not are being perceived by our people. So we have a great responsibility to make sure we’re very consistent in sending clear messages aligned with our values, aligned with our direction, aligned with winning.

Ray Zinn: It’s important that people understand what your motives are, in other words, where is your head? And are you being honest, or are you just doing your job? And so honesty and integrity is something so important. And of course you mentioned about respecting every individual because they want to feel valued. So you mentioned also to me that something about anything we do is everything we do. So what’s that all about?

Michael Canic: Well, yeah, what’s more important than anything we do then is everything we do, meaning any single mixed message can undermine our efforts. So let me give you a few examples. If we communicate with our people our intentions and we train them, but let’s say we don’t give them the authority to apply that training, then they feel powerless.

If we on the other hand communicate with them, but don’t give them sufficient resources, that one thing alone can undermine everything. If we spout our values, “Here’s what’s important”, but we don’t hold people accountable for violating the values, again, we’re sending a mixed message. So all to say that you could do a hundred things right, but do they remember the 99 times you’re honest, or the one time you are dishonest?

Any single thing misaligned can undermine everything. Again, that’s why as leaders, we have to be very consistent, and very aware that we’re sending messages continually.

Ray Zinn: What’s interesting is that we use this word, hold them accountable, hold them accountable, and so holding them accountable is more than just saying, “Hey, you did this wrong”, or, “We need you to apologize”, or whatever. So I think this “holding them accountable” is a overly used a phrase. So how do we truly, honestly, hold people accountable? How do we do that, Michael?

Michael Canic: Right, the number one thing I would say to your listeners, Ray, is whenever you think of the term accountability, put the word constructive in front of it. Constructive accountability. And that changes your mindset to one of accountability, like, “You were wrong, you were bad, you didn’t perform”, negative, to how do we help people improve?

Because really the reason we hold people accountable, the right reason, is to help them improve, help them get better. It is intended to be a constructive purpose. So again, thinking we are coaches, we’re not just managers. If as coaches, we think, “Okay, what do we need to do to help get better performance? What do I need to do to enable the person? What leavers do I need to pull? And then what do I expect of them? What’s required of them?”

Part of this is just a mindset about accountability being negative. I think we need to think in terms of constructive accountability.

Ray Zinn: Well it’s just interesting and I’m glad you headed me down this direction that when you hold someone accountable, it’s got to start with yourself. In other words, if they work for you and they’re performing one of your responsible areas, then you have to hold yourself accountable, because accountability doesn’t start with the person who you’re directing. Accountability starts with you as the individual leading the organization. Is that correct?

Michael Canic: Absolutely. And again, you have to look in the mirror. The story that comes to mind here is many years ago, a guy named Bill Walsh who coached the San Francisco 49ers ultimately to, I think it was three or four Superbowl wins. Before they had won their first super bowl. I think it was the previous year, and they lost in the playoffs. He came into the dressing room at the end of the game, all the players, face him and they had performed very poorly. They were thinking he was going to chew them out. What he said to them was “Fellows, what I need to do is go back and look at how I can be a better coach and help prepare you better for these kinds of games.”

He first took responsibility, he looked in the mirror, he held himself accountable, and when you as a leader do that, that not only sends a very strong message to your people, but it also is more likely to encourage them to hold themselves accountable.

Ray Zinn: I call this looking in the mirror rather than around the mirror.

Michael Canic: That’s very good.

Ray Zinn: And so that’s the term I use. So when we look in the mirror, then we take responsibility, even for the failings and the frailties of our organization. When we look around the mirror, we’re pointing at them, we’re pointing at someone else other than ourselves. And so when we hold our organization accountable, it’s got to start with ourselves as the leader. And again, on this podcast we’re talking about the leaders. And so those of you who are listening to this, who have a responsibility for leading your organization, when you say holding someone accountable, look in the mirror, not around the mirror. And who do you see? You see the problem. Yes, it’s you. So the more successful you are, the more successful will be your organization.

Michael Canic: Exactly right. Yeah. And it all comes down, in my world, it all comes down to committed leaders, committed leaders. If a leader is truly committed, they will develop the focus, they will get the right team, they will create the right environment, and they will work to improve themselves and surround themselves with good people if they are lacking in capabilities.

But it really comes down to commitment, and we see stories like this all the time, again, whether it’s in business, in sports, in entertainment, whatever. Those with that real deep commitment find a way to make it work.

Ray Zinn: And the example you used of Bill Walsh and him taking responsibility for his team as opposed to just blaming them as players is a good one. I was going to ask you for a story but you came up with one, which was this one about Coach Bill Walsh. So anyway, do you have any questions for me, by chance, Michael?

Michael Canic: Yeah, one thing that comes to mind, Ray, you’ve got a tremendous background and really clear from your past that you were shaped by your upbringing in terms of work ethic and discipline and some very admirable traits. I guess my question is for people who haven’t benefited from that kind of early life experience, and I had a similar experience in terms of work ethic and discipline, but for those who haven’t benefited from that early life experience, how have you seen people develop those traits?

Ray Zinn: It’s again, they have to be committed. They have to be willing to look in the mirror rather than around the mirror. And so that, that’s what I think is the key is whether you have been brought up and had the exposure to accepting responsibility as a young person, or whether you’ve taken on this leadership role later on in life.

It’s a matter of commitment, as you pointed out earlier in our podcast that if that person is committed, and if they’re willing to, to listen, and so we have two ears and one mouth for a reason. And we should use them proportionally. We need to listen more rather than just talk, because we can’t listen while we’re talking. And so if they’re willing to seek out a good mentor, and I think that’s another key of a person willing to learn, is they want to get a mentor.

Maybe they’ll find somebody that’s been down that road before, and people who say, ‘Well, I don’t need anybody telling me how to do it then”, then they’re not going to be the committed a leader that you need them to be. So, seek a good mentor is another suggestion that I would have, Michael.

Michael Canic: Very good. Yep. No, I agree. We can’t do it on our own, and whether it’s a peer advisory group, whether it’s a mentor, or it’s a coach, and there are lots of resources available there, online and otherwise, yeah, find the tools, find the resources to help make you a stronger leader.

Ray Zinn: Yes sir. So any other thoughts or are you just about it?

Michael Canic: Well, that’s great. I know it’s a lot in a short time. Yeah. I would just say if your listeners are interested more on our website, makingstrategyhappen.com, I have over 400 blog posts. There are lots of downloadable tools, models, resources, a lot of things that people can access to help them on this journey. And I would just leave people with the idea that ruthless consistency, the more you can be committed, and the more that’s reflected in a ruthless consistency in your decisions and your actions, then the more likely you are to enable your team to be successful.

Ray Zinn: Oh, I love it. Ruthless consistency. Ruthless. Oh boy, that has a strong connotation to it. So once again, what is that website?

Michael Canic: makingstrategyhappen.com.

Ray Zinn: makingstrategyhappen.com. Okay. So those of you who want to learn more about committed leadership and developing the right kind of habits with a ruthless commitment, then please go to Michael’s website. So again, thank you so much Michael for joining us today. I appreciate it, the time you spent here with me today.

I hope that our listeners get a big learning session out of this. And again, appreciate the time you spent. So with that, please come visit our website, toughthingsfirst.com. Get my book, “Tough Things First.” You can get at any a book retailer. This, again, we’re willing to take your questions online. If you have questions or thoughts, please don’t hesitate to send me an email or Michael at his website. Again, I sure appreciate you being with me today, Michael.

Michael Canic: Fantastic. It’s been a great pleasure. Thank you, Ray.

Ray Zinn: See you later everybody.

Nearly every startup pivots.

In this Tough Things First podcast episode, Ray Zinn chats with Shariq Shah, one of Ray’s ZinnStarter fellows, to discuss how they are pivoting, why it is important, and why entrepreneurs should plan on pivoting.

Ray Zinn: Hello everyone. Welcome to another fabulous podcast of toughthingsfirst.com. Really grateful today to have Shariq Shah with me. Shariq was a student at San Jose State University, was a Zinn fellow, part of our ZinnStarter program, and I’ll explain a little bit about that. But first, let me welcome Shariq. How are you doing, Shariq?

Shariq Shah: Thank you, Ray. It’s a pleasure to be here.

Ray Zinn: Yeah, it’s great to have you, too. So I got to know a Shariq on a personal level as he developed his little company called Ambii. So it’s really neat to see how much progress he’s had. So what ZinnStarter is, it’s a program for universities, kind of like Kickstarter for universities. It includes that both academic and some hands-on effort of developing a company. I also help fund ZinnStarter at the various universities that we host. It’s a great little program, you can read more about it on our website, Tough Things First. You can look up more about ZinnStarter if you’d like. Anyway, it’s a good program for students. Just briefly, Shariq, how did you find ZinnStarter’s help?

Shariq Shah: So, ZinnStarter was probably one of the things that enabled me to continue my company outside of school. I just graduated a little while ago and turned down job offers because I decided, “Hey, I have this amazing opportunity. I’m going to take it.” And ZinnStarter and the program surrounding it was the thing that allowed me to take the first step into the world of entrepreneurship. Otherwise, right now I would have probably become just a programmer.

Ray Zinn: Nothing wrong with that, however.

Shariq Shah: Nothing wrong with that.

Ray Zinn: No, but you wanted to be an entrepreneur and ZinnStarter gave you that opportunity to develop your company while you were yet in school. And that’s kind of what ZinnStarter is all about. Let’s go into it, Shariq. Where are you? How can I help? Let’s talk about where you are with Ambii and what help you need.

Shariq Shah: Sure. So to begin with, we were a platform that allowed groups of people to enjoy music together. That’s the concept that I worked on all throughout the ZinnStarter program. And as we evolved, we solved more and more problems, I started understanding more of the music industry and more of the problems that surround it. And as time moves forward, we launch our initial consumer platform and I see an opportunity, a better opportunity for me to solve a much more tangible problem. And that problem is that 83% of businesses as of right now illegally play unlicensed music in their business establishments. And they are risking over $300,000 of fines and essentially they’re stealing $2 billion from the labels and the artists. When you tell them that, “Hey, you’re doing something illegal,” half of them don’t know what they’re doing, and then once you do tell them, most of them don’t want to pay. (more…)

The give and take required for successful negotiation stymies the stubborn.

In this Tough Things First podcast, Ray Zinn and guest host Rob Artigo discuss fundamentals of negotiating and how to be successful even when you aren’t getting everything you want.

Rob Artigo: Welcome back everyone to another edition of the Tough Things First podcast. I’m your guest host, Rob Artigo, I’m a writer and entrepreneur in California. Hi Ray.

Ray Zinn: Hey Rob. So good to be with you this morning.

Rob Artigo: I have a good question here and I think lots of people will be able to relate to it because we’ve been hearing a lot about the idea of negotiating on a national level. Donald Trump, as you know, penned a famous book called The Art of the Deal and it has been discussed a lot frequently because of the context of the negotiations with Congress to get border wall funding. Some have said that there are failures built into this that show that Donald Trump isn’t such a great negotiator after all, so as an outside observer Ray, would you agree with that? I mean just based on what you’ve seen?

Ray Zinn: I think negotiations are really a tough subject and it depends again what we’re negotiating on and how important it is to a particular individual. If for example you’re negotiating with your spouse about where you are gonna go to eat and you don’t care, then it’s not a very difficult task but if where you go to eat is extremely important and depending upon the setting and depending upon the cost, depending upon the kind of cuisine, it can be kinda heated and debated. It’s not something as simple. When we talk about negotiating, we don’t necessarily put it all in one bucket. It all depends again upon the motivation of the individuals.

In the case of President Trump and negotiating with regard to whether we do a government shutdown or whether they fund his border wall is a matter of principle and so if the one side says, “We don’t want him to have that little feather in his cap that says that he got that border wall built,” then they’re gonna resist and they’re willing to throw the baby into the fire to prove their point. Then of course President Trump on the other hand is gonna stand rigid and say, “Hey, you want to put all these people out of work? You guys go right ahead.” It depends upon what each side feels they have to lose.

Rob Artigo: Ray, isn’t it like the idea of the stakes are different, and I love this idea of talking about Congress and the president negotiating over the wall because metaphorically you could really place this on top of other issues, whether it’s business or personal like you said, even just deciding with your wife what place you’re gonna go eat, but the idea of stakes and what struck me there, what you were just saying is that in the context of this negotiation, you may find one side, the stakes aren’t the wall for both sides. The stake for Congress appears to be whether or not Donald Trump gets a “victory” and gets what he wants so if they’re trying to avoid that, if they’re trying to avoid Donald Trump getting a “victory” here, then that’s different than Donald Trump’s intent. His goal, the stakes for him is he wants to get the border wall done.

Ray Zinn: I mean, it’s a matter of victory again. He’s promised his constituents that he would build a wall during his administration. It’s a victory for him and it’s a victory for the other side if they can prevent him from doing it because they’re showing their power. Let’s see who’s really got the power and so it’s all about fighting. A negotiation is somewhat of a fight. If there’s no contest, then there’s no fight. If there’s a point to be made, then all hands on deck, they’re gonna try to make their point. Let’s be factual about this, the Congress does not love the president at all, at least the current Congress does not love president, and the president really doesn’t care for them either. He wants to drain the swamp, calling them swamp monsters is not going to sit well with them. When you go into negotiation, if both sides hate each other, negotiations aren’t gonna go very well.

The first thing that we have to think about when we’re negotiating is what kind of … Where do we stand with regard to the individuals we’re negotiating with? Whether it be a teacher strike or whether it be a particular direction we want to head the company, if there’s a team effort, in other words, if we’re trying to negotiate the best outcome and the team basically like each other, then negotiations go relatively smooth. There’s compromises that will have to be made, but it will be a rather smooth transition whereas if there’s animosity and if there’s hard feelings, negotiating is not gonna go well, period. The best way if there is animosity, if there is hard feelings between two parties or multiple parties, then what we have to do is figure out what kind of compromise can be made where both parties walk away smiling. In other words, there’s give and take.

I think we saw a little bit of this recently when the bill was put before the president to sign that Congress passed, Congress and the Senate passed for overcoming the government shutdown and then they gave him 1.4 billion for the wall. They didn’t give him much for the wall, but they avoided a government shutdown, another government shutdown. That was a compromise, so if you remember, the Democrats or Nancy Pelosi said we’re not gonna even give him a dollar. They gave him more than a dollar, they gave him 1.4 billion dollars. He got something, he just didn’t get what he wanted so they declared the victory, the Congress says, “Okay, we were victorious because he didn’t get what he wanted, he didn’t get five point whatever billion for his wall,” and we also avoided a government shutdown. Trump says, “Well, they gave me more than a dollar,” and so he declared victory and avoided a government shutdown.

That’s kind of the way compromises are done. Both parties take a victory lap and smile. They may not get exactly what they want but in any negotiation, I don’t know if anybody gets exactly what they want, whether you’re buying a car or whether you’re buying a home or you’re sitting on negotiating a price and both sides are trying to get the best deal for them. You’re never going to get everything you want. When you go into negotiation, the first thing you must ask yourself is where do I draw the line? In other words, how far am I willing to go and we all do that. We all say I’m not gonna pay any more than this or I’m not gonna accept any more than that and so they’ve already set their bottom line and then they try to work towards something where both of them end up not having to cross their bottom line.

That’s the key to negotiating. You go in with the idea of a resolution. If you’re going into a negotiation [inaudible 00:08:59] we don’t want a resolution, then just walk away. Just don’t even go any further. If a resolution is being sought, a true resolution is being sought, and your bottom line, you’ve accepted, in the instance here of President Trump, he said, “I’m gonna get more than a dollar.” That’s kinda what he told himself. “If I can’t get more than a dollar, we’re gonna shut the government down.” The other side says, “Well, as long as we don’t fund anything anybody could say was an appreciable amount of what Donald Trump is asking for, then we can take a victory lap because we avoided a government shutdown and at least he didn’t get all of his money to do what he wants.” They changed the name from wall to fence and some other ridiculous things, and that’s how stupid negotiations actually get sometimes. They actually get that way, where people act stupid and silly. That’s unfortunately the way compromise works sometimes is that you make silly compromises.

Rob Artigo: I guess from what I’m hearing you say and then the example of Congress and the president is that it was important, it was more important to break the logjam or the impasse that they were facing than to get the perfect deal on either side.

Ray Zinn: They were avoiding a government shutdown is what they were avoiding. They said, “Okay, what can we do to avoid a government shutdown? Well, we gotta give Donald Trump more than a dollar,” and Donald Trump says, “I’ve gotta get enough to say that I can at least build something of a wall, 58 miles,” and so that’s what they did. In the back of his pocket, he’s been saying this for some time, that he’s just gonna invoke a presidential … Make a presidential decision and declare an emergency. He always had in the back of his pocket and he knew he wasn’t gonna get five plus billion because the other side would have lost. In other words, they would not have been able to take a victory lap. He’s been gearing up to do this emergency declaration. That’s kinda what’s happened and that’s what we do in negotiating. We make compromises and move forward.

Rob Artigo: As always, you can reach out to Ray Zinn with your questions at ToughThingsFirst.com. Continue your education in this conversation with all the podcasts, Ray’s blogs, links to the information about the book Tough Things First and Ray’s new book, The Zen of Zinn, a collection of writings on interrelated topics of entrepreneurship, leadership, management, discipline, determination, society, people, and life, that’s The Zen of Zinn. Thanks again Ray.

Ray Zinn: Hey thanks Rob. It’s always fun to talk with you.

Managers today might lead teams with Baby Boomers and Generation-Z members. How does a good manager lead such a diverse set of employees?

Guy Smith: Hello and welcome again to another episode of the Tough Things First podcast, a weekly dive into management leadership and a bit of Silicon Valley as well. I’m your host this week, Guy Smith, and I’m going to dive into a topic here that I personally find fascinating. This may not have happened before in our society, but we’re at a point where we have four different generations active in the workforce right now, the Baby Boomers, Generation X, the Millennials, and Generation Z is just now entering the workforce.

In Silicon Valley, we’ve got an eclectic mix of young turks and gray beards, so Silicon Valley is a good place to kind of think about how you lead such radically different people, and who better than to ask than the longest-serving CEO in Silicon Valley. That’s of course Mr. Ray Zinn, and how are you today, Ray?

Ray Zinn: Well good, Guy. I’m trying to get over a cold, but we’re managing our way through it. This is an interesting topic that you’ve got today. So let’s kind of dive right into it.

Guy Smith: Yeah, I’m really fascinated by this because from a leadership standpoint, from an organizational policy standpoint, there are a lot of different parts of the fabric that are tugging against each other. So let’s start with the extremes. The Baby Boomers are on end and we’ll stop with the Millennials at the other end for the time being. For me, contrast the motivational differences you see between Boomers and Millennials. What is it that they respond to differently in an organizational setting?

Ray Zinn: Well one advantage that I have of course is that I’ve been able to span at least three of those generations. I don’t know if you consider me a Baby Boomers but I did come out of the second world war where I was just a youth. And my grandparents, which would be in the pre-first world war, they had a different environment they were in. Horse and buggy was still the fare, as you would. Cars were just coming into being. The way people traveled, the way they moved together as families, was entirely different than it was for me when I grew up. I grew up, basically our families were all kind of together and we didn’t move anywhere. I mean, we stayed in the same spot. So our cultural differences were minimal and there wasn’t the huge immigration issue that we face today, with a more diverse society. (more…)

How should entrepreneurs make decisions? Ray Zinn, the epitome of Silicon Valley entrepreneurship discusses the rigors of starts decisions.

Guy Smith: Hello again, and welcome to another episode of the Tough Things First podcast, where we engage Ray Zinn, the longest serving CEO in Silicon Valley. And we talk about entrepreneurship, leadership, executive management, and a little bit about society and how we all get along in life.

But today we’re going to have, I think one of the more interesting topics for my mind, and that’s the art of decision making for entrepreneurs. Because in my time in Silicon Valley, and nurturing a lot of startups myself, I have seen entrepreneurs absolutely lock their brains in trying to make some fundamental decisions and Ray, he doesn’t seem to have a lot of problems with making quality decisions quickly. So, we’re going to figure out how he does it.

So Good Morning Ray. Welcome again. Thank you so much for taking time with us.

Ray Zinn: Well, thank you guys. Good to be back with you today.

Guy Smith: An entrepreneur or somebody launching their own business, they have to make thousands of decisions. I mean, that’s pretty much their job is to make a lot of decisions, make them quickly, make them with a certain amount of quality. And yet a lot of guys and a lot of women, they kind of freeze up, especially on some of the big decisions. What is it that causes people to freeze, and not make the decisions that they need to make?

Ray Zinn: Well, Tom Peters in his book, In the Pursuit of Excellence, talks about ready, aim, aim, aim, aim, aim, and never fire. What we need to do, as Tom says in his book, is ready, fire, aim. That seems kind of counterintuitive, but back in the days when we had the battleships and destroyers, they would fire for effect. In other words, you would shoot a round off and see where it went, high or low. (more…)

There is no time like the holidays when employees and management alike tend to think about anything but work. In this Tough Things First podcast, Ray Zinn is quizzed on dealing with employee seasonal distractions. The give and take of making it through the holiday hump.

Rob Artigo: Rob Artigo here, your guest host for another edition of the Tough Things First podcast with Ray Zinn. I’m a writer and entrepreneur in California. Well, being invited back is always a pleasure, Ray. How you doing?

Ray Zinn: I’m doing fine. I hope you’re enjoying your day today. And it’s always good to have you, Rob.

Rob Artigo: I found a column on US News and World Report online. It was actually a column that was originally published by Associated Press and picked up by the paper. So this is the way it goes. “The holiday season can be a motivation and productivity killer at some small businesses,” it says. “Staffers may spend time chatting or shopping online, ask to leave early for children’s holiday events, or just not be in the mood to work.”

It also says, “The companies with the most holiday problems are likely to be the ones where November and December aren’t a particularly busy period,” and so we’re not talking about that retailers, and the restaurants, and the caterers, and other companies like that where staffers understand when they’re hired that this is a prime time for the type of work they’re going to be doing.

At any company though, if employees are distracted, the owners of course find it, it’s difficult to be flexible with the employees when you got to accommodate everything. I suppose, Ray, in your many years of experience, 37 years at Micrel, that you had to deal with, well if it was 37 years, it was likely to have been something like 37 Christmas/holiday cycles. So you’ve dealt with this a lot. Is this something, in your experience, that has been a problem historically?

Ray Zinn: Well, it’s only been a problem, I think, in the last 20 some years. That wasn’t really a problem before that, but in the last 20 something years, it has become more of a problem, especially as people expect more and they expect, by the way, to have time off during the holidays. It used to be the employee worked around the problem and now they’re expecting the employer to work around the problem. (more…)

Any challenge you face that can take years, with hours upon hours of thought and work, can seem like an insurmountable challenge. In his latest podcast, Ray Zinn talks about writing books, and how met the challenges by doing the Tough Things First.

Rob Artigo: I’m Rob Artigo, back again, your guest host for another edition of Tough Things First, with Ray Zinn. I’m a writer and entrepreneur. Being invited back is always a pleasure, Ray.

Ray Zinn: It’s always, good to have you, Rob. You’re always so energetic and enthusiastic.

Rob Artigo: Congratulations on the new book, The Zen of Zinn.

Ray Zinn: Thank you.

Rob Artigo: In short, I don’t want to say Reader’s Digest version, but here briefly, a little bit about what the readers will get where they pick up a copy of The Zen of Zinn.

Ray Zinn: The Zen of Zinn is a collection of thoughts that I have written over the years, going back to when I started my coral. I just would have these thoughts, these motivational thoughts that I would give my staff and the operations people, just food for thought as they say, you know, Chicken Soup For The Soul. That’s what the compilation is, these little snippets, very short little blurbs on many, many, many subjects. That’s what The Zen Of Zinn’s about. (more…)