Interview with Wim Roelandts, CEO of Xilinx

Patrick E. Murphy, Director of the Institute for Ethical Business Worldwide, sat down with Xilinx CEO

Wim Roelandts in the spring of 2003 to discuss his philosophy of leadership and creating a culture of ethical decision making.

Interview transcript:

PEM: What is your philosophy of management?

 

My philosophy is based on my experience at Hewlett-Packard for 30 years.   I am European born from Belgium and worked in France for HP so I would describe my philosophy as European/International/HP - a blend of all three.   I believe that what drives people is the value of loyalty and this was a strong value at HP until I left in 1996.   My goal here is to do an HP+; that is, to bring all the good things from HP without the negative ones.

PEM: How would you describe Xilinix's corporate culture?

We have a very people-oriented culture here.   We try to balance the interests of many stakeholders - employees, shareholders and customers, for example.   And we tend to take a longer-term view of our business rather than be too affected by the day-to-day tosses and turns of the stock market.   One of my passions is reading books about history and I learn a lot about corporate culture from them.   This also helps me understand the historical point of view and try to keep from making the mistakes of others.   One recent book that I've read that I would recommend is Leading on the Edge .   It describes an expedition to the South Pole and it also includes management lessons at the end of each chapter.   I have given a copy to my staff.   I am certainly not a believer in management fad books.   My experience is that corporate culture is complex and you can't cure it with the latest theory.   Among my favorite gurus are Peter Drucker and Barry Posner.   I am also a regular reader of the Harvard Business Review .  

 

PEM:   You described that you were trying to include the best points from the HP culture without the negative ones.   What are some of the things that you are doing differently?

 

HP was very people focused and consensus driven.   The down side of that was that it took the longest time to make decisions because more ideas were constantly solicited from everybody; everyone had to agree.   My philosophy is "democratic decision making" that means that everyone is involved in idea generation, but then I believe in "dictatorial execution;" when it's time to make a final decision the management team will do it.   It is important that once decisions are made that I get feedback.   A second difference is insisting on personal accountability.   When a project is ongoing at Xilinx we come up with a date for completion and do not let it slip.   The people involved in the team are then held personally accountable for making and meeting the deadline.   A third difference:   at Xilinx we want to have an innovative culture.   Therefore, we must not punish failure.   We emphasize that failure is part of the job and we can always learn from failure.

 

PEM:   What is the major challenge that Xilinx is facing at the current time?

 

From the business side, the bubble has definitely burst and after this current recession we will not return to the spend-free environment of the dotcom craze.   Customers and business people now are much more cost cautious and worried about investing in real advances in technology and things like inventory.   I am worried about   the U.S. and its ability to compete with the Far East , China , India , and those countries.   My view is that stock options in the high tech industry are ways that help us get the best people to work here.   Options help people feel like owners and result in innovation and creativity, but there is a downside as well - it is painful when the stock goes down.

 

PEM:   What are the major principles of management that you follow?

 

The first is ownership.   My feeling is that stock options are not primarily about money. Rather, everyone who gets stock options behaves and feels more like an owner in the company.   I think it is truly a key way to reward people and make them feel connected to the company.   It is a lesson I learned from my Dad who both owned his own small business and worked for a large enterprise as well.   I learned that if you want people to behave as employees then you treat them one way.   If you want them to behave as owners then you treat them another way.   A way to convince people to take a salary cut, which we have done, is to have them think of themselves as owners.   People at Xilinx care about the company and their rationale for doing their best is that they know innovation and technology and bringing things quickly to market will create breakthroughs and business opportunities that they will share in.   Stock options have been misused but the important thing is how they are employed.   My belief is that employees should not work eighty-hour weeks and burn out for the company.   We do not think it is good for employees or for Xilinx. They are expected to get their work done during regular business hours or whenever they choose.

 

My second principle is that people should be engaged in work that interests them.   Employees get personal benefits from doing interesting work and tend to do their best when they are engaged.   One example is the administrative assistants at Xilinx.   They are extremely motivated and are encouraged to come together regularly.   A couple of years ago they were involved in a best practices exercise.   They looked at their jobs and they asked how could they get out of doing boring work like distributing payroll slips.   The solution they came up with then was sending them by e-mail and now they are distributing payroll slips electronically.   One project that the administrative assistants took leadership on is setting up web pages for their area.   They are creating meaning and value by doing this and they seem to be highly motivated by it.

 

Another important aspect of having meaningful work is it tends to instill a strong sense of community.   The point I made about the cost of failure before relates to this idea.   If the cost is low and people feel free to take risks then people are more likely to support creative new ideas and help execute them.   This results in a supportive environment.   I now do not use the word "teamwork" that much.   We have expanded the concept to a much broader context than just workers and teams.   The community aspect is a bigger idea and has a more supportive connotation.   For example, we help out families and are interested in their private lives to the extent that they share problems with us.   We have been involved in teaching in schools in this area and have developed a children's center.   People feel strongly about some of these issues and they encourage one another.

 

A fourth principle of management is rather simple. That is "everybody has to improve."   They need to be better tomorrow then they are today.   That is, they should continuously move forward.   One way we encourage this is with job rotation.   Generally speaking, we take an optimistic view towards how people view their work and the emphasis on self-improvement.   This leads to the next point.

 

I subscribe to the "Theory Y" philosophy of management; that people want to do a good job, are motivated to do so and, if you give them the right tools and support, they will do a good job.   Being managed by objectives is important and supporting each other is also an important aspect of working together.   I believe in being very optimistic about people's motives and that is part and parcel of   the basic tenets of Theory Y.

 

PEM:   How would you describe your role as CEO at Xilinx?

 

I look at it in several ways.   First, the CEO has to be a champion and talk continuously about the things that are important to him and the firm.   He or she must also set an example and "walk the talk."   Regarding our values at Xilinx, these can be rather abstract.   So I tend to use examples.   The values are the glue that keep people together in the organization. They are the underpinnings of good communication.   I try to find specific examples of people living the values and use those in my discussions and communication with employees to bring the values home to each employee.

 

Second, the most important failure of CEO's takes place when a gap between what they say and what they do takes place.   I call it the "credibility gap."   As CEO, I can never promise lifetime employment or guarantee that certain things will happen.   However, I have made a strong policy to run the company so that layoffs are a last resort.   If there is a credibility gap, it is caused by management promising too much.   This can create mistrust on the part of the employees.   What makes a CEO successful is trust and emphasizing trust throughout the organization.   If we want to demand sacrifices from people, they must trust the management of the company.   Our business declined fifty percent during the recent, bleak times we have just gone through and the way we have been able to go forward is with this high level of trust at Xilinx.  

 

Third, I think this concept of continuously improving management is critical.   I meet with the other top managers regularly and we talk about managing in tough times.   That way, management is trained beforehand.   We discuss the fact that trust can disappear if we lack integrity or if we are not competent.   It is important that management do its homework and provide answers to questions that employees have of them.  

 

PEM:   What about the scandals of the last year where CEO's have been implicated in some rather serious misdeeds at organizations like Enron, WorldCom, etc?

 

I believe we have a few bad apples or a few crooks and one thing that has caused a problem is the amount of stock options that some CEO's receive.   We found out later that a lot of these companies were involved in "financial engineering."   The attitude in the United States , unfortunately, is to follow the letter of the law and not concentrate on thinking ethically or concentrating on ethical behavior. This is where off balance sheet accounting and other issues can happen.    My biggest disappointment is that these people knew what was right but they ignored what they knew and did the wrong thing.   The pressure to give in or the pressure to meet the numbers is too strong.   I am Flemish and stubborn.   I would not bow to the pressure to conform to activities that are wrong, primarily because of my background.

 

Another issue or problem is the elevation of the CEO as a "heroic figure."   Too many people surrounding CEO's are telling these individuals what a good job they are doing.   They get a lot of publicity and strokes.   I instruct my public relations people that I do not want my picture on the cover of any magazine.   It is a "slippery slope."   The success of the company does not depend on one person, certainly not the CEO as hero.   It is not the right thing to do especially when employees are the reason for the success of a company and the company is certainly dependent on many individuals, not just the CEO.

 

PEM:   Thank you very much for your insights, Wim.   I look forward to our next conversation.