I recently had a chance to talk with Ray Stata, founder and chairman of Analog Devices, at a reception celebrating ADI's 40th anniversary. Forty years is quite an accomplishment now that tech companies seem to rise and fall at fiber-optic speed.
The celebration was held in the classy Ray Stata Technology Center on Analog Devices' campus in Wilmington, Mass., where Stata discussed ADI's origins "across the street in a shack." What a feeling it must be to go from a shack to the eponymous lobby of a Fortune 1000 company, with 9000 employees in 30 countries, accumulating $2.6 billion in annual revenue!
Much of the key to ADI's success was reflected in the makeup of the reception's invitees: the company's long-term employees. (ADI has more than 1000 employees with 20 years tenure.) I visited with some of the company's veteran engineers, those who have happily built careers at ADI.
In an era where many engineers feel that electronics designers no longer get the respect they deserve, Stata built ADI around a philosophy of empowerment for the engineer. He cites recognition for EEs and their innovations as one of the fundamentals of the company's success, coupled with a goal to achieve leadership in, as he puts it, "whatever we do."
PARALLEL CAREER LADDER
To create a nourishing culture for engineers, Stata says, ADI initiated a parallel technology career ladder commensurate with a managerial track. It lets engineers say what they think without being shut down.
"It has been very important to our success. We listen very carefully to our engineers," Stata says. ADI employs more than 3000 engineers, collectively holding 935 patents with 569 patents pending.
Stata believes that in taking care of the three core constituencies—employees, stockholders, and customers—the employees come first. "If they are excited and happy in their work, they will create the right products for customers and, in turn, build value for shareholders," he says.
Of course, over the years, Stata's been proven right many times over. ADI has reached a market cap of some $14 billion based on a succession of successful innovations—first in operational amplifiers, followed by data converters and DSPs, and on to cellular chip sets, MEMS-based acceleration sensors, video compression, and other innovations.
"We have to consider: Where are the innovators, and how can we attract and retain them?" he says. Employees, he adds, are looking for security, recognition, and a chance for accomplishment. They need a chance to grow, develop, and work with people they can learn from.
Stata has worked to create a culture that would make these innovators feel "what they think is important" and to create a corporate culture of mentoring and teamwork where technologists "are partners, not subordinates." Protecting that culture becomes "harder as you get larger," says Stata.
So, there was a need to institutionalize certain aspects. For example, the company created a "fellows" program (the first ADI Fellow was Barry Gilbert, one of Electronic Design's Engineering Hall of Fame inductees), the top honor for technologists in the company. ADI Fellows, Stata says, play a top role in the company.
With some 60,000 customers, ADI also has worked to create a decentralized corporate structure, with "the best decisions closest to the action." Additionally, the company likes to hire people early in their career and make them "stewards of this culture," Stata says.
ANALOG ENGINEERS IN DEMAND
I asked Stata about the reported shortage of analog engineers. "There's always been a dearth of really good analog engineers," he responded. "They are a scarce breed. But luckily, this is a place where they like to hang out." He adds that for a number of years, studying analog "seemed to be an anathema." But the pendulum has swung back as people understand that analog technology remains essential in the digital world.
Does Stata think that enough U.S. students are graduating with engineering degrees to keep up with demand? "I don't think we're cranking out enough (graduates) at the moment," he says, noting that as a global company, ADI goes wherever the engineering talent is centered. "We were the first in to Ireland, and we had the pick of the litter there," he says. The company invests 19% of revenue, or nearly $500 million, in R&D around the globe.
Still, Stata believes that the U.S. offers the leading edge of engineering innovation. "We can remain successful on shore, but we have to stay ahead of the wave," he says. "This must be the absolute leading edge, and we need to retain leadership in the U.S."