Ray Stata

Today if you are not Careful, Nothing Fails like Success”

A twisted neck and a twist of fate landed Ray Stata, the founder of Analog Devices (the multi billion dollar semiconductor company, that is also a leading supplier of analog and digital signal processing ICs), at MIT, but the values of honesty, integrity and hard work, were instilled much sooner than that. Stata’s recent contribution to MIT helped create the multimillion dollar Maria and Ray Stata Center that hosts office and research space for the Computer Science and Artificial Intelligence Laboratory, the Laboratory for Information and Decision Systems, and the Department of Linguistics and Philosophy among other things.

In an exclusive interview with Kavita Chhibber, Ray Stata talks about life, business and the lessons his own extended family and then his children taught him.

So what were the early influences in life? I believe you landed at MIT because of a hurt neck playing basketball in the gym.

I think very early on, I learnt the values of honesty, integrity and hard work from my extended family of parents, grand parents and so on, and also to paddle my own canoe.

It is true that I hurt myself while playing basketball in the gym and ended up in the hospital with traction in my neck for some period of time. I found myself next to an elderly gentleman who had been an engineer. Since I had always been interested in math and science, and had been considering engineering as a possible direction of education, I started quizzing him a lot about which schools were good and which ones should I aspire going to.

He said that in his mind, if I wanted to study engineering, there was only one school to go to and that was MIT. So I went back and started doing my research and set my sights on MIT.

You received a naval scholarship that gave you entry into several top notch schools except MIT and yet you opted to go there?

I came from a family without a lot of means and the prospect of the expense involved in a college education was quite daunting, so when I got the scholarship, most people advised me to take the money and run. Unfortunately MIT didn’t have a naval ROTC program, yet deep in my heart I had my mind set on it. When I was accepted, I went there anyways not knowing exactly how it would all work out financially. MIT did have a need based financial assistance policy but it was very challenging to both work and study, because MIT is known to be a grind.

My first job was making beds and cleaning rooms. Then I worked in libraries and finally at the laboratories. All this was piled on top of a very grinding schedule, but I managed.

What did MIT teach you about life and about yourself?

It taught me several things. First and foremost I learnt how to be productive and not waste even a minute of my time. I had always had a propensity for hard work but MIT reinforced and amplified that even more. The flip side of that is that now I have this disease where if I’m not busy every moment, I feel guilty about wasting my time.

MIT also showed me where I, a youngster from the farms of Pennsylvania stood in the world. Having always been at the top of the class and being considered a brilliant student and a very accomplished one, I found MIT not only was littered with people like me but that there were many others who were clearly a notch above me. While it taught me humility, I also realized that if I worked hard, I could stay with the crowd. That gave me self confidence and the realization that since MIT attracts the best and the brightest, and I was able to keep up, so I would do okay in the real world.

I have also felt that an engineering education in general and the one at MIT even more so, teaches you not just math and science but also problem solving. So when you go out and encounter challenges in the real world, you already are equipped with the confidence, background and methodology in solving problems.

You started your first company Solid State Instruments in the basement of your apartment with a friend and then your current super successful company Analog Devices. Did you see it become as big as it did at that time?

Well the first company as well as Analog Devices were not companies that we established with high goals in mind. We had defined a target which was very limited in its scope of opportunity. My goal was just to become the best in that particular slice of the world, put our heads down and face the challenges and solve the problems as they arose. Then year by year, you build the platform, raise your head a little higher and then take another step up the ladder and never look back. There was no vision of becoming a billion dollar company-we were focusing every year on reaching next year’s goals and not have 10 year plans.

In an era where people were put into neat little slots of either being technocrats or being in management and sales, and never the twain shall meet, you created a parallel path for engineers that gave them a powerful say in how things should be done.

All I had to do was look at my company and see what it needed to be successful. Our business strategy was driven by innovation, and for that you must have the very best engineers. To attract the top notch engineers you have to have an environment where they feel motivated to innovate. So at the end of the day, your best engineers are the most important people around you.

There is a tendency in companies as they get larger, to let their managers take charge and their engineers have to take orders from the hierarchy. I have always believed that engineers deserved to be full partners in the management of the business with a big M and not a little M by the way.

They should have an equal say in deciding what strategy, or business you should be in, what human resources policy you should follow, and my goal was to establish a parallel career ladder where these folks who represented the top 1 percent of our people and were known for their technical brilliance, could also climb up and their voices were not snuffed. So far we have been able to maintain that spirit though it gets increasingly difficult as you get larger.

You’ve always said you have an aversion to authoritarianism in general and I hear that you are a good listener, a key ingredient for successful inter-personal relationships both in and out of business.

In respect to authority, I have from an early age not liked being told what to do and perhaps that may have been my primary motivator for starting my own company, so that I could maximize the degree to which I could fulfill my own destiny. I have also tried to surround myself with people who think the same way I do, and to create a culture around me where people are encouraged to do their own thing to the greatest degree possible.

Well, if you were to ask my wife, if I was a good listener, she will say it is actually to the contrary! I think it’s really contextual. In some respects I’m a good listener, in others I’m not. When I strongly believe in something, it’s very hard to dissuade me. I can say I’m frequently wrong but never in doubt! But at the same time, I think that in coming to my conclusions, I try to have a sense of empathy and concern for others and in that respect I do listen. I possessed the ability to show that concern early on but the ability to listen was further shaped by forces I don’t particularly understand. I think as I went along in life, I realized that to be a good manager, you have to become more deliberate in listening to what others have to say.

I read a book earlier on which said that the best way to do personal appraisals was to ask the person who you were evaluating, what they thought of themselves and how they did, and then listen carefully before giving your own evaluation. This is one method of listening I didn’t practice early on but picked up as I went along.

You are a man who loves strategy planning. With four decades of business years under your belt, how challenging is it to strategize and even do business today in a global world with different cultures?

It is enormously complex. In the past 40 years, the direction had been intuitively obvious since the number of options were limited and one could think one’s way through and come up with the answer. Today the landscape is so complex that I read that the life expectancy of fortune 500 companies now is about 40-50 years and the two biggest risks in their life cycle are the change of leadership and with that the things that can go wrong, and changes in the fundamentals of your business strategy. So today, if you are not careful, nothing fails like success. I like to quote Andy Grove’s line, “It’s only the paranoid who survive”. So if you get stuck on a success pattern in today’s business world, and don’t see the need to change, you may land yourself in big trouble.

One thing that I have always tried to do is invest a certain amount of company resources to see what is coming up round the corner in the future, even at the cost of investing in obvious risk free opportunities available in the present.

It is not easy when you try to carry that out, not as an individual but as a corporation, with Wall Street and every body putting pressure on every nickel. That is why more companies fail as they grow larger.

I think the reason why we have survived so far is that I have looked ahead and then decided what to do. We started out with the manufacturing of simple products that we manually assembled in a very primitive way. Not too long after we got started the first integrated circuit semiconductor operated amplifiers came on the market and I could see the point of inflection in terms of moving from our pedestrian to this very sophisticated form of technology and it was a huge deal. You could see the strategy and the need to change but the courage and wherewithal to do it was the key-and that was another matter as many people in the company fought that need to change. Here again I applied my frequently wrong but never in doubt philosophy because in my mind there was no option but to make that major transition.

One of the key qualities a leader must possess is to have that courage of conviction, passion and vision to go for it and make it happen.

The same thing happened when you decided to do business in Ireland, way back in the 70s and built the first wafer fabrication facility and also Ireland’s first design center along with a world wide marketing operation at a time when Ireland wasn’t a technology haven. The board had opposed it vehemently.

That was another biggie, and that too turned out to be one of the most innovative and successful business decisions we ever made. Today we have a very successful business in Ireland.

You have had a 20 year association with India. How have you seen India change in terms of product design? You son Raymie’s brainchild Bloomba took concrete shape at Isofttech. I believe the complete product development was done in India at IIT Madras? So is India on the way up on the food chain or was this more of an exception than a future norm?

In the past decade or so things have changed drastically in India, and that is why I have worked so closely with Professor Jhunjhunwala. He pioneered the notion that Indian engineers and entrepreneurs were among the best and the brightest and he could put together a team of engineers and companies that could compete at the top level globally. That spirit is gaining traction now. Ten years ago very few companies would have believed that. In the IT industry there are companies like Wipro and Infosys that went after a business model and perfected it and are world class in the way they have developed their capabilities and management processes. But when it comes to product based companies and product design and the issue of providing services India is still in its infancy. There are relatively few CEOs or marketing types who have been around the track one time, leave alone several times. So things are still developing in terms of management and marketing expertise, or product development. But things are progressing in the right direction and every year I see a bunch pf people adding to their longevity and adding 10-15 years of experience behind them so it’s only a matter of time.

There is no doubt that today in India, skills, entrepreneurship marketing and business strategy are much more developed. We also see experienced people from here going back and sharing their knowledge so the process has started and is gaining momentum. So I’m pretty optimistic about the future of product development in India.

In a recent speech at Olin College you asked “What can engineering schools do to better embed entrepreneurial thinking into the souls of graduates?” Looking at the statistics, it seems that engineering is very low on the list of High school kids. So my question to you would be- what can America do to attract more young people especially women to engineering?

That is a huge challenge and I have been working on it for the last 20-30 years and had almost given up, but today I see some hope and feel more optimistic because I see the focus shifting and an acknowledgement that there is a mammoth bankruptcy in those areas. I feel confident that we can make changes and make engineering more attractive to women and the inner city kids especially. We have had a long history of attracting the best and the brightest in engineering and other areas, from all over the world to come here for education and then stay on here and contribute. We will have to continue to import that talent, because that is what will keep us going. If that trend is discontinued then we will have a huge problem.

I feel that engineering is still the entry point into the professional career track for families that don’t have any prior college experience. When those families have one or two generations of success then people start thinking of careers in medicine, law and other areas. Now all we have to do is to create an awareness of how much excitement, challenge and opportunities there are for people who pursue engineering and business careers.

You have worn many hats – academician, entrepreneur, manager, strategist, technocrat and a VC. What have you enjoyed most about your work?

I think the greatest benefit of creating Analog Devices to me has been the impetus of life long learning. To explore, strategize and to learn to be an entrepreneur, a manager and an inspiring leader have been highly educational. Today I especially love to live vicariously through my involvement with start ups.

Your children Raymie and Nicole are both super achievers. How have you managed to keep them grounded? It’s easy for children of privilege to get side tracked and not fulfill their potential. Also what was more exciting-your going to MIT or your son Raymie following in your footsteps and going one step ahead and doing his PhD there?

I have to credit my wife Maria a lot for the way the kids turned out. She brought them up in a no frills environment where discipline and hard work was a priority. They didn’t until very late realize that their means were all that much greater than any one else’s. I’m proud that both of them are very hard working and have started their own companies.

I remember receiving a couple of honorary degrees and Raymie who was about 14 or 15 went with me to attend one of the ceremonies. On his way back, in the car, he pointed to them and said-“Dad those are fake. I’m going to get the real thing!” So I’m glad he went all the way and did just that. I think in retrospect, I probably benefitted more from my attending MIT. Raymie had more of a head start in terms of awareness and preparation of what was needed.

One often asks children what their parents have taught them, and you have answered that. If I was to ask you what have your children taught you, what would you say?

I think they have taught me to ask myself what are the important things in life that will be the long lasting legacy you will leave behind in your journey here on earth. You come to appreciate the fact that what you leave behind is through your children. I have learnt to appreciate all that helps in the development of young kids and I see and enjoy that through my grandkids more because when you are busy fighting your battles your own children are just one of the many that are out there! With your grand kids, you have a better perspective and more time to learn how important these relationships are, and while I still haven’t succeeded wholly to learn to relax, I have a much deeper appreciation of the blessings I have in my life in personal relationships.