Better before bigger: How Linear Tech was built: Page 5 of 6

July 24, 2015 // By Steve Taranovich, EDN
I [Steve Taranovich writes] recently visited the 2015 UBM ACE Awards Lifetime Achievement Award recipients, Linear Technology’s Bob Swanson, chairman of the board, and Bob Dobkin, CTO. These men are an important part of the early days of electronics in Silicon Valley and have seen the transition from Germanium transistor designs in electronic circuits, on through to the early days of the Integrated Circuit (IC) and finally, culminating in the co-founding of Linear Technology, deemed one of the most profitable and successful companies in Silicon Valley today.

EDN: What I see quite a bit is acquisitions and technology flowing out of this country. We don't really manufacture much anymore, but technology was big for us.

Dobkin: We manufacture our own wafers; to be a good analog supplier we need to have control of a lot of specialized processes that don’t come from foundries. We’ve got processes that we developed specially designed for analog. 40 years ago everybody did analog on the same bipolar process; it’s not the same now.

Swanson: One of the challenges going forward is you can’t afford to spend $2B to set up a new fab to support $100M of business. There are some things that good business sense says that ‘You can’t build a fab to do that.’ But here’s a $100M piece of business we can make money at, but we’ll have to depend on somebody else’s fab. But it is true today that 95% of what we do—part of the secret sauce is in the wafer fab.

Linear Technology’s high speed ADCs were touted on the cover of this May 10, 2001 edition of EDN. Jim Williams wrote articles for EDN from May 5, 1975 to 2011. See his work here.

EDN: Well, you guys have been around a lot of years and that says a lot about your company and the respect it has in the industry.

Swanson: When you think about it, we have to be proud of what we’ve accomplished. And a lot of it was, ‘Wow, this is what we said we would do.' We set these high goals. Some say 'Nobody sets goals nowadays,' but then a little while later they say, 'We’ve almost done it!'

Probably the greatest thing is the culture we have with these really bright engineers who choose to work here. They could work anywhere, and they have rough days and good days and there are times when we won’t do exactly what they want, but they get most of what they want. And they feel that it’s an inspiring environment and they stay with us, and they innovate, and they do things that other people can’t do.

EDN: It’s so refreshing for me to witness your unique corporate culture when I meet with your marketing engineers and design engineers, a real bright group, and I can see that they are all very happy here at Linear. You listen to all their ideas and give them opportunities to run with an idea. It’s almost, but not quite, like a mom-and-pop organization—certainly a close relationship between management and designers.

Swanson: We need to keep that. National got to be a $1B company and they said ‘we have to have matrix management…’ they totally messed things up. Even then I thought that just because we are a $1B company, I don’t understand why we have to change anything. Some of those things they wanted to change were the reasons we got to $1B. Why would you change that? Well they did anyway.

So, I think we can go a long way with this structure. I hope that when I’m gone that they don’t change very much of it.

Dobkin: At our size we’ve kept the same structure that we had when we were smaller. And we’re growing with it. And I think the management here has seen that this structure works. There’s no reason to change it.

Swanson: The only thing we changed a few years ago was when we got to a point where we said ‘Everybody can’t report to Bob (Dobkin).’ We broke the company into product groups: power, signal conditioning, and so forth. Then power got so big that we split it in two because if you’ve got two really smart guys—it’s got to be better than one smart guy. So we get to the point where we dice things up to an area where they can really focus, because we have to beat the competition.

Dobkin: And we have to keep the customers happy.

Swanson: With good people, you let them do the right thing and stay out of their way and help them when they need you to be there.

Dobkin: Our attitude in the beginning was to help the customer. Even if he doesn’t buy your product, he will come back to you next time. Do him wrong and he will never come back to you next time.

Swanson: I remember in the early days, our FAEs would design in a TI $0.50 part. I would say, ‘we have a $1 part—what are you doing?’ The FAE would say that ‘He doesn’t need our $1 part, Bob [Swanson]. We have 3 of these really good linear parts designed in and he needed a linear regulator, and the $0.50 part is just good enough and if I try to force a part on him that he doesn’t need, it will come back to bite us.’ Well, I reluctantly gave in to that.

EDN: It’s great that that type of culture filters down to all your employees from you guys.

Swanson: That’s a culture I had to learn. I used to say ‘Hey, we’re in business here and we could be out of business and our success isn’t official—what do you mean you designed in a TI part?’ They convinced me that it was the right long-term thing, and we’re not going out of business next month!

Swanson: I’ve learned over the years that designing in the parts that are the right parts that the customer needs and not stuff that they don’t need—in the end goes to our credibility.

[continues...]