I Am John Galt (29 page)

The military tested her and found she had strong intellectual aptitude. With her college degree and teaching background, she was sent to St. Louis University to learn about electronics—the new technology of wireless communications and radar. She spent the rest of the war teaching radio electronics to military technicians.

T.J.'s parents met fortuitously at Camp McCoy in northern Wisconsin when they were both being processed out of the army after World War II. They settled back in Oshkosh, where T.J. grew up in the 1950s and 1960s surrounded by a culture of football—and the Packers were the only game in town.

It was T.J.'s mother who sparked his interest and passion for electronics. “When I was in third grade,” remembers Rodgers, “she brought out her books on vacuum tube oscillators and detectors, circuits, and other radios and got me interested in electronics, and that's what I always wanted to do.”

He also credits his mother with instilling in him a logical temperament, although as a sort of antimodel. “My mother was smart—excellent verbal skills—and illogical,” recounts Rodgers. “If I argued, I'd either get an emotional, screaming response or I'd get some bullshit argument that was ridiculous, so my hackles go up with that kind of treatment.”

This is one Silicon Valley titan who was never a geek. T.J. was a high school football star who played in two championship games and was recruited to the Dartmouth gridiron for college. “In football, there's none of the touchy-feely shit,” Rodgers explains about his passion for the game, smiling. “You're down on your face in the mud. You know the guy you're supposed to block for has been tackled. The guy who tackled him is laughing at you, and the coach says, ‘Pretty shitty job.' . . . You know, I don't know if you can start if you can't turn that around.”

Despite a punishing athletic training schedule, he breezed through his chemistry courses, earning a major by his junior year. Then for good measure he tacked on a second major in physics because he was “bored with chemistry.” His last term, on what he calls a “lark,” he took an electrical engineering course.

“I got a physics degree. I got a chemistry degree. And this electrical engineering stuff has got to be bullshit,” he thought. “It wasn't; it was hard,” he realized, which is just the kind of challenge that inspires a guy like Rodgers. “It was extremely interesting and it was a course using chips from Silicon Valley to make circuit boards that actually
did
stuff.” After building a light organ for his class project that flashed colored Christmas lights based on the various sound frequencies from his home hi-fi, he was hooked.

Graduating second in his class, “back in the days before everybody got A's to make 'em feel good,” he was accepted in the graduate physics program at Stanford University prior to rediscovering his true passion for electronics. Switching majors at Stanford, as he would soon find out, was no small feat. At one point T.J. recalls being told by someone in the administration that “they were Stanford and I wasn't, and you didn't just move from one division to another. You're accepted in physics and that was it.”

After a persistent networking effort and letter-writing campaign, luck would shine on the budding silicon scientist. The electrical engineering department had just purchased an expensive piece of chip-making equipment to grow semiconductor wafers using exotic gases. The problem was nobody in the double-E department knew anything about the sophisticated chemistry needed to operate the machine. Enter Rodgers, with not only a chemistry degree but a physics undergrad degree to boot. They hired him on the spot. He was in. “I paid my way through college running that machine for that laboratory,” he recalls fondly.

Rodgers earned his doctorate among the founding greats of twentieth-century technology. He took courses from William Shockley, co-inventor of the transistor, the device that replaced bulky vacuum tubes of his mother's era and ushered in the microchip and computer revolution. He also studied under J. D. Meindl, who later won the 2006 Institute of Electrical and Electronics Engineers (IEEE) Medal of Honor for pioneering contributions to microelectronics.

It was a heady time to be in Silicon Valley pushing the bleeding edge of technology. The significance wasn't lost on Rodgers. “We knew exactly what was happening,” he said about the emergence of microchip technology and integrated circuits. “We knew we were going to conquer the world; we knew it was the revolution.”

Rodgers wrote his doctoral dissertation on advanced integrated circuit technology for micro-power integrated circuits. His visionary work correctly predicted the physical needs of futuristic low-power-consumption integrated circuits decades before their modern use in products ranging from powerful, long-life cell phones to military guidance systems.

Planting the Seed of Cypress

With a crisp new Stanford PhD diploma and a fresh idea for a specialized microchip technology he had invented, the now Dr. Rodgers shunned an offer from Intel, opting instead for a role at smaller, more nimble Advanced Microsystems Inc. (AMI). The chip he invented there turned out to be a financial failure and he soon found himself on the street looking for work.

Once again he stiff-armed the giant Intel and took a job with W. J. (Jerry) Sanders at Advanced Micro Devices (AMD) working on a memory chip similar to the one he had created at AMI. Rodgers learned a lot from Sanders about image, marketing, and competing in the rough-and-tumble world of Silicon Valley in the 1970s.
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He also thought he could do even better than AMD in the memory chip market by striking out on his own.

In 1983 Rodgers scored venture funding and founded Cypress Semiconductor, taking Sanders's vice president of marketing, Lowell Turriff, with him. The move spawned a lawsuit from AMD and a bitter rivalry that lasted for years. The climate of the Valley in those days made it more like a medieval turf battle than a civilized game of country club tennis. Rodgers himself formed “raiding parties” to capture the top engineers from other companies for his own ranks.
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The competitive experience seems to have cemented his take-no-prisoners business value system and appreciation of hard work.

“All of a sudden, when you are in start-up, and your friends are going to get put on the street if you don't make money and are able to pay them,” explains Rodgers about the uniquely entrepreneurial culture of the Valley. “You realize that making the money is good, proper, and moral, and it does good for people.”

He adds, “And you look at how hard it is to do that and how hard it is to compete as a start-up against a big, established company, or Japanese companies as a group, or today the Chinese companies as a group, and you all of a sudden realize that doing that is an accomplishment and it takes all of your skill and all of your energy, and it's the right and proper thing to do.”

Despite charging hard for decades, Rodgers still maintains a passion and a work ethic not many match. Aside from a daily lunchtime run, he works every waking hour of the day. He tackles stacks of technical journals in the mornings, saying, “
Transactions on Electron Devices
is not something you read while you are having dinner or a glass of wine.” After a brutal day at the office managing his employees and solving problems, he lugs a Pepsi crate of paperwork home to complete in the evenings from a floating desk in his hot tub.

Like Francisco d'Anconia, Rodgers sees money as simply a benchmark, an indicator of value created, not an end to itself. “I like working— working (and learning) is what I like,” sums up T.J.'s primary motivation, like a true Rand hero. “It is
the
gratifying thing to me.

“All of a sudden you've got a huge manufacturing problem and the puzzle is multidimensional—extremely complicated—and therefore extremely interesting, and always changing,” Rodgers explains eagerly about his inner motivation and source of inherent drive. “What worked two years ago is now obsolete. Either you solve the new set of problems or you're out of there; the whole Valley's that way.”

His schedule doesn't leave much time for philosophizing, and Rodgers claims to have never read
Atlas Shrugged
or
The Fountainhead
. Nevertheless, he's an avid fan of Rand's nonfiction work—and has quoted several of her more subtle economic and political ideas in his own writings. He even hired a Randian philosopher named Jason Alexander to conduct presentations on Objectivism to his executive staff. “I got almost all of my knowledge of Rand from him,” he relates.

In 1992, Rodgers wrote a book called
No Excuses Management
(Currency/Doubleday) in which he laid out his no-nonsense operating methods in a playbook for like-minded business leaders. His approach to employees seems to be like a hard-charging football coach—or maybe even a bit like a drill sergeant. There is no coddling. The measures of success are objective. Do your job. Solve problems. Understand and admit your mistakes. Rodgers clearly loves doing business, but with his team, it's tough love.

“There are people in the world, those who have been through self-esteem stuff when they were kids and got wrecked that way,” sums up Rodgers's perspective on the popular feel-good management culture. “They screw something up and it costs the company a million dollars because they didn't care that much. Then they would like to hear, ‘I'm glad that you made that amount of progress, but, you know, we could really improve even further (like lose less than a million dollars) if we did this and that.' I don't do that. To me that's a lie.”

Rodgers does tolerate mistakes from his troops; in fact, he welcomes them, saying, “If they don't make mistakes, then we're not pushing them, and if we're not pushing them, we're not going to be competitive.” What he won't tolerate are excuses, ignorance, or apathy. “If a guy comes in and doesn't know what's going on, that's bad. If he doesn't
care
that he doesn't know what's going on, that's
real
bad,” explains Rodgers. His solution? Displayed in a poster on the wall of his office is a horrifying image of a toothbrush—with stainless-steel bristles. “You bring out the stainless-steel brush and rough the guy up a little bit and if he goes away, congratulations—self-selection.”

Rodgers also instills a self-reinforcing culture intolerant of corporate politics. The admonition in Cypress's values statement “We deplore politicians” isn't a reference to public office holders, be they Democrats or Republicans; it's about
office
politicians. “They try their little politics at lunch someday, and they get zapped,” T.J. explains of a typical misfit who somehow makes it past his arduous new-employee screening process. “Maybe they undermine somebody and they get zapped again, and then they realize that ‘my way of doing business—enhancing my reputation by undercutting others—is not in the interest of the company,' and what happens is the troops eat them up. They go away.”

Yet despite his tough management style, Rodgers doesn't see himself as an autocrat. Most of the company's major decisions, from resource allocations to project priorities, are made by a group of talented executive vice presidents together in a room, with no back-room dealing allowed. “It's not because I feel touchy-feely,” explains Rodgers, in a rational view of his own limitations. “It's that I know that any time an organization gets bigger than a hundred, the leader can't make all of the decisions. You just don't know enough. Therefore, getting data from layers in the company and chewing on it and letting them think about it, talk to their guys and come back, that's how you make decisions that work.”

Yes, there's a pattern emerging here. In his own distinctive style, Rodgers is saying the same things about managing a business as John Allison of BB&T, the Rand-inspired executive we met in Chapter 3, “The Leader.” They both learned from Objectivism to be objective, that it's reality that counts; lies and evasion aren't tolerated. They've both learned that complex modern companies depend on the independent decision making of good people throughout the organization. But those people must be united by a robust philosophy that they explicitly agree to hold in common. Those who can't or won't subscribe to the philosophy have to go; the philosophy serves as a filter to select the best people, and to knit the best into a team.

Rodgers's course at the helm of Cypress hasn't always been a straight path upward. The semiconductor businesses is intensely cyclical, not only sensitive to overall economic conditions of growth and contraction, but subject to chip price swings driven by supply, demand, and the inexorable march of new technology under Moore's law.

The dot-com bust and 9/11 attacks dealt Cypress a major loss of $3.28 per share in fiscal year 2002. Its stock plummeted over 90 percent from its all-time high. Then the Great Recession later in the decade sent profits down yet again. But Rodgers retrenched, cut costs, and focused on what he does best: the fundamentals. It's like his beloved Packers—it's all about blocking and tackling.

According to Securities and Exchange Commission (SEC) filings, until just recently the board of directors received no cash compensation for serving the company. Rather, any financial incentives they received were in the form of long-term stock options effectively aligning their decision making to the enduring success of the company. Rodgers himself takes home less than $600,000 in salary—an amount that may seem large, but is modest in the rarefied atmosphere of today's CEO pay—and he lives by his own rules of pay for performance. When the company is cutting costs to weather a downturn, Rodgers and his executive team share in the pain. According to the 2009 Cypress annual report, “Like all other employees, our executive officers were impacted by the Company-wide pay reduction implemented in the second quarter of 2009. As a result, the base salaries of our executive officers were reduced by between 9% and 11%.”
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Furthermore, neither Rodgers nor his executives received any new stock option grants in 2009.