Applied Bad NewsWisdom Is Good News And Other Insights That Can Help Anyone Be a Better Manager JAMES C. MORGAN with Joan O’C. Hamilton uccess in business demands the effective management of people. S James C. Morgan, who for nearly three decades led the high-tech powerhouse Applied Materials Inc. to both financial success and to the designation as one of America’s most admired companies and best places to work, provides a simple, straightforward set of principles and tips that he says can help anyone be a better manager. Applied Materials is one of Silicon Valley’s great success stories and it helped propel the digital revolution. But Jim Morgan’s management techniques are not reserved for high-tech: Applied Wisdom shows how the same approaches, tools, and values work at any scale, from start-ups to middle management in a global corporation — and even to non-profits. Rich in stories and practical examples, it’s a must-read for those seeking a timeless and proven management manual. Advance praise for Applied Wisdom “Jim has had great success managing in large and small, for profit and non profit, domestic and global organizations. I have been a beneficiary of Jim’s wisdom as we worked together to get things done and this book makes that wisdom come alive for new and experienced leaders alike.” — Henry M. Paulson, Chairman, The Paulson Institute; former Chief Executive, Goldman Sachs; former U.S. Treasury Secretary “Jim Morgan used the ideas he brings to life in this book when he built Applied Materials from a tiny, struggling, near-bankrupt company into an innovative global leader. Managers of any size business or non-profit group will find solid advice for building agile and effective organiza- tions in this book.” — Meg Whitman, CEO, Hewlett Packard Enterprise, former CEO of eBay “Jim is one of the icons of Silicon Valley and I can tell you 30 years running a high-tech company in a cyclical industry is not easy. I have seen Jim use the advice in Applied Wisdom with great success, most notably: looking for trouble out into the future as conditions change, and always showing respect for people. In partnerships, Jim notes that both parties have to be successful — that is why he was so successful, especially as the company expanded in Japan and Asia. A lot of young businesses have a very selfish attitude, but success often takes compromise. Applied Wisdom reinforces the importance of going beyond slogans and lip service and committing to basic, but very important values.” — Willem P. Roelandts, Chairman of the Board of Directors of Applied Materials, Inc.; former CEO of Xilinx; 30-year veteran of Hewlett-Packard Co. “Applied Wisdom is a treasure trove of useful insights from a true mas- ter of leadership in the business of technology about how to build the best, scalable decision-making process in a high-tech company…. Rare is the leader who can successfully grow with a company from start-up to multi-billion dollar enterprise. Rarer still is one who openly discloses the secrets he learned along the way. Jim Morgan pioneered many of the business axioms that we take for granted today, such as the value of finding solutions over the simple offering of products and the impor- tance of globalization into tough regions like Japan and China.” — G. Dan Hutcheson, CEO and Chairman of VLSI Research, Author of Maxims of Hi-Tech: Rules of Engagement for a Fast Changing Environment or How to Thrive in What Is the Extreme Sport of Business “Jim’s wise managerial advice has been enormously valuable to me — and many others — at the Nature Conservancy over the years. It’s great to see him sharing his simple, practical ‘Morganisms’ in this excellent book. Applied Wisdom is a must-read for anyone who wants to have a more productive, focused and motivated team.” — Mark R. Tercek, President and CEO, The Nature Conservancy “I often tell young entrepreneurs that your homework is never done. There are many brilliant people with great ideas, yet very few who can successfully lead and scale up a high-impact company. It’s inspir- ing when an executive of Jim’s caliber says that he believes the vast majority of great managers are not born, they create that capacity by learning and changing. If you want to be a better manager follow his straightforward prescription and tips.” — Heidi Roizen, Operating Partner, DFJ; Fenwick and West Entrepreneurship Educator, Dept. of Engineering, Stanford University Applied Wisdom Applied Bad NewsWisdom Is Good News And Other Insights That Can Help Anyone Be a Better Manager JAMES C. MORGAN with Joan O’C. Hamilton Chandler Jordan Publishing Applied Wisdom: Bad News Is Good News and Other Insights That Can Help Anyone Be a Better Manager By James C. Morgan with Joan O’C. Hamilton Copyright © 2016 James C. Morgan All rights reserved. Published by Chandler Jordan Publishing Los Altos, California www.appliedwisdombook.com First edition: November 2016 ISBN (paperback): 978-0-9983292-3-9 ISBN (ebook): 978-0-9983292-1-5 Cover and interior page design by Geoff Ahmann, AKA – Ahmann Kadlec Associates Publication consultant: Thad McIlroy, The Future of Publishing Printed in the United States of America by IngramSpark All profits from this book will be donated to philanthropic causes. TABLE OF CONTENTS Dedication 1 A note to my readers 3 Section I: Introduction 5 Chapter 1: Early years 11 Chapter 2: Morgan & Sons Canning 17 Chapter 3: Heading east 24 Chapter 4: Rebooting the plan 34 Chapter 5: General leadership 42 Chapter 6: Work for the best managers you can 47 Sidebar: Great moments in technology — and with Mr. Lincoln 51 Chapter 7: North to Silicon Valley 55 Chapter 8: New ventures 61 Section II: Applied Materials 75 Chapter 9: Luck is when preparation meets opportunity 79 Chapter 10: The power of deciding, the challenge of change 89 Chapter 11: Products and the ‘Flying Wedge’ 98 Chapter 12: Going global 104 Chapter 13: Culture, showerheads and the P5000 117 Chapter 14: Work hard, stay alert to new ideas, achieve goals, repeat. 124 Chapter 15: The larger context 142 Chapter 16: Business and government 156 Chapter 17: The Founders’ Legacy and The Tech Awards 168 Section III: Philanthropy (And why good management always matters, even beyond business) 181 Chapter 18: 10 key Morganisms that work for any organization 183 Chapter 19: New horizons 196 Chapter 20: Nature for people 205 Chapter 21: Not just reports, progress 216 Chapter 22: Non-profits face similar issues as start-ups 221 Chapter 23: Collaboration in the northern Sierra 226 Chapter 24: Final thoughts 249 Acknowledgments 257 Appendixes 261 About the authors 275 To my wife, Becky, and to the Applied Materials family who made this story possible. To my son, Jeff; my daughter, Mary; and for my grandchildren Sean, Morgan, Julien, Lucie, and Sophie who inspired me to pass along important lessons as my dad and granddad did for me. A note to my readers This book is designed to help anyone who wants to learn to make better decisions, manage more effectively, and more successfully lead organizations. I talk about my personal journey, embedding in my stories a set of tips and insights that have worked for me over a long career that began in the low-tech world of farming and vegetable canning but eventually led me to manage high-tech innovation on a global scale. As my involvement in non-profit organizations increased, I realized those same tips work in the non-profit sector as well. I was motivated to share them in a way that I hope is useful to a wide audience of managers working their way up the ladder or running small organizations. Excellent managers are not born. They develop by learning: to identify critical driving forces in their environments; to build momentum by timely decision-making; to collaborate in a transparent and ethical manner; and to implement basic structures and processes in an overall climate of respect. The best managers help people maximize their potential. Every person, regardless of education, training, or current position, is capable of improving his or her management skills, whether in a start-up, a global company, or a non-profit rich in passion but limited in resources. In the Appendix, you will find a set of worksheets designed to help you assess your management skills and identify which areas may need development. To your success ... Jim Morgan 2016 SECTION I Introduction I grew up in Cayuga, Indiana, a small town of about 800 people near the confluence of the Wabash and Vermillion rivers not far from the Illinois border. My grandfather James Morgan and my father, Russell, owned and ran a farm and vegetable canning business called Morgan & Sons Canning. Our lives revolved around the cannery operations, which in turn revolved around the seasons of agriculture: spring planting, summer growth and harvest, summer and fall canning, and the winter period of rest, repair, and preparation before it all begins again. Morgan & Sons was a small, intense family business that employed between 25 and 200 people over the course of each year. I was born in August of 1938, and I began working there at an early age. Eventually I learned how to do practically every single job in the cannery, from farming to driving a forklift to negotiating contracts and paying the bills. When I was growing up Morgan & Sons was Cayuga’s biggest employer. There is nothing that better reinforces the importance of integrity and treating others with respect like managing and working alongside neighbors you know you also will see at the grocery store, at a ball game, and in all the other aspects of life in a small town.