Interview with Tom McCoy
Former Executive Vice President, AMD
Leaders Speak Series
Founded in 1969, Advanced Micro Devices, Inc. (NYSE: AMD), or AMD, is a Fortune 500, multinational, semiconductor company and the second largest global supplier of microprocessors behind Intel.
Thomas M. McCoy joined AMD in 1995 as general counsel and secretary, later also serving as the Chief Administrative Officer. When we interviewed him, he was the Executive Vice President of legal, corporate, and public affairs, which also included strategy.
McCoy is now a partner in the global law firm of O’Melveny & Myers in Washington, D.C., where he chairs the Integrated Legal Strategies practice, counseling clients in high-profile and crisis management situations. He is a former member of the board of directors of the Markkula Center for Applied Ethics at Santa Clara University.
Here are excerpts of our interview with Tom McCoy for Triple Crown Leadership:
How would you describe AMD’s leadership approach?
McCoy: Our approach has always been values-based. The founder set values that were quite attractive to me when I joined the company. So, during my whole tenure, our executive leadership model had values as the center. For me personally, my leadership model has always been fanatically values-based.
What are the values of AMD?
People first. Products and profits will follow. We’ve tried to run the company for the benefit of employees to serve customers.
Secondly, our customers’ success is our success. Those two touchstones are the filters by which we make all decisions.
We’re not running the business. We’re running the business for customers. Our high performance depends on the motivation of our people. So, we’ve always been very big on: “It’s not who’s right, it’s what’s right.”
Respect for people and uncompromising integrity in everything we do. We have to be able to create our customers’ success, even above our own success, because in the long run that will be how we achieve sustainable success.
I tend to close our employee leadership academies with four rules.
1) Everything with integrity.
2) Everything at the pinnacle of excellence. Everybody has a gift. Everybody has to figure out what that is. And everybody has to operate at the pinnacle of what his or her unique excellence is.
3) A healthy sense of humor. If leaders walk around downcast, then everybody will be downcast. So, how one walks across a parking lot, how one behaves in a meeting, one’s general demeanor are all influential. I tell people, “As a leader, you are a thermostat. Your job is to be a thermostat of the environment, not a thermometer going up and down.”
4) Confidence. The role of leadership is to inspire hope and confidence. No matter how good things are, they can get better. No matter how bad things are, they will get better. Without displaying confidence, you’ll never be able to unify a high-performance workforce behind your leadership. That’s the number one thing that people crave. Everybody wants to be inspired by hope and confidence.
And how do those rules fit with the values of AMD?
McCoy: Perfect question. Unfortunately, too many organizations spend a lot of time crafting missions, visions, and values, but they never really explain why.
They’re not just heart-filled words to put in a brochure or post on a website. They’re actually a tool for decision-making. In life, in professional life, in a tough business, every day you have situations where you really don’t know what to do.
So, the question is, what do you do when you don’t know what to do? When you’re confused, scared, not sure, pressured, how do you go about making a decision? What’s your construct, your architecture?
The purpose of a values statement is to tell you what to do when you don’t know what to do.
When one defaults to values, informed by missions, visions, goals, and strategies, the right answer will invariably pop up. It may not be a comfortable answer, but the right answer under the heading of “doing the right thing at the right time” will invariably pop to the surface quickly. It’s not just touchy-feely stuff. It really is very practical, a tool of decision-making.
The role of leader is to pattern that. You have to model that, to show people how you do that. And the way you do that is in your daily diet of meetings where people are coming to you because they’re not sure what to do. They’re looking for leadership, guidance, and support. By modeling that kind of values-based, decision-making architecture yourself in some collegial dialogue, you only have to do that a couple of times before word spreads. People then prepare accordingly. It’s a virtuous cycle that is created if you’re disciplined and rigorous about applying it.
What is AMD’s culture like?
McCoy: I would describe it as a culture of the lighthouse, where we view ourselves as being special, unique, and strategic–a place that should be attractive, whether you’re working inside the company or dealing with it externally. I encourage people to think about a culture of lighthouses. That means, in the storms when people are looking for help, they look to us. For leaders, they look to us.
They are looking for people who approach the world and human relationships from a servant’s model. They want to know that the leader is there with the privilege of service to the people who work for that person. We exist in business for the privilege of serving customers. We exist as leaders for the privilege of serving the people who work for us, which means that we need to be inspiring trust and confidence, that we care more about them than we care about ourselves.
If we can communicate that effectively and sincerely, then people will respond with incredible energy and enthusiasm because they believe you really care about them. So, our model is one that tries to remember that business is transacted by people in relationship with each other. Everything is done as a consequence of relationships.
In order to really optimize the power of an organization, one has to unify. The only way to unify an organization is through a sincerity of leadership that you’re in it for them, and you’re not in it for yourself.
So, what we ask people, what we teach people, when they’re graduating into the leadership at AMD, we ask them to continually ask themselves this one question:
“Do your people love to work for you? Are they excited to come to work because they work for you?”
How does one achieve that result? It’s about giving them the feeling that they’re relevant, that what they do is significant, that they’re growing and will have opportunities to grow, and that you care about their personal success, and what it means to them in their lives.
One of the ways we do that is through our public affairs strategy. We believe that people like to work for a company that is engaged in the community. So, we’ve always had a very strategic public affairs effort that is valued, not so much image or reputation, but for what it does for employee engagement with leadership.
For example, one of the things we ask our employees is, “Why do we work so hard? What is the desired result here?” The desired result, invariably, is to build a better life for our families and for our community. That’s why we all work so hard. So, we try to help them see why the integration of life in a company and life in a community is one and the same. If you build a culture like that, over time it’s a self-selecting basis for recruiting.
How was this culture built and by whom?
McCoy: AMD has only had three CEOs. Jerry Sanders had a relentless focus on values, on what’s right, the focus on the customer, and on integrity. That tone at the top for many years really laid a deep, solid foundation for the company. Hector Ruiz came from Motorola and was attracted to the company because of the values, which was why he said he wanted to come.
It was CEOs who empowered, if not exhorted, their entire executive team to be the evangelists of the culture. It wasn’t just words. Whether it was the chief operating officer, the chief financial officer, or the HR team, their jobs were to architect, maintain, and continually focus on the culture.
That’s an important and hard thing to do over time as the world changes and as businesses become more complex. It’s something you can’t just talk about once a year. It’s something you have to be very consistent about.
Do you consider AMD to be a high-performance organization? And, if so, what are the metrics by which you would measure that?
McCoy: If you begin with a value that it’s people first, then of course one of the most important measures is simply your employee engagement, your recruiting, and your retention.
We have ebbed and flowed in our effectiveness like all organizations. What we look at are things like are people playing blame and shame games, or are people trying to build across boundaries? How quickly do you deal with people playing blame and shame?
One also has to constantly measure whether your effectiveness is working at all levels or only some levels. You can have apparently effective high performance at the top of the company, and then you realize that it’s not working so well as you cascade down the chain.
We’re competing against a company that is ten times our size and ten times our resources. The only way to do that is by being more unified, being more efficient, and by creating a culture where people feel it’s not just a job, that it’s a calling, that there’s a destiny to the company, that there’s a unique joy and sense of accomplishment and significance.
We’re different, and we’re better, and that makes us special, that makes us more highly valued in the marketplace, and it makes us a more valued place to work, generating the feeling that you are working for a company that’s special and that you have a unique opportunity to make a difference.
Do you think that this culture helps you get through tough times?
McCoy: There are a lot of companies in the world that are run on greed and fear. That’s their leadership model, with leaders who are abusive and arrogant. It’s where people say, “I’m afraid if I don’t do a better job, then I’m going to get fired. I’m afraid I’m going to once again get humiliated in a meeting.” Or it’s, “I can make a lot of money and that’s the singular focus.” It’s all about optimizing every last dollar for the P&L. It’s not about running a company that is designed to be sustainable for stakeholders. It’s only about making a quarter.
I would never work in a company like that. Life’s too short.
What we have to guard against is the human tendency to be frustrated with the performance of other people and be finger-pointers of blame.
It’s not constructive. That is a human tendency that we have to guard against most. I’m constantly sending notes to people when I know that they’re stressed, disappointed, or angry saying, “You haven’t forgotten my rule about a sense of humor have you?”
If people believe their leaders simply care about the results and don’t care about the person, how hard it is, or how frustrated, disappointed, or scared they are, then they suffer pretty large attrition.
How were the mission, values, and vision of the organization set or reset over time?
McCoy: A decision to do it has always been a top leadership decision. But the process has always been a broad-based, ground-up, collaborative process, and we have typically used internal teams.
We have a group called Employee Culture Communication responsible for interacting with the culture as well as tuning it.
This organization touches every employee location. We invested a lot in technology to make it an organization that is powerful in its ability to communicate, even to reach every person on the desktop by video at one time.
They do polling in the company, so we know how people are feeling and what gaps there are between who we say we are and who we really are.
How much versatility of leadership is there within AMD?
McCoy: How one manages and leads an engineering organization or manufacturing organization is different from the way that you lead or manage a staff organization. So, by definition, when one is communicating to different types of organizations, one has to be tuned to who they are, what appeals to them as a matter of logic and inspiration.
AMD is a company whose leadership manages with soft edges and not with verbal slaps. Do we sometimes show edge, impatience, or anger? Absolutely. Sometimes we write stupid emails. We’re all human.
There have been times when leadership was overly directional, and times when leadership was too hands-off. I think we’ve seen both extremes. As in all things in life, it’s always a question of balance.
Leadership is a lonely proposition. The more senior you are, the lonelier you are.
In today’s world where speed, nimbleness, and flexibility in adjusting to changing dynamics in global flows of investment, technology, people, and policy, there’s no way you can be nimble if you don’t have leaders ready to step in and say, “We’re not going to talk about this anymore. This is what we’re going to do, and here’s why. We may have to come back and figure out what we broke, but this is what we’re going to do.”
That requires leaders who have experience and have developed fairly healthy confidence in their judgment, while being mindful of what their people can do and can’t do. You can’t direct people to do things without having confidence that they can actually do them. If you don’t think they can, then you have to figure out a different way.
Is leadership widely distributed, or is it concentrated in the hands of a few people?
McCoy: It’s widely distributed, and our debate today is whether it’s too widely distributed. The question we’re asking ourselves today is do we have too many people who are empowered to say “no” and not enough who are empowered to say “yes,” because the joy in leadership is the power to say “yes.”
Anybody can say “no,” but at some point somebody’s got to say, “We’re going to do this. We’re going to invest in this. We’re going to make this happen. This is important, go get it done.” That’s where the values really come in. I think the biggest challenge for multinational companies is the fact that you’re operating in many different countries.
We have cultural and time-zone challenges, and we’re trying to migrate from an organization that has been headquarters-centric to one of regional power. How do you get that balance right? How do you get that check and balance right between regional empowerment so that you can grow strong leaders, who can make the right decisions at the right times, rather than fumble around waiting for time-zone committees?
What else should we know about leadership at AMD, Tom?
At the core, one of the most important attributes of leadership is what I’ll call indomitable will. You know there are times we will bend reality to our will. We are not going to be denied. Failure is not an option. We will find that way. We will figure it out, and we will get it done.
If leaders don’t believe, in a healthy way, not an arrogant or a foolish way, that together they are indomitable, and if they aren’t able to touch a global population and say, “We are indomitable,” then I think it’s pretty hard to march successfully across true crises.
So, we actually have as a core value the indomitable will of AMD. We will always figure it out, and, no matter what happens, we will survive, and we will thrive.
Have there been times when you’ve had less than stellar performance? And why?
McCoy: At one point, we lost what I’ll call horizontal effectiveness with too many people operating in silos, and we didn’t effectively bring people together so that fears were expressed, things were confessed, ideas were shared, and resolutions forged. The lesson for us in that season was to realize how it’s not enough to have high-performance leaders. High-performance leaders operating in verticals stacks will not lead to a high-performance company. You have to have high-performance leaders who are in a high-performance, horizontal operating model.
How would you define great leadership in a few sentences?
Great leaders are lighthouses of values. They view themselves as having the primary responsibility of unifying and aligning people to work together to absolutely operate at their pinnacle of excellence.
The primary role of leader is to provide that beacon on the hill of, “This is where we’re going. These are the values, and we’re not doing this for me. We’re doing this for you. We’re doing this for our customers, we’re doing this for our communities, and we’re doing this because at the end of the day we want to be proud of the accomplishments.”
Have you ever experienced that kind of leadership in your career?
McCoy: Yes. It was just incredible. I worked for nearly twenty years as an associate and then a partner at a major, institutional law firm with Warren Christopher, the former Secretary of State. He was a very values-based leader. The entire partnership was fanatically values-based. The integrity was just unbelievably strong.
What did it feel like working in that environment?
McCoy: It felt safe. The last thing I worried about was waking up one day to read about how one of the partners was involved in a fraud. I felt very safe, and it felt empowering to do the right thing at the right time, no matter what, that you would be protected, that if you did the right thing that, even if people were really upset about it, the partners would step in and say, “You want to give somebody a problem? Try giving it to me.”
The protection of leaders, who were fanatical about professional values, whose view was that the only thing that you have to give the world is your integrity and credibility, that protection was very empowering and comforting, even in a highly pressurized environment where temptations arise.
I was taught that no matter what anybody says, no matter what we say, no matter what you hear, no matter what you think, don’t ever, ever hear us say it’s okay to do the wrong thing.
Every CEO running a public company is insistent about making the numbers. “We told the Street this is what we were going to do. We need to do everything we can to deliver on that promise. Don’t come in here and tell me we’re not going to make the numbers. Come in here and tell me how we’re going to make the numbers.” That’s what CEOs do.
But great leaders also say, “Now let me be very clear what I mean by that. We never do anything stupid or that can come back to haunt us. We do it the right way.”
It’s the failure to make it clear that, even though you’re insistent about the results, the integrity of the results is foundational. It has to be articulated. Those words can never be taken for granted.
Any final thoughts on leadership?
McCoy: My generation is on its last laps around the track. We don’t seem to have learned much from the insider trading scandals of the 1970s, the scams of the savings and loan crises, and the accounting frauds and crookedness that led to today’s crash because of the arrogance and greed without healthy checks and balances.
We have to relearn the importance of integrity in leadership, the importance of checks and balances, and how to construct a healthy organization that is self-correcting to maintain a healthy culture.
It’s time the world became much more insistent on corporate governance and leadership to be effective, not just for a year, but for generations.
Bob and Gregg Vanourek, father and son, are co-authors of Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations, a winner of the International Book Awards.