Blue Dots Partners

Ben Lee, the CEO of mCube has a reputation for being a doer and challenging the status quo.

It was on a winter day in Tokyo in the middle of a QBR (quarterly business review) meeting back in 2008. Ben had started running worldwide sales at Cypress Semiconductor at that time and was traveling around the world meeting with local management teams. The team in Japan was very much looking forward to meeting Ben and sharing their plan for moderate, single-digit growth that was much better than the country’s projected GDP growth. An hour into the meeting, Ben’s frustration was mounting until he finally stopped the team and explained: “a single-digit growth is not exciting and comparing to the anemic GDP growth is not what I would call a bold plan! You are wasting your time and I am wasting my time. This meeting is over.” Ben pulled the local management team in a separate room and challenged them to come back to him with a plan to grow the revenue 10X, leaving them to figure out how to get there. Ben was purposefully not giving them any guidance or timeline. They will have to figure it out. Their reaction was: “this guy is nuts.” They were in total shock.

The concept of thinking not only differently, as I learned working with Steve Jobs at Apple, but BIG germinated in Ben’s head a few years earlier when he was running Asia Pacific for Altera out of Hong Kong. Altera’s revenue in the region were flat because of the high ASP of their product portfolio and the narrow market segment they were selling into. Asia Pacific only contributed to 6% of global revenue compared to the typically more than 40% at other semiconductor companies. At that time, Ben started a campaign called “Going to the Ocean.” The idea came to Ben as the market was dominated by two large players, Altera and Xilinx in a small bloody red pond like sharks going after each other’s throat. Ben thought that the best way to grow was to expand into a much larger market, hence the concept of going to the ocean. The idea is to think big, really big. One day after discussing this new Going to the Ocean initiative, one of the distributor executives showed up half an hour late to meet with Ben for dinner. He was late because he decided to stop by a bookstore to get a copy of Blue Ocean, a book written by W. Chan Kim and Renée Mauborgne, professors at INSEAD and published in 2004. Ben had never heard of the book before, but it was the exact same idea.

At Cypress, the situation was similar with a modest top-line growth. The company had a new great microcontroller product called PSoC (programmable system-on-a-chip) which was quite different from their heritage SRAM product line. The battle cry for the new product was “let’s get 40,000 customers,” which was good for commodity products, but not for PSoC.

Ben started to go around the world with the same mantra: show me a plan to grow our revenue by a 10X factor. Most of the US sales regions picked that up quickly and came up with solid 10X plans. The Japan team never showed a plan. Ben went back to Japan and explained that the only way to really grow is to leverage the channel partners, especially with only a small direct sales team in Japan. They started to push the distributors and challenged them to come up with their own 10X plans. The product was superior because of its programmability and some distributors understood and embraced the opportunity and got mindshare and support from Cypress. Others did not and were terminated by Cypress with the support of T. J. Rodgers, who was the founder and CEO and is considered a legend in Silicon Valley.

Once the distributors came out with their 10X plans, they were then measured and ranked against each other for recognition and performance comparison, which created a healthy competitive environment. The best thrived, the worse died. Cypress had 26 distributors at the start of the 10X plan initiative and fired 16 of them and added 6 new to finish with 16, most of them were highly competitive at the local level. Cypress committed to giving solid support to the top ones. Ben had a VP of Distribution with a record of swift execution, named Geoff Charubin, who joined him at mCube. Geoff was merciless with the underperforming distributors.

The 10X plans with sales projections ranged anywhere from 2 to 5 years were driven by the distributors, not Cypress. Cypress did not dictate or define these plans. However, the measurement and tracking against their original plans was done religiously by Cypress. This enabled Ben and his team to model sales and measure predictability and outcomes based on funnel metrics, at all three stages: front, middle and back-end. This really brought a lot of clarity and visibility to the entire sales process. As a result, the 10X plans got better, more accurate and more predictable over time. Better results lead to more transparency which increased motivation and effort. Success breeds success.

One last piece that drove the success was the segmentation of customers paired with an initiative called “Winning with Cypress Value.” The segmentation was very key to elevating the game. In a way, it is similar to the segmentation we describe in our book, Aligning the Dots in the section titled The quest for the customer’s truth on page 136. In the case of Cypress, the stratification of the customer base was done against four tiers:

On top of that, Cypress took a page from Cisco to certify distributor FAEs (Field Application Engineers) in Gold and Silver levels and they were allowed to print the PSoC certification logo on their business cards. The Gold and Silver certified FAEs handed out their cards to customers with pride.

Now you, as a CEO, a business leader, an entrepreneur, an investor or board member know how to push a management team to think differently, to think bold, to think big and not be content with the status quo. Challenge them to come up with their own 10X plan.