Dr. Adizes: Jim, you have authored and published a book, Applied Wisdom, (2) in which you summarized your thirty years of leading Applied Material as its CEO and Chairman of the Board. Applied Material grew from a small company, with $17 million in revenues when you joined, into a company of $10 billion in revenues when you retired. You have put your thirty years of experience into that book. Why did you write it? It takes time and effort to write a book.
Jim Morgan: My first goal was to write something for my grandchildren, for them to know where I spent my adult life. But as I wrote the first draft, I realized there was enough “applied wisdom” from my experience leading the company that could be useful to people taking courses on leadership, people who do not have thirty years of experience. So, my goal in writing the book is for future leaders to gain from my experience and for it to be written so well that even my grandchildren can read and enjoy it.
Dr. Adizes: During your tenure, the company grew from $17 million to $10 billion in revenues. What were the causes for this successful growth? What do you attribute your success to?
Jim Morgan: We focused on innovating new products that would meet global customer needs and were early to new markets like Japan, Taiwan, Korea and China. We attracted very capable people, like Dan Maydan who eventually became the company president. Three major factors: great people, new markets, and new products.
Dr. Adizes: New products, new markets, and even the recruitment of excellent new people do not happen by themselves. Why did it happen at Applied Material?
Jim Morgan: It was the company culture of being close to the client. Very close. So, we always knew what their needs were and we worked hard to satisfy them. Thus, new markets. Thus, new products. And, that meant that we knew which people with which capabilities we needed.
Dr. Adizes: Having been your consultant for twenty years allows me to give you my insight into why you were able to attract good people and why you were close to the client and thus able to innovate what the market wanted. It might not be in your book because it is difficult to see the picture when you are in the picture.
Jim Morgan: Yes, tell me.
Dr. Adizes: It is your style, Jim. You allowed people to be free to think and to lead. You gave people space. The company was not top-down driven. On the contrary, it was bottom-up driven. Clients drove the sales people who drove the R&D which drove production. Dan Maydan was the same: very open-minded. And this climate of openness attracted people who were innovative and entrepreneurial. Furthermore, with my involvement, we almost annually restructured the company as it was growing so that decentralization could be implemented and sustainable. And it was. Thus, the good people came and stayed. Thus, the closeness to the client. Thus, the innovation. Thus, the success.
Jim Morgan: Yes. We insisted on decentralization, and the book I authored makes points on delegation and decentralization.
Dr. Adizes: What is the worst decision you have made?
Jim Morgan: Getting into the implant business.
Dr. Adizes: What was wrong?
Jim Morgan: The company had a good product when we bought it. But it did not succeed in its subsequent products, and it never became number one in its industry.
Dr. Adizes: Why did this division fail with new products?
Jim Morgan: They were not close to the market like the rest of the company. They were in England, and our culture did not get transmitted to them as well.
Dr. Adizes: Adizes was with you all the way, for twenty-some-odd years. What was it that Adizes did for you or for the company that made it worth holding on to?
Jim Morgan: Adizes was instrumental in leading the ongoing decentralization of the company by continuously working on restructuring. And, Adizes knew how to handle different cultures and teach the executives from different nation how to listen to each other and work as a team. Applied Material was like a United Nations in its top management: Indian, Iranian, Israeli, Argentinian, etc. You helped unite them and taught them how to work together in spite of their different cultural backgrounds.
Also, you taught us how to make the changes without losing alignment. To change a culture, you need to change structures and to change the process which will change the people and eventually the culture.
Dr. Adizes: Growing from $17 million to $10 billion through continuous reorganization and restructuring means a lot of change. How did you, as the CEO, handle those who were resisting change. You and I know who they were.
Jim Morgan: By never getting involved in the politics of the company. By always following what is strategically and functionally right for the company long-term and steering away from politics. We developed a culture that is included in Applied Wisdom: bad news is good news….. if you do something about it!! Dan and I could not remember a time bad news got to the Board, Wall Street, or the press that we did not know about.
Dr. Adizes: You had a very good Board of Directors. What are your guidelines for building the board and managing it?
Jim Morgan: I wanted competence on the board with a diversity of knowledge and of styles. We had equity fund managers, people from the industry, leaders from the accounting profession, etc. And I always worked to ensure that they would not be surprised but instead fully knowledgeable about the company’s problems and affairs. Board members should help think about solutions to problems, not be there to just cheer on the CEO.
Dr. Adizes: You retired…..
Jim Morgan: At 65, I stepped down as CEO after we hired Mike Splinter from Intel. He had a ten-year run until he retired. These were a tough ten years because the whole industry was in a downturn. But, he kept it going. Today, under the leadership of CEO Gary Dickerson, it is a $15 billion company setting new records and celebrating fifty years of global innovation.
Dr. Adizes: Thank you, Jim. It was a pleasure working with you, and it was a pleasure reading your book. I am sure future readers will find it fascinating.
Jim Morgan: Good talking to you, Ichak. Come see me when in the Silicon Valley.
1) Applied Material (AMAT) is the leading company in the world in manufacturing wafer-producing equipment. Those wafers produce the chips that drive computers. AMAT byline: "The information highway starts here.” AMAT has been a client of Adizes Methodology for over twenty years, starting when the company was at $400 million in sales. The service was discontinued when a new CEO came aboard. At that time, the company was ten billion in sales.
2) Morgan, J. C., & Hamilton, J. O. (2016). Applied Wisdom: Bad News Is Good News and Other Insights That Can Help Anyone Be a Better Manager. Los Altos, CA: Chandler Jordan Publishing.