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Principled Leadership: Q&A with Stephen Newberry
Lam Research Chairman to Serve as Executive-in-Residence

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A veteran Silicon Valley semiconductor industry leader, Stephen Newberry has more than 30 years of management and executive experience at Lam Research Corp. and before that at Applied Materials. Newberry is chairman of the board of directors of Lam, having served as CEO, COO, executive vice president and president since he joined the firm in 1997.

Newberry is deeply involved with the UC Davis Graduate School of Management. He serves as a key advisor on the Dean’s Advisory Cabinet. He has been a keynote speaker at commencement and addressed the School’s community as a Dean’s Distinguished Speaker. He also has presented to UC Davis MBA students several times on the topic of leadership as part of the Lam Research Leadership Skills Series. With his wife, Shelley A. Newberry, he has endowed the Stephen G. Newberry Endowed Chair in Leadership and the Stephen G. & Shelley A. Newberry Distinguished Student Fellowship that supports students who have great potential as team leaders in business. In 2012, Dean Steven Currall presented Newberry with the Dean’s Distinguished Service Award.

This spring he will serve as the 2014 Robert A. Fox Executive-in-Residence and will teach an MBA course on leadership.

We sat down with him to talk about his course, his experience and what principled leadership means to him and should mean to today’s business students.

Tell us about your plans for your Executive-in-Residence course.

We’ve been talking about it for years, back when I was CEO of Lam Research. Then I stepped down the first of January of 2012 and we started thinking about what would be the right time frame. So I’ve delivered a couple of values-based leadership programs here over the years. So we thought: let’s start thinking about building a curriculum course around that. I’m excited about having an opportunity to interact with the students and share with them the experiences that I’ve had in my career based on what they’re interested in.

What do you hope MBA students will come away with from your course?

What I would like them to come away with is that they understand that operating with a set of values that are meaningful to them and to the people they work with—and making sure that their behaviors are consistent with that—has tremendous value in the workplace. People want it and they want to work for people that they can respect. The second thing that I want them to come away with is that as a leader, you can be as technically competent, you can be as intelligent as you want to be, but the key to your success is going to be about how you take those skills and develop the right relationship skills and be able to apply them very versatilely. And we’re going to take students through a couple of leadership models that talk about social styles and applying leadership techniques in situations.

So I want the students to come away with a really strong recognition that the age-old thing “I’m the boss, so adjust to me,” is not the way it works. As the boss, the more that you can adjust to what your people need in order to optimize their ability to be successful, the better officer you’re going to be, the better leader you’re going to be. So if they walk away understanding some of those principles, that’ll be great.”

And then the last thing is that I want them to understand what it takes to change a culture. I want to take them through the case study of what we did at Lam Research and how we created our mission, our vision, our core values, our business fundamentals. And what were the things that we had to do to actually get it embedded in the culture of the company, to actually change the culture, and what level of investment you had to be prepared to make if you’re in a situation where you have a chance to be able to change a culture, or you have the responsibility to change a culture. So if they can walk away with those three things, I’ll be very pleased.

How do you think you will benefit from teaching the course?

I know I’ll get a lot out of it because we’re dealing with young people who are very motivated, very intelligent, very well read. They will ask me all kinds of really interesting and challenging questions, and I will have an opportunity to learn from them about how they think about things. Because I think that as a leader you constantly have to understand how what you’re doing is effectively resonating with people. And when you’re dealing with a different generation, every 20 years we’ll say it’s a generation, so these students are 1 ½-2 generations behind me. It’s important for me, how do young people think today? What matters to them? Why does it matter to them? How does that relate to what leaders need to be thinking about? So I’ll learn, and then in the course of that I’ll hopefully also teach them what the leadership group that they’re going to be dealing with, who is largely going to be in their mid-40’s to mid-60’s, depending upon what they are. They’re a generation different, so maybe we’ll each learn a little bit about how the generations think about things today.

What does the idea of “Principled Leadership” mean to you?

It’s not some narrow definition. Actually, it means a lot of different things to a lot of different people. To me, principled means that you must develop a set of philosophies, a set of beliefs, a set of behaviors that emanate from values. So ultimately, what students are going to go through is a process by which they’re going to learn a lot about who they are. They’re going to learn a lot about some things that they should either be or aspire to be that relate to ethical behavior, values-based behavior.

When you bring it all together in the totality, the concept of principled leadership is that you operate to a set of values and philosophies that are those kinds of activities that generate trust, that earn trust, that people will respect and people will follow. And as a function of that, it’s the foundation by which you can create positive change.”

Who are or were your heroes and mentors?

Yes, it’s an interesting question. For me it started when I grew up. My father was a high school teacher; then he was a principal of a high school and a very principled person. I grew up with clear expectations on the part of my parents of honesty and integrity and accountability. If you make mistakes you own up to and you deal with consequences if that’s appropriate, and they were very consistent with that. My father at one point in the course of his job—he worked in San Francisco and it was a little bit politicized—they wanted him to go do something that was, in his opinion, wrong relative to the charter of the school he was the head of and he refused to do it. And they said, “If you don’t do it then we’re going to put you back as a teacher and transfer you to some lousy school in San Francisco.” And he said, “You can do whatever you want to, but I’m not doing it.” That’s principled behavior in action. It’s easy to talk about that you’re going to stand for something and then when somebody tells you that you have to compromise it, a lot of people will rationalize the compromise as, well, they forced me.

What I try to teach people is that nobody can force you to give up your integrity. It’s a choice you make. And if you make it, you will have to live with that.”

And the choice he made was wasn’t going to compromise his integrity and I saw that in action so that obviously had a big impact on me because he lived it. And so then when I went to the Naval Academy so I had a chance to meet some really outstanding leaders as officers. No one person really stood out.

One that I studied that I have a lot of respect for is Teddy Roosevelt. One, I’m a really outdoor person. He was a naturalist, he was a conservationist. He lived and participated in nature. As we all know, he traveled all over the world doing some pretty crazy adventures. But as a president, I think he also understood what it means to be what he called in one of his speeches “in the arena.” He talks about it’s not the critic who counts. All the credit needs to go to those who are willing to put themselves into the arena in an effort to accomplish great deeds. But in the course of doing that there will be failure and you can’t be afraid of failure because unless you’re willing to fail you’ll never know the glory of great achievement. And that the world needs to respect those who have been willing to step into the arena and don’t ever be one of those cold and timid souls who shall never know victory or defeat. I’m paraphrasing a very famous speech he gave to the Sorbonne in France. But it became an operating philosophy for me in my life.

You step into the arena, be in pursuit of great things. Don’t be afraid to fail. When you do, pick yourself up and try again, but just make sure you’re not a cold and timid soul who will never know victory nor defeat. I tried to teach that to my kids. So Teddy Roosevelt from that standpoint was very influential.”

And in the business world, a colleague that I worked with for almost 30 years was the CEO at Lam before I took over as CEO. He was the chief operating officer at Applied Materials, where I spent 17 years. He was a tremendous mentor and a person of absolute integrity and was the perfect example of when you combine competency with character and good things happen around those kinds of people. And good things certainly happened to the companies that he ran and good things happened to the people, and good things certainly happened to me. So again, I was fortunate with my father who was a living example of what I think you should aspire to, but then spending 30 years working for someone who was a living example of a values-based person.

Let’s switch gears, how do we map the challenges the business world is facing now to our MBA students and what do we need to be giving them in the classroom and outside the classroom to have them be able to help meet those challenges?

That’s one of the things that Dean Currall and I were talking about: the customer of the business school is really the business world. So I think that businesses need people who are open to really trying to understand what is needed in whatever marketplace they are operating in and as appropriate they possess the analytical skills and the problem solving skills with which to come up with a good answer or a good option, but then they have to have the courage to be willing to make a decision to implement something new. That’s not something that is new, that’s something that businesses always need.

Big businesses, in particular, need more leadership and less management. Management is essential. Management is about those things that you must be doing to create predictable results, so it’s about control systems. But leadership is about what you do to create positive change.”

Now we all know that leadership can be used to create many things, so that’s why I always emphasize positive change. Business schools need to be producing people whose exposure to and opportunity to practice and learn leadership is as a stronger part of the curriculum than the management training.  So Dean Currall and Dean Biggart before him, we have talked a lot about how we provide that for the students.

But corporations in a global world face significant amounts of competition and I think that corporations are doing a pretty good job of figuring out how to allow or enable the corporation to be successful, but they haven’t figured out how that success should be achieved within a responsibility to community or nation. Now, a lot of corporations are global, so they may be headquartered in the United States, they may have facilities in the United States, but they may have operations everywhere in the world.

So one of the questions becomes: does a corporation have any level of responsibility to create jobs in the community, create jobs that are in the nation’s economic interest, or is it agnostic, it doesn’t really care? It goes wherever it needs to be successful. But I think we’ve been in an era where it goes to wherever it needs to be successful. I think that may need to be something that changes, at least in this country, because the number of manufacturing jobs in this country has shrunk dramatically, the middle class standard of living is declining, and you can point to a lot of loss of those well paying manufacturing jobs. And so again, I think we need to have a debate about corporations and their responsibilities to communities and the economic health of a given environment, not just their own economic benefit. So tough discussion because there’s no easy answer per se, but I think it’s a big issue.

What about leaders–are they born leaders or can you train them?

To me, it’s both.

You absolutely can teach people to be better leaders, but you can’t teach everything that goes into the leadership equation. “

You can tell people that they need to be able to read people. They need to be able to stand in somebody else’s shoes. They need to have emotional intelligence. Fine. It doesn’t mean that you will be able to actually operate with emotional intelligence.

Communication is really important. Some people are good communicators, some people are not. Can you help people become better? Yes. Can you teach them to be great? Probably not, you’re going to take a really good one and you’re going to make him great. You’re not going to take a lousy one and make him great. So timing. How do you teach timing? How do you teach projection of body language?

So those are intangibles that when you add up it’s what a highly effective leader brings to the party. The best leaders don’t bring all of them, but the best leaders bring something unique about them that separates them and differentiates them and creates the value that the organization needs or the people see and they accept. So I’ve seen a lot of examples where you take a lot of raw material that’s really, really good and you can make them great. And I’ve seen some people who have really, really thin raw material and you can maybe make them functional. And so that’s good for them to become functional, but I think sometimes we set expectations, gee if you go get an MBA, the sky’s the limit. Well, it’s just another tool, it’s another set of skills. But it’s going to take a whole bunch of other things in order to optimize your career success.

Now, having said that, an appropriate question is what’s the definition of career success? And it’s not necessarily that you be a CEO. There are different definitions of success, but I do think the more versatile, the more things a leader can bring to the situation, the better chance they have to be successful.

And if you were going to build a business school from the ground up, would you do anything different than what’s out there today?

One of the things I tinker around with is the idea of a Graduate School of Leadership or Leadership and Management. Of course I know that’s a super radical idea in academia, but you’re seeing more and more business schools are bringing leadership and teaching leadership from an academic theoretical perspective that offers some value. What really has value is the practical leadership. And what goes on here at UC Davis, they form teams, they make them produce work products in teams, they have to select leaders, they rotate leaders. They have to learn how to become a good peer. They get evaluated on their leadership.

So if I was building a graduate school, I would call it Leadership and Management. I would definitely teach management skills, but I would have it equal if not a greater emphasis on leadership skills because when you go out into the business world, leadership skills will be what separates you as opposed to your management skills.”

I think I can produce a better product for businesses if I do the leadership element with excellence. And that’s why I’m here because we’re absolutely working on that here at this graduate school…the one you call the GSM.

 

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