Aart de Geus: Founder and Executive Chair of Synopsys

Hey, thank you for being here. Thank you for inviting me into your recording studio. This is so cool.

Perfect.

Well, I try whenever I'm home to at least play 15 minutes or so. You know, if you come super charged from work, nothing better than being able to crank a guitar up a bit and the stress comes down, but I wish I could play way more.

Yeah, we have a band, Legally Blue, and we do about a dozen gigs per year or so. But the gigs are like two and a half hours, two times an hour, 15 minutes, which is a lot of material to actually get on top of.

Oh, a lot of things are outdoors. And you know, some of our favorites are, for example, in Sunnyvale they close Main Street and then they put tables so people can eat there and a stage and then we play the evening.

Yeah, it's really cool.

That long? Really? Okay.

Yeah. I was thinking kindergarten, but okay. Yeah, that's fine.

Oh, yeah.

Well, some of that material has come back to me, so it's cool.

No, because... no because... okay. No. All right.

Yeah, you know actually it started I think 2017, 18. I had noticed that the company had become more stodgy and maybe the reality is I had become more stodgy. And oh yes, yeah, no, no, no, it's very easy to become more no-change oriented. And essentially we were doing fine but our profitability had not really grown and so somehow it occurred to me that there were so many reasons that we couldn't do this, no because, because, because, and so on. And suddenly one day I realized, hey, we have an enemy, it's 'no because', and what's our friend? 'Yes if'. And you know, the 'ifs' and the 'causes' are actually sort of the same. But the mindset change to go to a 'yes if' from a 'no because' is actually extremely fundamental because it opens doors whereas every 'no because' essentially closes them. And so I sort of announced to the company that I'm going to try to do this change. It sounded a little bit esoteric maybe, but then for the entire 2019 I did tours and roundtables with small groups of employees in front of let's say 100 or 200 other employees. And I would pick people that were sort of lower middle management but that had a little spark. And essentially asked them, hey, what do you think of this? And it was completely improvised, there was nothing to read or so. And very quickly it started to take some form. And I knew the first little success was when somebody reported, hey, you know, I talked with my kids at dinner about it and they got it immediately and they also immediately diagnosed us the parents as being so 'no because'. And kids are like that of course because kids are open-minded to many, many ideas. And from there it moved forward pretty quickly. Maybe the second moment that I knew we had something was when somebody, one of it was a young lady, a young manager who was in one of those groups of three or four people, and she reported that oh, they had a group meeting on some project that didn't go anywhere and it wasn't this didn't work and that didn't work and they were completely stuck. And she said, and I know that when she told me that she was a little insecure if she could do that, she said, well, and then somebody at the table said, 'Let's try this stupid Art thing.' You know, that's that 'yes if'. And she said, 'Exactly.' I loved it because a, it showed that she had courage for starters. But more importantly what she said afterwards is we tried it and suddenly the dynamics changed. And that's when I learned a lesson is that the 'no because' to 'yes if' transition is not just a personal thing or a project one, it is a group one because very often we are all stuck in our own 'no becausees' but when you tell somebody else on a 'yes if' basis the other person often can solve some of the 'ifs'. And that's when it started to take off.

There's a massive concrete example because we coupled it with what we called at that time the rule of 40. And the rule of 40 was the addition of the growth rate of revenue and the profitability. And we were well below 40 and said, oh, we're going to move in that direction, which is a very measurable thing. And if you look at our results starting literally in 2019 you can see a break in the curve of profitability and align that for many years then continue to go up. And you know, of course this was the work of many, many people that all had their own 'yes if' change vectors to execute on. But that mindset change for me it turned into an insight that I've had the opportunity to use with so many people. And by the way, you know, I meet a very 'no because' person almost every day.

And there the guy is with yet another set of 'no because'. I've somewhat learned to say, no, no, today I'm going to be 'yes'. I'll figure it out.

Practice what you preach. And preaching is, you know, it's really role model ultimately. Right.

It very much applies because when you are a CEO as you know there are so many things that are fundamentally conflicting in urgency, in importance, in who to deal with, in what decisions to make. And consistently asking oneself the question is what is actually between the 'yes' and the 'if'. Yes, we can do this if... and by the way it's not just 'if', right, it's 'if, if, if, ever'. There's always a slew of those. And by daring to look a little bit more like a child towards the future, anything is possible. One actually comes in with an energy level that actually opens doors.

Now, especially in...

Yes. More than one meaning there.

Well, here too, you know, it's an old history in many ways. Partially because one of the great benefits I got by being early in Synopsys, other people actually essentially pushed and told me that caring for others in the community is actually important. You know, I grew up as parents that yeah, they would give some money to people but we were not, you know, we didn't have much money and it was not really learned, right. And suddenly I discovered as a CEO, you not only have the opportunity, but you also in my opinion have a necessity and a responsibility to look at the circles around the company, which initially were think such as simple as, you know, a Second Harvest in Silicon Valley. You know, the very fact that today there are many hundreds of thousands of people in Silicon Valley that have not enough to eat is a surprising situation. You would say and it was sort of a surprise to me too at that time. But out of that came sort of this notion of think beyond yourself. And I must have heard or coined this terminology of 'they who have the brains to understand should have the heart to help'. And that was really through all of these years became gradually a mantra because I saw here is this super intense industry, the high-tech industry and specifically of course in our case semiconductors, and actually there are a lot of brains and in all fairness for top leaders there's no time because we're sitting on this exponential of change that you need to constantly be on. And still if you have the brains you should do some helping. And so I used that within the company and it's then years later that I realized there was also other force fields and we have seen this in the last seven, eight years in the global situation that suddenly there's scary things happening around us and then suddenly it becomes well you should also have the courage to act. And courage has to come with some wisdom. There's no point in sort of making some claims and then be shut down or so. But it is necessary for people that have this fantastic responsibility of leading a company or an organization to say, you know, we think for the long term, we think broader than ourselves.

We do. And you know, over time obviously Synopsys has done well, therefore we have done well as a family. And there too, you know, philanthropy over time becomes important to actually realize there are many, many, many great causes. The question is, and I think one should give broadly but at the same time if you have the opportunity to give more or even participate in certain things it's useful to understand which ones will have the biggest long-term impact. And therefore it's also useful to understand who are the leaders and how do they act. Because you know, leading an NGO, a non-government organization, is a really tough job and I can tell you I've met some people that are just extraordinarily good.

In a milder form. Early on actually I took both of our young daughters at that time to a distribution of food of Second Harvest. And what they saw, they were very quiet afterwards because it was I think one of those moments of realizing, oh yeah, there are other challenges in the world. The training is not over for our children who are adults now because over time they have to participate more and they will and they're learning well.

Yeah, I remember that. And it's quite a while ago because my thinking has evolved a little bit because I realize often people are very stressed when they have to speak up in an environment that has maybe other great people and so on. So there's a reason they remember only what they said because that's the highest intensity moment. I would add something to that now which is that in any group, and that includes the two of us, the listening part is just as important. And then the third thing is can you make the other person feel an inch taller by the time the meeting is over. And you know, in music and sometimes jazz gets stereotyped too and you hear sentences like, you know, really work well on the silences. What the hell does that mean? Well, actually listening in a band is a fantastic thing and it's just as hard because you know, I'm concentrated on making sure I make no mistakes and while I do that I'm not listening to the other band members. But when I'm relaxed enough so that I'm not worried about my own mistakes and let's say for argument's sake I'll put you as the drummer and suddenly you do a little thing and I hear that, the organ player picks up that same little accent. Suddenly everybody wakes up and if then I can do something that increases that accent now suddenly the band is cruising, right, call it being in the pocket. And that means suddenly you're together. And whenever you can do that in a meeting, and again 'yes if' works with that because solving a bad 'if' is a really big 'yes'. And if it's clear that, you know, we solved it together. I brought up a problem. I really didn't know what to do. And you say, 'Yeah, but go left instead of right.' And suddenly it's, 'Oh, wow. I hadn't thought about that.' The very fact that I recognize that you just gave me a little gift is a gift back to you, right? And so the dynamics of groups can be so improved if one were just a better listener. And you know, note to self: become still a better listener.

Yeah. And do listen and then do something with it that makes Bob Pepper proud that he told you something.

Well, you know, that is an unbelievably broad topic, right? One of the characteristics that people don't often recognize is just the word perseverance. You know, I'm always surprised that somebody who maybe was not the super smart one, was not the super well-placed one, but who didn't give up actually became successful. And so perseverance is actually one of the key characteristics of being successful. Now, defining CEO by sort of the job attributes, I always start with the values and the foundation of the values is integrity. And integrity is a big, you know, three-syllable word, but it can be easily translated in 'do what you say and say what you do'. If you're there, you have the foundation of trust building. And sometimes what you do ends up not being so great and then you have to say that too, right? And so in my value pyramid that is absolutely the foundation. Now at the top I put something very different which is passion. The passion for what you do and probably that's also one of the reasons that gives people a drive to move forward. But passion is contagious and the people that have that and then can surround themselves with not only complement to themselves but also people that can build each other up is one of the characteristics that really great CEOs have. And you know earlier when you say, oh Art, you did this or that with the company, it is always 'we', it is always 'we'. And actually earlier didn't we not briefly discuss how important it is to have somebody who is a contrarian, right? Somebody who actually says, hey, real mirror here, you watch this thing here.

You're truth tellers. And there's some that are sort of always sort of on the 'no because' side but even that the skill is to take their 'because' thing and turn it in a positive 'if' and then do whatever 'yes we can' around that. But we all have limited capabilities. And so you become really who you surround yourself with. And if you're willing to have opposites or people that think more broadly or have different skills, they're a gift. They're absolutely fantastic gift.

Yeah. Yeah. You know, I always feel and still feel right now that I've been a fraud that I know so much less than I wish I had. I wish I had done some MBA. I wish I'd actually paid attention in engineering class. I wish I had spent more attention earlier to health. But at the same time can say, no, no, that's not a good attitude. This is old stuff that by being confronted in high responsibility or high leverage situations hopefully you learn how to do better. But I've heard from a number of other people that are very intense in their domain this notion of, you know, deep down I'm a fraud, you know, I'm faking it until I know how to do it for real. And you can also say, hey, that's the courage to do some bets, to try something.

Oh yeah, that's what it's called, right.

Are you an imposter?

So here's why I will argue that you're not. It has not much to do with education. It has not much to do with all these other skills. People may have other skills than you have or in some areas better in some areas not. But you have passion. You have passion for excellence. You have passions for learning, for improving things. That is what matters. That's what matters.

Not at least. That's a lot. There's a lot to have.