Thomas R. Brown

Transcript

- Good advice from all fronts. You know, we benefit in the State of Arizona from the presence of a number of powerful, large high tech company. Many of them represented here in this room, Honeywell, Raytheon,

Motorola, IBM, long list, AOL. Now most recently Texas Instruments. But none of these companies was born and bred in Arizona. We have had our entrepreneurs of course, but their successes have

been mostly in agriculture, land development, and natural resources, and the media, advertising, hospitality industry, but not in the high tech arena, but there's an exception. And if you look throughout the history of the State of Arizona for an entrepreneur who has built his high tech company successfully in the State of Arizona, one man stands out, and that's Tom Brown.

The man whom we recognize with our Premier Award today. Tom grew up in Longview, Texas. As a child, he not only loved to build things, he loved to manufacture things.

That's more unusual. He never wanted to build just one. He wanted to replicate a success and build 10 or 20, an early sign of his career inclinations. At age 16, he enrolled

in engineering at MIT, isn't that impressive? Well, it turned out he was a bit too young and too green, and as they say, he rolled out of there, just as quick as he rolled in. And went to the Navy. And it's in the Navy that Tom Brown began his education in electronics. After World War II, he talked his way back into MIT, where he earned General

Engineering degree in 1949. Began teaching, he soon figured out what I have to tell him it's still true, and that is that the head of electrical engineering doesn't make as much money as a career startup in technical work today.

Teachers don't get paid paid well. And so he had abandoned that career for the world of business. And what better way to start preparing yourself for that task than the Harvard Business School? Where in 1952, he completed an MBA.

Tom Brown and his partner, Page Burr founded Burr-Brown Corporation in Tucson in 1956. Just a few years out of his MBA. It was a partnership based on their mutual admiration for an astounding new

device, the transistor. And their equally astounding discovery that virtually no electronic instruments in that day were being built with transistors. His partner describes Tom as an Edisonian engineer.

And I think we know what that means, a perfectionist who succeeds through repeated efforts to get it right. The company struggled initially, and Brown paid himself no salary for the first three years. Until in 1959, the company showed its first profit.

He eventually bought out his partner, and in 1983, Burr-Brown went public. Tom Brown dabbled with semi-retirement in 1976, when at age 50, he stepped down as head of day to day operations. However, challenges that

the company was facing brought him out of retirement in 1993, when at age 66, he returned as president and CEO. His most recent retirement was in April of 1998. In August of 2000, and Texas Instruments acquired Burr-Brown in a stock

deal valued at $7.6 billion. It's the largest acquisition ever in the semiconductor industry, and the largest corporate merger in Arizona State history. For over 40 years, Burr-Brown has been an ever present force in the economic wellbeing of Tucson.

By the strength of its products, and its international reach, it's now brought Texas Instruments into the portfolio of companies that drive Tucson's and Arizona's economy. Over that same period, Tom Brown has worked with almost religious fervor to improve the quality of life for those who call Tucson home. He's used his talents to address problems of local and regional transportation, tax reforms, school finance, airline services into Tucson, and mental health care.

To the name just a few of the areas of his concern. It is for all these reasons, and for many more that we honor Tom Brown as the 2001 Technology Executive of the Year, Tom Brown. (audience applauds) - Here's the deal.

This event will be over minus five minutes ago. But a story comes to mind. And I want to give you a choice. I'm gonna tell you, I think, an amazing story about the convergence of engineering management and serendipity.

You should feel free to leave whenever you have to leave, or whenever you want to leave. But I'm gonna continue until I finish the story. (audience applauds) I want to show you a vacuum tube.

A vacuum tube is what all electronic equipment was made using in the 1950s and later on. When the transistor came along, which is represented by one of these tiny little chips, that represented windfall change, a watershed change in what was gonna happen in electronics.

Now I've done some awful dumb things in my career. I want to tell you about some of 'em. First of all, I thought that you didn't have to go to class in order to graduate from college.

(audience laughing) I thought at the time of graduation, though I was somewhat of a civil engineer, that we had enough roads in this country, and we didn't need any more roads, particularly in Connecticut. But that was the very beginning of the interstate highway system. I didn't see that coming. (audience laughing) I started in Tucson in a residential construction company, and got fired, largely because I did not think anybody would

live East of Wilmot Road. (audience laughing) Which now over half of Tucson lives east of Wilmot Road. I never go there anymore. I had another brilliant idea that 20 years ago that we could fix all of our transportation problems if we would just absorb

25 cents a gallon gas tax in order to fund it. I did the analysis, it was conclusive. It was absolutely correct. And I thought all I had to do was go to the legislature and explain it to them,

and they would do it. They passed a 2 cent gas tax and told me to go back south of Nogales. (audience laughing) All these experiences came into play in what happened in Burr-Brown. This was our first product. Consists of batteries

and four transistors. That evolved over the years into smaller and smaller amplifiers, smaller, cheaper, better, more reliable, and cool. One of the big problems with vacuum tubes is they had no reliability, which meant that if you got a thousand of them together to make a computer, the

computer might run for an hour. And then one of the vacuum tubes would break and you'd shut the whole computer down. It was the reliability of the transistor that enabled all the new things that have happened in the last 50 years of which we all now take for granted.

Computers, handheld computers, all kinds of servo systems, to automatic pilots, to a CAT scan machine. All of that made possible because the transistor was small, could run on small voltage, and was so reliable that you could get thousands of them working for hundreds

of thousands of hours. But that was a big deal. Now I did one smart thing in my whole career. When Page Burr sent me that transistor, and I hooked it up, and

I saw what it would do. And I learned that nobody else was making any equipment, utilizing transistors, a light bulb turned on. Well, that was one hell of a good idea.

I stuck with that for the last 45 years. And we evolved our product, grew the company, learned a lot of things about management along the way, and by plagiarizing, and reading, going to university classes, and going to seminars, and so on. We had a director that joined us, wanted to buy the company

out in 1982 or something. Offered me $50,000 for, and I thought I would take it. But the Southern Arizona Bank encouraged me not to sell for that,

and to stick with it. We were still not making any money to speak of. So I convinced him to become one of my directors.

He was the most valuable director I think I ever had. His name was Walter Baird. He was a Founder and CEO of Baird-Atomic in Boston.

Baird-Atomic never did too well. Walter made an awful lot of mistakes. And he was willing to share those mistakes with me. One of the favorite stories I

remember from him was he says, "You've got to do your accounting right now. In my company, we don't use LIFO or FIFO to value inventory. We use FISH.

That's F-I-S-H, which stands for First In Still Here." (audience laughing) So picking up those tips along the way were very, were very helpful to me. Because one thing we had to do, we had to live within a discipline of engineering. We had to have good products. You could not avoid Ohm's Law.

And you had to understand feedback. In the management area, that's not quite so precise and rigorous. But there are a lot of principles and laws you've got to understand and make that work also. But after you've done all of that, if you heard from other people, you've got to have a heavy

input of serendipity, or luck. And we had a lot of that. And they got to make enough mistakes to get your humility factor where it belongs. And it can learn from that too.

The first 25 years was growing and it was fun. Everything was new. It was fun working in the kitchen sink, developing printed circuits, and in a closet for dark room, making a product that was shot to the moon on a ranger program.

First thing from the Earth to crash on the moon was a product that I held and worked on in my kitchen. Well, that's very fulfilling in a way. And everything was kinda like that.

Pick a new subject, any piece of equipment, we'll make it with transistors. We'll make it work. The next 15 years was more work. Not quite as much fun.

We were being overrun by the semiconductor industry. We had to get in it. We didn't have any money to get in it because it was a big capital investment. So we had to partner with

Motorola and Sprig Electric, and several other companies in order to get our foothold in semiconductors, which we eventually got our own, our own factory to do. Now, you take some of these semiconductors, and this, I think you can see 'em. Perhaps.

Every one of those little chips may have anywhere from 20 to 1,000 transistors in it. Now think of the impact of the cost and the size and heat that the transistor improved upon the old vacuum tube, which sat there and lit

up like Christmas trees. So hot you had to have a special house to run them in. Well, did you know, you probably don't even know what one looks like now, because I don't think anybody

used them for 30 or 40 years. So we had to have one break. I have just four or five things I'd like to say about the secret of success, if we have the secret.

You've got to have good engineering and products. And you've got to have good management. And to have those, you've got to get into an area that is a market that's

expanding and growing so much and so fast that it leaves room for a lot of mistakes for those in it. Management principle, they're pretty simple too. We had to have a, a good purpose, a noble purpose I called it. We wanted to do something, make something, for the benefit of mankind.

So did our product meet that? Did our product offer the best price to our customer for the performance we were selling? And could we build it at a cost less than that price? And could we continue to run and grow a business out of its own earnings? Which we pretty much did for the last 45 years, although we did become

publicly held in 1983, because we had to raise some money to get into the semiconductor world. Well, our products had to serve a real need. They had to have, or we had to have some unique competence in order to build them.

And we didn't need, nor do we have, an awful lot of competition. So it was a nice world to work in. We had a corporate culture that was very helpful too. And we did try to set clear, noble goals to attract and retain the

best of competent people. Earn a reputation for integrity and competence. Had to show a lot of respect for individuals that associated with a company.

We had to expect that everyone would act in their enlightened longterm self-interest. While I take credit for founding the company, I do not deserve the credit for its success.

The people deserving that credit were some 6,000 employees to pass through Burr-Brown over its history. 25,000 customers that helped us along the way, the University of Arizona, with its courses and its graduates. And its help from its faculty, going all the way back to Tom Martin, head of EE department there.

Granino Korn, the father of analog computing. That was really the operational amplifier, the heart of the engineering, and the products that we made. Our community helped

us lot, and the state. And we had a good environment, economic, to work and grow in. Those combinations of people helping us, are really deserved the success of Burr-Brown. Now, no one has left yet.

So it gives me a chance to tell a story that I heard from Jack Davis about a man who was a luncheon speaker, and prepared his long luncheon speech. And he gave it, and as he was giving it, he noticed people started getting up, and going, and leaving the room. And as he was nearing the end, he found there was only one person remaining in the room. And that was a man who was looking, sitting on the front edge of his chair, and looking very intently at the speaker.

Speaker finished, said, "Sir, I just have to ask you, what did you find so interesting about my speech?" And the man said, "I'm the next speaker." (audience laughing) (audience applauding) Well, Burr-Brown made a significant contribution, I think, to all of its stakeholders. We exported, exported our labor into foreign markets. Our market, by the way, was a third Asia, a third Europe, a third US.

They brought all that money back into the State of Arizona. Didn't let too much of it get away. So we helped the prosperity of the people of Arizona, in Tucson, made a major

impact and we've benefited all of our stakeholders I think. Burr-Brown has been my life, my vocation, my pleasure, my pastime, and it greatly exceeded my original expectations. And I wish any of you in a starting, or continuing position, the same degree of serendipity that Burr-Brown enjoyed and thank you all for listening.

And remember, there was once a place called Burr-Brown. Thank you. (audience applauding) - And that was fine about, thank God.