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Put the Customer First and the Money Will Come

Put the Customer First and the Money Will Come

In 2008, things were looking grim for the once successful Silicon Valley electronic design automation software and engineering services company, Cadence. In order for the company to succeed, it had to be both tuned into and ahead of its customers' needs. ‘Market Shaping Customers’ is a key phrase that took on meaning when CEO, Lip-Bu Tan took over the reigns.

Nimish Modi, senior VP of marketing and business development, spent eighteen years in R&D at Intel before joining Cadence in 2006. He says, “We led with the market-shaping customers as they are at the bleeding edge of innovation and constantly pushing the technology envelope. They are the most demanding and set the tone for our solutions. And, ultimately, this results in solutions that benefit all of our customers. We have to deliver significant and sustained differentiation for customers to bear the transition cost of switching to our solutions. You need to win their mind share first, then market share will follow.”

To ensure a strong customer focus, Cadence introduced a customer scorecard, allowing customers to directly critique Cadence’s products to Tan and the executive staff, which initially shocked some customers. Surprisingly, in an industry where customers spend millions each year on design software, few customers are asked for more than superficial feedback and even fewer receive a response. A former customer before joining Cadence, Modi notes, “It’s important that we get feedback from R&D leads at our customer companies. We can then promptly act on any issues, and there’s transparency and communication, all the way up to the high levels on both sides. Our goal is to not just satisfy, but delight our customers.” 

Business unit heads set the meeting agendas where junior and senior engineers hash out algorithms, product development issues, customer concerns and timelines. While unusual for a CEO, Tan regularly attends these technical talks and spends time preparing in advance. Tan reviews the scorecards and the Cadence teams track how they’re doing internally. Then Tan meets again with the customer’s senior management, updates them on progress and asks for further feedback. Again, this level of engagement between a CEO, employees and customers is unusual, but Tan considers it to be part of his transparent and vulnerable approach.

“In the beginning, we got some very poor scores from customers. It was very humbling,” says Tan. “They gave us poor marks and we asked them to come in and present to us. I asked them to not give up and work with us, promising leadership support. While negative scores allow us to grow, positive scores are great as well because when customers give an A, it's a pat on the shoulder from the customer directly and not just from me.”

The strength of Cadence’s ‘Customer First’ culture is demonstrated by data from the Great Place to Work’s Trust Index Employee Survey. Among Cadence employees, 92 percent say management is honest and ethical in its business practice and it has consistently stayed at that level for the last five years. 86 percent of Cadence employees say that their customers would rate the service they deliver as “excellent” and 91 percent say that people at Cadence are willing to give extra to get the job done. GPTW’s analysis finds that employees’ belief in Cadence’s credibility is equally high, regardless of department, rank, length of tenure, age group, gender, race, sexual preference or geography. ‘Customer First’ has inspired a positive attitude across all types of employees, which is an exemplary outcome of ‘For All’ Leadership.

For the full story, read Cadence and The Culture Cure today.


Ed Frauenheim