One-track mind Featured

7:00pm EDT January 26, 2010

When Patrick Lo was a child growing up in southern China during the height of the cultural revolution, his parents were in the labor camps, and he didn’t see them for years.

He dreamed of getting out of the country and seeing what else awaited him in the world, and through hard work and opportunities, he went on to eventually co-found NETGEAR Inc. in San Jose in 1996.

[See Smart Business Executive Editor Dustin Klein

talk with Lo on video about inventory and communication]

The computer networking company has evolved over the years, but despite its success, Lo remembers that feeling of helplessness in not knowing what else was out there or what opportunities he had. So he passionately wants to improve the quality of life for everyone on the planet by providing access to information through technology.

“All along, we absolutely believed that technology changes people’s lives around the world, and we’ve looked at how people’s lives around the world get changed with mobile phones and PCs,” the chairman and CEO says. “Every time these technologies change, they improve significantly the quality of life for everybody. We believed that the Internet did the same thing.”

Because of this belief, Lo and his team have been on a single mission: to put a NETGEAR box in every home and every office around the world so that people will be able to better their lives by connecting to the Internet. It sounds like a grand plan, but with the right approach and execution, it’s possible.

“Just last year, the number of Internet users in China has surpassed the U.S., so you can see the improvement of the quality of life in China and the openness of the country,” he says. “And things are starting to look up in India in the same way. More and more of the Indian people are starting to use the Internet to better their life, even in the villages. I think that’s really the right direction that we’ve pegged and chose.”

By focusing on this mission, NETGEAR’s net revenue has grown from $383.1 million in 2004 to $743.3 million in 2008.

In order to execute on your plan, you have to first set the mission, reinforce it throughout the company, and then hire managers who will buy in to it, as well. Here’s how Lo did it.

Set your mission

If you have a mission statement that’s a page long, nobody is going to remember it, let alone work toward carrying it out. When you set your mission, you have to keep it short. NETGEAR’s is just two sentences long.

“We purposely make the mission very simple, …” Lo says. “It’s easy for people to understand and remember that.”

On top of being simple, you have to absolutely be passionate about your mission.

“If you do not believe in it yourself, you won’t be able to sell it to other people,” he says. “You’re going to start with yourself and your co-founders or your management team, and let it permeate down so every employee will be able to sell that mission and abide by it every day. That’s very important, and if you find it very hard to sell that idea, you might be on the wrong thing.”

Your mission also needs to be something grand and exciting if you want people to share your passion in it.

“Take your time and find out the mission that is what we call noble and grand and is a long-lasting one,” Lo says. “That’s the only way to keep you going and keep the team going. You might not hit it in the first days, but after a few innings, you should be able to find one. If you’re down to the fifth inning, and you still don’t know yet, then you probably need to quit.”

Finding your mission in some fields may be more obvious, but if you’re not sure what the passion point in your business is, look at the bigger picture. For example, Lo says if you want to open a factory to manufacture clothes, it may seem like there’s nothing exciting there, but that’s not the case.

“You can say, ‘I’m going to prove to the rest of the world that the U.S. workers will be able to master skills and machineries and processes to make first-class garments that will be welcomed abroad and beat the Chinese,’” he says. “That’s a grand and noble mission. Or the reverse — you’re in China, and you open up a factory, and you say, ‘We’re going to build a factory that doesn’t just raise the level of craftsmanship but also the level of design that the garments produced in this factory will rival those coming out of France and Italy.’ That’s a noble mission.”

If you can’t find something that exciting to drive people’s competitive side, look at the very basics.

“Even at the very mundane — I’m opening a factory in Pakistan or wherever that will be able to make this the most efficient and low cost for producing, bar none, anywhere, anytime,” he says. “That’s good, too. No matter how mundane it is, you will be able to find something. The important thing is, what is the end result? The end result has to absolutely be that you make people’s lives better — either the customers’ or the workers’. If you don’t do that, it’s not going to last.”

Reinforce your mission

Everybody at NETGEAR knows what RINSPERC means. It’s not a competitor or new product. It’s an acronym and a slogan to help reinforce the mission, which is what you have to do after you establish it.

Each letter in the word represents another word that will help move the company toward achieving its mission. The R stands for revenue, the I for innovation, and so on. Every year or two, the management team comes up with a new slogan.

“It has to closely relate to your mission, and it has to closely relate to what you have to achieve for the next 12 months, and then make the slogan a simple word to remember,” Lo says.

The management team forecasts out over a 12- to 24-month time period to see what could happen in that time period, and as a response, what the company should do about it. Then Lo and his team boil it down to eight or nine things that they have to do, and it gets coined into the slogan. That slogan is on the intranet home page, and it’s repeated in every newsletter and quarterly meeting. On top of that, each employee’s annual goals are somehow tied into it.

“Revenue is more pertaining to the salespeople and the operations people,” Lo says. “Innovation is more pertained to the product marketing folks, so different people have different parts of the cascade of corporate objectives.”

Each person’s manager communicates his or her part at the beginning of the year, and every six months, each manager is evaluated. This helps keep people on track to achieving the mission.

On top of a slogan, you simply have to repeat your mission constantly. Lo goes through it in every training meeting, every quarterly meeting and in every weekly product meeting. During these product meetings, he also has questions that he asks of any initiative that people want to pursue, and those questions support the mission.

“Ever

y product is weighed against the same thing — does it make connection to the Internet cheaper, easier, faster? Does it enhance the quality of life for people? Does it serve the ultimate mission of letting Internet service the communications, entertainment, education for people’s lives?” he says. “That’s what we do all the time. If it doesn’t, we’re not going to do it.”

He also asks if the product will add value compared to what is already in the market or bring in a completely new product line to make people’s lives better, among other questions.

“It’s repeated again and again, and when we have all-hands meetings, I’ll pick people and ask people to answer those questions,” he says. “So it’s making sure people get repeatedly reminded.”

Lastly, remember that all of this starts and stops with you. Each year, Lo travels to every employee around the world and meets with them in groups of eight to 10 to explain the mission and its importance and see if they have questions.

“It’s very important to set a tone from the top, and we just have to practice it in every single thing that we do,” Lo says.

Hire believers

Whenever possible, Lo prefers to promote from within, but sometimes he has to hire executive team members from the outside. When that happens, the mission stays front and center there, too.

“If they don’t buy in to it, that means they’re not part of the team,” Lo says. “It’s as simple as that. We’re playing football here. If you come in here and sign up and say, ‘Football is not my game, I’d rather play ice hockey,’ that’s OK. Then go join another team. Join the ice hockey team, but here, we play football.”

To make sure he gets the right players, potential executives go through a rigorous interview process with between 10 and 15 different individual interviews.

“The first thing is to get those 10 or 15 interviewers to feel comfortable that this person’s personality will fit in to the culture of the company, and they will get a sense that this interviewee is getting excited about what we do here,” he says.

Lo has no qualms about hiring someone without the technical experience if he thinks that he or she will fit culturally.

“You can’t change somebody’s personality and cultural orientation, so it’s important for us to find the cultural fit into the executive team — more important than the technical experience or prior field experience without training,” he says.

He doesn’t tell people what to ask in the interviews, but he says some questions help get to the heart of a person, such as, “Why are you interested in what we do, what do you think is the next step that this company should take to further its success, how do you measure yourself in terms of judging whether you’re successful or not, and what do you want to do next?”

With the same kinds of questions coming at a potential executive from 10 to 15 people separately, it sends a strong signal to that person.

“Every executive who has gone through those interviews, they’re surprised how unified the message is that he or she is getting from everyone on the executive team,” Lo says. “It’s repeating again, again, again.”

And when your message is repeated and unified, it helps job candidates know what they’re getting into.

“Very rarely would we have group interviews so we can have them say, ‘Gee, even though I talked to them individually, how come all 15 of them give me the same message?’ It doesn’t look like it’s cooked up,” he says.

This creates a mutual understanding of each other.

Following the interviews, Lo then talks with the interviewers individually so that they don’t influence each other.

“I’ll just ask them, ‘What do you think is the strength of this interviewee, and what do you think is the No. 1 challenge this interviewee will have if he or she joins us?’” Lo says. “Then we group those things together and come up with all the strengths and weaknesses that people see, and then I will ask everyone to rate if someone is an absolute hire, a maybe or an absolute nonhire.”

If he can continue to do these things, then Lo will get more and more people who are completely sold on his mission, which will propel NETGEAR forward in the future.

“The most important thing is they have to buy in to it and be passionate about what we do,” Lo says. “If they’re interested in really, really excelling to help people connect to the Internet to better their lives and they’re compassionate about doing this better than our competitors, they will fit in. But if not or they’re here looking for a career to climb up further on the ladder or to learn something so they can do bigger and better jobs, then they will most likely not fit in.”

How to reach: NETGEAR Inc., (408) 907-8000 or www.netgear.com

Story feedback: Kristy O’Hara, kohara@sbnonline.com