Louis Carter and Cadence CEO, Anirudh Devgan on Diversity as a Business Strategy

Hi everybody, welcome to the Most Loved Workplace Leaders Show. I'm Louis Carter, founder of Most Loved Workplace and CEO of Best Practice Institute. I am excited to be joined today with the president and CEO of Cadence Design Systems, Anuroth Devgan. Cadence, based in San Jose, California, has 9,300 employees around the world in 23 countries. Cadence generated $2.7 billion in revenue in 2020, and it's the 7th ranked company on our 2021 Most Loved Workplace list. Cadence was chosen as a Most Loved Workplace for several reasons, which we'll get into with Inerith today, but a big reason for their focus on diversity. For instance, an inclusion group for for underrepresented employees and their allies in the workplace to ensure employees can feel that their ideas and voices are being heard. We'll hear a lot more about that and many other things with Anurag now.

Yeah, hello, Louis. Thank you for hosting us. Great to be here.

So let me begin. And you're incoming CEO. You have this wonderful company that you're leading. Tell me more about how you place love at the center of your business strategy.

Louis, thank you for the question. You know, I think that what I would like to say is, and that's it, you know, there's a lot of things that go into love, but what I like to say is that, you know, we are in the technology business, okay? So we have to have innovation and best-in-class product, you know, and for that, the employee and our team is central, you know, because we are a software business It's not about, you know, we are not mining some natural resource or things like that. So it's the creativity of our team is the resource that produces the business results. And for that, we put the employee and our team at the center of making sure they are taken care of and empowered to deliver the results for us. And that's why we look at it more as a And when you make it like, you know, see what is best for the team and the talent and the employees, you have to look both at the career fulfillment, you know, the workplace, and also the personal fulfillment that goes with that. I think those both aspects has to be done for the team so that they feel empowered, they feel loved, and then they can deliver the best product and the best innovation that makes us win in the market.

Isn't it wonderful in that way that when they feel that love, they give that best foot forward, if you will, their best feet forward? Do you see—

Priceless. You know, it's priceless to, you know, motivated, loved employees generate amazing results.

They really do. And that's what all the research shows. That's what you've shown as being top of the, of the list and on our list. Is that, you know, when you have employees who feel love within their workplace, they're 3 to 4 times more likely to produce more and better than others. And you've seen this as well. Do you see this in your team and then others? And how does it manifest for you?

No, I think it's a great point, Louis Carter. And I think it manifests itself in a lot of ways. And the one prime way is that If the employees love the company and the company loves the employees and rewards them, it produces great products that makes us win in the marketplace and generate— you know, we are a public company, right? So we are in the business of also generating, you know, revenue and results for our customers. So if the employees are motivated, the employees are loved, it produces better business results for our customers. It also creates a, what we call a one team culture. So I think it creates more collaboration in the workplace and with our partners because teamwork is essential to success. Uh, and this one cadence, one team culture, we want to make sure people work well with each other. We also work well with our customers and ecosystem partners. Also, we contribute our fair share to the community. So we want to have this one team culture that is more collaborative. So innovation is critical, but collaboration is also critical for success. And that is also helped a lot by, by, by taking care of the employees and for them having more vested and interest and love for the workplace.

Let's talk about that. There's a lot you just said that was very important. And you identified your ecosystem.

Yes.

And all these wonderful people that are inside your ecosystem and also your product itself. And as you said, the one team culture, and it's not just the team, is it? It's customers, it's, it's vendors, it's people around the globe. Let's start with that. First, want to know more about the product, right? So we can connect to the customer. Tell me more about Cadence product and what it really is that people are connecting to.

Yeah, absolutely, Louis. So we, we love what we do. First of all, I love what we, what we do, and the reason is that we make a big difference in the world, I believe. So Cadence, you know, people may be less familiar with it, but at the bottom line, we are a B2B company, software company, that makes the software that makes electronics and silicon possible. So any silicon design or electronic system design is so complicated now, it has to be done with software. And we make this computational mathematical software that designs silicon and electronic systems. So our customers are all the who's who in the world of what you know in electronics and semiconductors. So anything that you're using in your day-to-day life, which is electronics, digital semiconductor, has been designed with the help of Cadence, our software, and our employees. So we can have a transformative effect and we have had over the last, you know, 20, 30 years, you can see the explosion of electronics in our lives. And going forward, there is a lot of things that are happening in the industry, you know, whether it is cloud or AI and 5G and data center. And we are critically involved in all these endeavors. And like I said earlier, it's also jointly with our customers and ecosystem partners. But the exciting thing for me is that it can make such a profound difference on the world in terms of reaching more people, in terms of reducing power consumption, and, you know, a green, you know, green effect on, on climate, of making people's lives easier. So I think that gives us a sense of purpose that we want to work together, uh, with the with our employees and our customers to make that happen. So that's in essence, Cadence is designing the software that is making all this electronics possible.

That phrase, designing the software that's making electronics possible, it's incredible how you said that. That is, you're enabling technologies throughout the world, really. And you're doing it, as you said, reducing power consumption. There's a larger purpose to what you're doing, connection to this larger good. And that must, that must excite everybody at Cadence.

And people, it's very exciting. And, you know, we are not like, we not typically B2C company. So we are business to business. So typically, we will not directly work with, you know, like, you know, the apps you use or the phones you use. But we are working with all those business companies for them to design these things. And, and also, we get a good view into the world of what is happening, because we work with multiple industries. And then all these big companies that you know about, these household companies that are doing, you know, electronics or semiconductors, I think again the key there is that they want us to give the best product, okay, because these are, you know, these are things that are transforming the world. And to give the best products, we need to have the best talent. And the talent, there is no Nobody has— talent is everywhere. Okay. So, and you know, and this is particularly true in software company, you know, the more talent you have, the results are exponentially better. So to have the right talent, we want to make sure we have a diverse workforce. We have workforce, of course, all over the world, but even within the US, the different communities, whether it's whatever backgrounds they have. Because the ideas come from everywhere. And we want to make sure that our innovation is grounded on the right talent and then the right reward for the talent.

Like that, the right talent and the right reward for the talent, and also focus on diversity. Because you're, you're, what I would assume is also your talent is mirroring your B2B as well. And you're becoming even closer to your ecosystem. As a result. So the love that people feel, collaboration that they have, the positive vision, the future that you have on Earth gives people that sense of sort of engagement and excitement for what they do on a daily basis.

Absolutely, Louis. I think so. I think the purpose is critical in any company mission, and then the purpose also has to be augmented by, like what I said before, the the career fulfillment and the personal fulfillment. So of course we want to set up policies at work. So for teamwork, for reward, for flexibility, you know, for the right, you know, benefits, but also give time for them to take care of their personal life. You know, and we have a lot of examples of how we have done that. So I think both parts to look at the team and the employees and our customers in a more holistic way than just, you know, this is what you're doing at work, this is what you're doing at home, because these things can have a big effect. We integrate what people care about from their career and personal standpoints together.

I like how you put those in two different categories, the career and the personal, and it's the work-life balance aspect. If you were to talk to incoming employees, because you're growing, you're doing wonderfully in the market, and so incoming people, the best talent, the right talent, and say, this is how we'll work with you to help your personal, this is how we'll work with you to help with your career. What would you say to them?

And I think we just, I think you just have to make sure, I think what I find people get motivated the most by, and this is what I, you know, did when I started, is I think what people want the most is is they want opportunities. You know, they want to make sure that they have equal opportunities to do well. And your, your career is determined by your performance and your value to the company and the community, rather than some artificial boundaries that are put up. So we want to make sure that we tell them in their career world, that if you do well, if you contribute to the company and the customers and the community, we will take care of you and contribute to your success. Okay, so I think the best thing for people to have a motivation without, without limit, or perceived limits which are artificial rather than, than based on their performance. Okay, so I think it's very important in the career side to have this kind of boundaries without limits, just based on your own performance. And on the personal side, I think we want to make sure we support them, you know, in terms of— I give you some examples, like even things like, you know, we do special benefits, uh, in, for example, fertility treatments. You know, people can have different things come up in their lives, so we want to make sure we have good benefits programs for, for, you know, uh, all kinds of— because there is always something everybody is dealing with in their personal life, okay? This is just a matter of fact of life. So we want to make sure we are, we are supportive to those individual cases, whatever they may be, and we be flexible to that. You know, we are also pretty flexible in terms of location. We have been pretty flexible in terms of COVID right? We have given them, you know, recharge days off because one of the problems of COVID is I think sometimes people are working too much. You know, you're at home and you're doing, you know, Zoom all day. So we have given like, you know, every 1 or 2 months we do like 1 or 2 days off so people can, you know, recharge themselves. So I think it's more important to look at it person as a whole and also make sure that they feel that if they do well in their work, they will be rewarded and then they can progress in their, in their professional career.

And those are, those are amazing things that you provide it from fertility treatments to, uh, 1-2 days to recharge. It's, it's like inviting, uh, work-life balance and saying we care about you as an individual, as an, as an employee, almost like family. Treat them like family, people that you— how you would treat yourself.

Because I think what happens is a lot of companies, you know, this I found from my own experience, you know, they will treat employees. And then they say, okay, how much am I spending? You know, what is my cost, right, of doing this program? And these programs do cost money, okay. And then they try to minimize cost Okay, I think that's not the right way. Of course, my opinion is if you spend the right cost, let's maximize revenue. Okay, so if the employees— if we give them the right benefits and then they are very productive, we can make more revenue. So you have to have the mindset of a growing pie rather than a shrinking pie. So it is not a cost, it is an investment in our people and the community. And then The return is in more revenue and growth rather than— so I think the focus has to be on growth rather than focus on cost. And it's more of an investment to drive growth rather than a cost that you want to minimize. So once you look at it that way, then of course we have some constraints on investments and we have to make the right investment. But if you do the right investment, the return can be high in terms of growth, in terms of innovation, in terms of teamwork.. And that's why, you know, that's what we try to do. Of course, we are not perfect. And, you know, there are things we can improve every day. But the focus has to be on growth and innovation.

I love how you said that, you know, you're looking at growth, not cost and shrinking, sort of, you know, we say fixed versus growth mindset, you and you look at that financially as well. We make the right investments for growth in people. And when you make the right ones, you have good business benefits. So it's the right thing to do. And it's good for business.

And Louis, if you look at our results over the last several years, our revenue is accelerating. You know, we are now growing double digits in revenue. And our margin is also improving. So both growth and profit have increased over the last 3, 4 years. So this— so it's not just a principle. We have demonstrated the results of that last several years.

So not only saying it conceptually, it's also taking charge and showing results.

This is absolutely the best thing I learned is that, you know, it's, it's not what you say, it's what you do, you know, because a lot of companies, a lot of people will say a lot of good things.. But in reality, you know, the results or the actual programs don't mirror that. And then people are smart enough to see through that. Okay, so we need to demonstrate. And I think that way I feel good that we have a good track record. Of course we can do even better. Okay, but I think we have a good track record in terms of actual financial growth. Also, you know, the other thing we focus on is is of course the customers and winning with the winners. So, you know, making sure that we are aligned with the top companies in the world, and we are done well there also. You know, we are working with all the key kind of customers in their segment, and that all is fueled by, you know, taking care of the employees. It's a technology business, right? We have to take care of our team and our ecosystem and community that will feed on Everything you've said resonates on so many different levels.

The first part is positivity. You said we can always do better, right? You don't hear that a lot from CEOs. You hear usually, you know, we're doing well, we'll stay the course, we'll keep what we're doing. You're saying there's always room to grow and always room to build even deeper relationships within your ecosystem. And you're constantly getting this kind of data back from people. And listening, and then rearranging, knowing what to do again, to, as you said, invest in that growth mindset. That's very— that's rare to see that, that positivity.

I think that's the only way to do it. I mean, I think, you know, the key to improvement is self-assessment. You know, I think what I found is like, a lot of people know what to do, but sometimes don't realize where they are. And that is true in human behavior, you know, and it's true in organizational behavior. So we want to be data-driven. We want to know where we are and always try to improve because I think otherwise there is, you know, there is, there is no way forward. So, and again, we are in this journey, you know, we are, we are still, we can do a lot of things better. We can improve. I'm sure you talk to employees, not everybody is happy with our program. If you talk to our customers, not everybody is happy with our product. So we have to continuously improve, and there is still a lot we can do.

Anurag, you said it all. You've said wonderful things today that resonate so much with me, and I know our community. I want to talk about you. For a moment, because, and what brought you to this place where you're at today and where, which is wonderful, where you're going to be CEO of Cadence. You were president of Cadence prior. And sort of what, what brought you this philosophy? How did you get to this philosophy of leadership, of leading with love, of positivity, of knowing that there's a growth, of having a growth mindset, investing in growth mindset? Where does, tell me where that came from in your background and the way that you grew in your career?

Well, that's a good question. I don't know, I think I was always like that. Now, I think for me, you know, you know, I have a PhD in computer science, right? And my dad is a professor of mathematics. So I think the education always was a key part, you know, and, you know, of course, ability, you know, I grew up in a, in a Professor household, so there's a lot of focus on ability, make sure you're good. So PhD was like minimum qualification in my family, so I wanted to get it done quickly, you know. But I think what a lot of times people forget with ability— and of course a lot of people are really smart and there are a lot of capable people— what I learned over the years is that innovation, you know, and drive And inspiration, you know, with ability is what makes the best. So a lot of people are talented, but they don't push themselves. And then sometimes people push themselves, but they may not be. So I think we want to set up a company or individual or organization in which, uh, you know, inspiration and ability go together, okay? You know, that you have— you can take chances but you also have a lot of deep knowledge. And this is what I try to do, and this is what we try to do in the company. So that, I think, the combination of, you know, doing new things and having solid grounding in your core skill, you know, you have to have a skill and then you have to have the drive. I think that naturally leads to a positive mindset. Because, you know, I think where people don't have positive mindset, if they don't have this, this inspiration or, you know, this drive. And sometimes in our teaching, you know, in our schools and all, I think there's a lot of focus on ability, which is critical, but there needs to be enough focus on drive. And that's what makes it happen.

Absolutely. That was wonderfully said. The whole, you know, skill and will, we need both, you know, and, and You have had both. It's funny, I like what you said, PhD was the minimum, right? So these expectations that you're already a doctorate. And in addition to that, you have a passion and drive, you know, and that shows in everything you do.

Like, when I graduated and I went to grad school, you know, graduated from undergrad, went to do my PhD, and my dad told me, okay, Just don't make money, okay? Do something useful in life, okay? Because a lot of time people see money as a secondary variable. The primary variable should be to do something meaningful and then you can make money. So that's why I think this drive and purpose has to be linked with ability. And I like how you say it, skill and will. That's a good one.

Keep it, keep it, steal it.

Yeah, I might use that one.

Oh, what a treat to talk to you, Anurag. I've really enjoyed you and our time together. And what a great time. And congratulations on getting the Most Loved Workplace certification and on the list in Newsweek. I hope this is the beginning of a long relationship where we learn from you and with you and for our community to certainly grow with you as well.

Oh, thank you, Louis Carter, and thank you for covering us. You know, we, we try to do good things, but it's good to get the exposure and the coverage to let— to tell our story. So thank you for that.