Vince Roche is the third CEO and second board chair to lead Analog Devices (ADI) since its founding in 1965. He began his career at ADI in 1988, progressively gaining responsibility over his tenure. Roche was promoted to president of ADI in 2012, appointed CEO in 2013, and elected chair in 2022.
McKinsey senior partners Abhijit Mahindroo and Asutosh Padhi sat down with Roche to discuss the lessons he has learned and his plans for the future. The following is an edited version of the conversation.
Asutosh Padhi: You have just completed a remarkable decade as the CEO of Analog Devices. What are you proudest of, and what has been the most interesting lesson you have learned as CEO?
Vince Roche: First, I can’t believe ten years have gone by. We’re a 58-year-old company, and we have stayed consistent with our core mission of leading our value creation journey through innovation. We have a very strong culture of innovation.
As the third CEO of ADI, I’m standing on the shoulders of two impactful prior CEOs. The most you can hope to do in that situation is to take on the legacy, improve all aspects of performance, and strengthen the culture. We’ve stayed consistent with who we are, but our scale has increased enormously. We’ve now positioned ADI at the intersection of the physical and digital worlds as we approach what we now call the “intelligent edge.” I would say that, in a nutshell, we’ve increased our optionality and our resiliency.
The biggest lesson is that once you have a strong culture and a path forward, don’t get trapped in short-termism. You have to make sure your strategy is linked to execution, but stay true to who you are as a company and as a culture, and play the long game.
Asutosh Padhi: Vince, as you look at the next five to ten years for ADI, what are you most excited about? What are the biggest opportunities and challenges?
Vince Roche: It took the semiconductor industry 50 years to generate the first half a trillion dollars worth of sales. We’ve created incredible technologies that are now the bedrock of social and economic life. My sense is that the next decade will be even more exciting. We’ll probably double the size of the industry.
Over the past four or five decades, technology has moved from “big iron” mainframe computing to technologies that are miniaturized and deeply perceptive. We’re now bringing more and more computing technology to—and even inside—the human being.
And I think the biggest problems to solve are related to the health of humans and the planet.
Abhijit Mahindroo: I’ve heard you talk a lot about customer engagement and customer intimacy as a core value for ADI. How have customer expectations of ADI evolved, and how have you responded to them?
Vince Roche: Everyone, whether a semiconductor company, a customer of a semiconductor company, or a customer’s customer, is dealing with skyrocketing complexity. There’s an old joke about the semiconductor industry: “It’s not rocket science; it’s much more difficult.” It is increasingly important to build the right partnerships with the right players who can help us all tame the complexity.
Ten years ago, ADI was a pure hardware story to the first approximation. Today, we have to build solutions that are increasingly software-defined, with more and more machine learning, and with cybersecurity becoming a key part of what we do. And we have to be able to deliver those solutions into a customer-driven design environment that is increasingly visual and virtual.
So we have to put more and more software into and around our products while remaining true to the fact that we are, in essence, a hardware company.
Abhijit Mahindroo: I’ve heard you talk a lot about combinatorial innovation. What is it, and why is it important to ADI?
Vince Roche: Just like Darwin’s theory is relevant to the biological sphere, combinatorial innovation is relevant to the technology sphere. All the inventions, innovations, and routines we’ve developed over the past 58 years have become our bedrock for the future. We combine those with new techniques and ideas to create a compounding effect. The new combinations include the increasing emphasis on software and domain expertise I mentioned earlier; we’re adding those to established capabilities that we keep evolving.
Abhijit Mahindroo: You have led several industry-shaping acquisitions in the analog domain, such as Hittite, Linear, and Maxim. What have these companies added to ADI?
Vince Roche: Our acquisitions have been based on the fundamental belief that as the industry becomes more complex for our customers—and as they find it more and more difficult to manage the analog problem in their product development routines and activities—we needed more capabilities and a greater scope of technologies to be able to go from microwave to bits, sensor to cloud, and nanowatts to kilowatts.
The guiding principle for ADI has always been to take a long-term view. We’ve certainly gained scale from our acquisitions, but our primary goal was scope—to get more technologies to make ourselves more relevant to solve our customers’ toughest challenges.
Abhijit Mahindroo: At your scale, how do you manage the complexity? How do you stay agile and innovative?
Vince Roche: That’s something we’ve always thought very hard about as we’ve developed tremendous scale, particularly through the acquisition integrations. Another key principle for us—one we have never compromised on—is about the core belief system of the company that we were going to acquire. ADI has the ideology that innovation is the root of value creation. All the companies we’ve acquired share that core ideology. It’s hard to teach it if it doesn’t exist, and it gives us the confidence to do what we do.
Also, we’ve always given the acquired company a seat at the table. We tend to treat the deal as more of a combination than an acquisition. We look for “best of both” or best in class in activities like product development, manufacturing, quality management, and go to market. Engaging everybody and ensuring equality of voices at the table as we put together a new version of the company is really important.
Asutosh Padhi: Vince, the semiconductor industry has gone through many waves of value creation and trends that have created tailwinds and driven innovation. What comes next for the semiconductor industry?
Vince Roche: Good question. I think we’re getting some signals. If the era between 2000 and now was defined by the cloud, I believe the next ten to 20 years will be about the intelligent edge. It’s bringing more precise and pervasive sensing and actuation, coupled with increasingly efficient, high-performance edge computing, assisted by artificial intelligence with myriad connections. This will enable us to, in a very efficient, low latency way, make decisions where the data is being collected and analyzed, improving many facets of the IT sector and opening opportunities in automotive, machine automation, and so on. Looking to 2030 and beyond, I believe the intersection of deep data science and molecules holds the secrets to many new inventions and innovations.
Asutosh Padhi: The semiconductor has become the epicenter of the discussion and debate on globalization. What has changed, and where do you expect this debate to go?
Vince Roche: This is a deeply interconnected and complex industry that has benefited massively from globalization. We’ve benefited from having access to the best semiconductor process technology partners and tool providers around the globe. We’re also deeply collaborative with our customers, so we’ve learned from them globally. Even the supply chain is so interconnected that it will be very hard to unplug all of those activities and create separation while continuing to do the things we have been doing successfully as an industry over these past several decades. So I believe that collaboration is the way forward.
We all have to play by the rules of the game governments are putting in place. That is the reality, and we have to keep adapting. But I believe that the innovation game is best played in the global lab and that, over time, we’ll find the right harmony to continue that kind of collaboration on a deeper level.
Asutosh Padhi: During the COVID-19 pandemic, we saw a jump in semiconductor demand that surfaced challenges around the resiliency of the industry. How would you address these?
Vince Roche: In 2021, the supply chain crashed. As an industry, we were trying to ship 15- or 16-months’ worth of goods in 12, so it stressed the sector. The pressure was most pronounced in feature-rich, legacy, analog nodes at 55 nanometers and above because capital expenditures in the industry had been focused on the super-dense nodes of seven, five, three, and now two nanometers.
If we’ve learned any lesson, it’s that you need all the nodes to serve the broad IT industry. In the automotive sector, for example, about 15 percent of the silicon value is in processing and newer nodes, and 85 percent is in analog and legacy nodes. In the analog sector, when we ship product to automotive customers, most are 180 nanometers and above.
I believe that over the next three to four years, both internally and externally with our partners, ADI will largely have enough capacity to meet our growth objectives to the end of the decade at least.
Asutosh Padhi: One of the challenges you’ve mentioned is the health of the planet. How can the industry become more sustainable, and how can it help the world become more sustainable?
Vince Roche: Climate and environmental health are the most complex problems we’ve ever dealt with as a species. It’s believed that between now and 2050, the requirement for energy will triple. So, how do we solve that problem sustainably and efficiently?
It starts with developing solutions that enable renewable energy to be deployed more easily and cheaply while developing products with energy in mind.
Regarding what semiconductors can do to become more immersed in solving climate and environmental problems, economists use the term “future discounting,” which means that we, as humans, value what we have now more than we consider what the risks might be down the road. We’re generally prepared to take those risks.
The only way to bridge the gap between what’s happening today and the actions we ought to take is to deploy more sensing, more compute, and more connectivity to understand what’s going on in the oceans and the air on a more real-time basis. Then we may have a better chance to take the actions we need to mitigate the problems.
Asutosh Padhi: Returning to 2023, we see high inflation levels and geopolitical tensions. We’re also navigating the energy transition and a host of other challenges. What advice do you have about how to lead in this moment?
Vince Roche: The complexity is not likely to decline anytime soon, but you must have a long-term North Star. I believe the technologies we’re developing are transcendental and will be more relevant in 20 years than they are now.
Our task as a company is to invest for the long game and make sure that we keep strengthening every facet of our culture, our innovation machine, our manufacturing machine, and so forth. I take a very long view.
But VUCA—volatility, uncertainty, complexity, and ambiguity—will put new demands on leadership. Executional leadership is critical, and the leadership of the future will be a lot more system oriented. Leaders will have to be able to work with much more ambiguity about the long term and connect the immediate term to that. I think there will be a premium on people who can manage and feel comfortable with ambiguity and complexity, boil it down, get to the other side, and keep the ship steady and focused on the long-term perspective.
Abhijit Mahindroo: You’re only the third CEO of ADI and its second board chair. That must come with burdens and expectations. How do you keep yourself centered and fresh?
Vince Roche: I’m curious by nature, so I keep scanning the horizon for new ideas. In this industry, and technology in general, the cardinal sin is ignoring signals about how the world is evolving and missing the transitions. I spend a lot of time looking at the transitions and talking to thought leaders and customers around the globe, and that keeps me connected to the business in both the long and short term.
I also have an insatiable appetite to learn. I use a lot of metaphors from the biological world in my work and life. I’m always studying how the world is evolving through the lens of biological evolution.
A lot of my personal satisfaction is from travel, especially to the Arctic and Patagonia. I’m always looking for new vistas, and I like novelty, so I try to stay intellectually and physically stimulated. I have a discipline and a routine around trying to keep fit; cycling is my fitness passion. Finding time to do the really important things, like fostering, building, and keeping relationships, is also critical. It is difficult in this world of increasing complexity and scarce free time, but you must find time to do things that give you energy rather than take it away.
Abhijit Mahindroo: You joined ADI in the ’80s as an engineer. What advice would you give someone starting their career in this field today?
Vince Roche: I get this question a lot from our young employees: “What is it going to take to have your job?” Success is the product of lots of deliberate effort to make sure that you get things done and are recognized for what you do. It’s deliberate effort multiplied by chance, but chance favors the prepared mind. I don’t think there’s any substitute for continuously improving your impact, improving yourself.
When I was appointed CEO of ADI, my father asked me if I had expected to be CEO. I said no, I never expected to be CEO, but I never doubted I might because I had prepared myself by taking on various challenges. One of the pieces of advice I give to employees is if you aspire to be a business leader or any leader, don’t allow yourself to become long and narrow; be more T-shaped. You’ve got to be able to go deep, to master something. But at the same time, you need breadth to bring a rich perspective to whatever role you’re going to play.
I began as a product applications engineer. Then I got interested in how our customers were using the products, so I started to learn the product definition game from their perspective and what was important to them. I ran and created business units. I even took a diversion in my career when my previous boss asked me to become the VP of sales. I said, “What do I know about running a sales organization?” But in retrospect, it was a great move because I got deeper into the customers’ environments and saw everything from a different perspective. It became a lens through which we all began to understand how customers were changing so we could begin to adapt ADI to this emerging world.
So in short, get lots of rich experiences. The time to try things is when you’re young and have the flexibility to figure out what you’re passionate about.
