Trust Is the Key
For Rice University trustee Hector Ruiz ’73, trust is not simply the currency of his business dealings. It is woven into the fabric of his life.
Growing up as the only son and eldest of five children in a family living in the Mexican border town of Piedras Negras, Hector Ruiz was not subjected to heavy-handed punishment. Instead, Ruiz, born on Christmas Day in 1945, experienced something even tougher: a firm, unwavering sense of trust from his parents. “When you go out as a 16-year-old kid to a party and your parents tell you, ‘We trust that you’ll do everything that’s right,’ that’s a lot of pressure.”
Even so, when he came to Rice, the level of trust he felt was “almost scary.” As Ruiz was working toward his Ph.D. in electrical engineering, he was entrusted to borrow books from the library and return them without checking them out. He was entrusted to take exams whenever and wherever he chose. And from the outset, Ruiz and his fellow Owls were trusted — and expected — to succeed in the classroom. “There was no sense that you had to go there to prove anything.”
Embodying the Role
These days, in his pressure-packed job as chairman and CEO of semiconductor manufacturer Advanced Micro Devices Inc. (AMD), Ruiz guides the Fortune 500 company without bullying or badgering. “I’m a strong believer that the best way to put pressure on people to perform is to trust them.”
His emphasis on trust comes at a time when “extensive media coverage and the glaring missteps of our peers have led to some of the lowest levels of trust in CEOs ever recorded,” Ruiz told a gathering of executives at the Detroit Economic Club last year. Indeed, the 2007 Edelman Trust Barometer revealed that just 22 percent of the respondents placed trust in CEOs — a number Ruiz finds “simply unacceptable.” In the Detroit speech, Ruiz laid it on the line for fellow executives: “The mistakes and greed of a few have created a guilty-before-proven-innocent spotlight on us all.”“I’ve always believed that many of the world’s problems are rooted in ignorance, and education is the solution. To educate the world, we must connect the world.”
-Hector Ruiz
Basking in a much gentler spotlight as a trustee at Rice, Ruiz, who is recognized as one of the country’s top Hispanic business leaders, said he joined the Rice Board of Trustees, in part, to help the university shine as “a lighthouse of values” for fellow Hispanics. He believes Rice could play a key role in helping the fast-growing Hispanic segment of the U.S. population be assimilated into American society. “I felt the Hispanic community needed to have an institution that they could look up to and say, ‘I will aspire to attend that school,’” Ruiz said. “I thought that would be a very positive influence.”
Burnishing Rice’s Standing
Ruiz also intends to exercise some influence in bolstering Rice’s standing among all sectors of the population, not just Hispanics. “I think Rice is a great school. I think it’s even better than people are aware of,” he said. “Rice has been able to achieve a certain status in terms of quality and desirability as an institution, but not yet what I believe it is entitled to achieve, which is the likes of a Stanford, Harvard or Yale type of reputation. I believe there’s nothing that should keep it from achieving that status.”
“The time that you put pressure on employees to do the best they can, frankly, is when things are going well. When things are not going well is when you want to nurture and encourage.”
-Hector Ruiz
As a Rice trustee, Ruiz views the university’s approximately 3,000 undergraduate and approximately 2,000 graduate students as his clients. “At a university, you’re responsible to the students,” he said. “To me, they are the ones who determine the success or failure of a university.” As for attaining their own success, Ruiz’s advice to students is simple: “Trust your instincts.”
When Ruiz was a student at Rice, he trusted the instincts of several professors, including those of his academic adviser, Thomas Rabson, who now is professor emeritus of electrical and computer engineering. Ruiz said he appreciated Rabson’s pragmatism, and he still keeps in touch with him. Ruiz also recalls the fun that Lionel Davis, currently professor emeritus at the University of Manchester’s School of Electrical and Electronic Engineering in England, injected into learning. Another professor, Malcolm McPhail, instilled in Ruiz the importance of understanding things, not just learning about them.
Taking It to the Top
Twenty-five years after earning his Rice diploma, Ruiz has gained a high degree of prominence in the business world. In 2006, Ruiz was named the Rice Outstanding Engineering Alumnus; four years earlier, he was honored with a an Association of Rice Alumni Distinguished Alumni Award. In 2007, the University of Arizona hailed him as Technology Executive of the Year, and the Hispanic Scholarship Fund inducted him into its hall of fame. These honors acknowledged Ruiz’s vision for enabling half of the world’s population to enjoy basic, affordable Internet access by 2015.
Ruiz said one of his chief responsibilities as CEO of a global technology company is to help make the world a better place. “I’ve always believed that many of the world’s problems are rooted in ignorance, and education is the solution. To educate the world, we must connect the world,” he told the World Congress on Information Technology 2006. “We can be socially responsible and simultaneously profitable. We can do well by doing good.”
After earning bachelor’s and master’s degrees in electrical engineering from the University of Texas at Austin and his Ph.D. from Rice, Ruiz coveted a college professorship but couldn’t find a teaching position. He wound up accepting a job in the high-tech industry as a fallback. “That changed the direction of my life,” Ruiz said.
His high-tech career started at Texas Instruments, where he worked in research laboratories and manufacturing operations. In 1977, he joined Motorola as an operations manager. At the pinnacle of his Motorola career, he was president of the Austin-based Semiconductor Products Sector (now a spin-off known as Freescale Semiconductor). Ruiz accepted a position with AMD in 2000 as president and chief operating officer; he was named CEO just two years later and added the chairmanship in 2004. AMD founder Jerry Sanders selected Ruiz to run the company when he stepped down. These days, Ruiz splits his time between AMD’s corporate offices in Austin and Silicon Valley. Ruiz also serves on the boards of directors of Eastman Kodak Co. and the Semiconductor Industry Association.
Chip Wars
Ruiz ascended to the CEO’s seat at AMD at a particularly brutal time. The tech industry was being lashed by an economic storm. That year, publicly held AMD posted an operating loss of more than $1.2 billion on sales of about $2.7 billion and Ruiz recalled that AMD faced extinction.
“Rice has been able to achieve a certain status in terms of quality and desirability as an institution, but not yet what I believe it is entitled to achieve, which is the likes of a Stanford, Harvard or Yale type of reputation. I believe there’s nothing that should keep it from achieving that status.”
-Hector Ruiz
To prevent a collapse, Ruiz steered AMD toward a business strategy of “customer-centric innovation” that involved every facet of the company: engineering, manufacturing, sales, marketing, human resources and legal affairs. Ruiz says the strategy was “a perfect fit” for AMD’s corporate culture, and it yielded positive results. In fiscal year 2006, AMD narrowed its operating loss to $47 million on sales of more than $5.25 billion.
In line with AMD’s collaborative corporate culture, Ruiz encourages any of the more than 16,000 employees to e-mail suggestions or questions to him; he promises to reply within 24 hours. With Ruiz at the helm, AMD’s culture also encourages risk taking. “People need to know that when the chips are down, you’re behind them and you trust them,” Ruiz says. “The time that you put pressure on employees to do the best they can, frankly, is when things are going well. When things are not going well is when you want to nurture and encourage. I’ve always said the best time to have a sales contest is when sales are strong. Why have a sales contest when sales are weak? It’s only self-defeating.”
Keeping the Engine Running
Ruiz’s laid-back, quiet demeanor belies his competitive drive — a drive embodied by the auto-racing paraphernalia that dominates his Austin office. AMD sponsors the Scuderia Ferrari Formula One racing team. While Ruiz’s own engine may sputter from time to time, he doesn’t get stalled for too long.
“There are times when you feel frustrated about things. Unfortunately, when you are responsible for thousands of people and thousands of shareholders, you have to deal with that differently,” he said. “Whenever I get that frustrated, I go find a dark cave and pout for a while. Nobody sees me, and then I come out.”
Ruiz expends plenty of energy mulling over those things he can control and very little energy worrying about those things that are beyond his control. “The number of mistakes I’ve made are huge,” he said. “It is very difficult for me to imagine learning without making mistakes. I don’t know how you’d do it.”
When he’s rebounding from a mistake, Ruiz leans on his wife, Judy, three children, six grandchildren and a close circle of friends. To relax, he plays the guitar or rides his bicycle.
Given that Ruiz is harvesting and savoring the fruits of an extensive career in the tech industry, it’s a bit surprising that he never aspired to be the head of a Fortune 500 company. Then, as now, he hasn’t followed a career road map. Once he reaches a fork in the road, he simply picks a path and trusts that he’s proceeding in the right direction.
“I dream like I’m going to live forever,” Ruiz said, “and live as if I’m going to die tomorrow.”