Barry Matties: Michael, I understand your title, chief revenue officer, was created specifically for this position. I don’t think I’ve run into this title often. Why don’t you just start by telling us a little bit about what the role is of a CRO.
Michael White: It is something that’s becoming popular in Silicon Valley with some of the newer tech companies. Jeff [Waters, Isola CEO] and I were talking about the roles and responsibilities for this position. It does include the traditional responsibility for sales and marketing, but it also brings into play some of the things I’ve done in the past, such as strategic planning and business development. We did not want to stick with the traditional SVP title, but it does take a little explanation, even around Isola.
Matties: I would think so. Because when I was reading the press release, I saw you have a very interesting background in all-around strategic planning. Can you tell me a little about your background?
White: I started my career in outside sales with National Semiconductor and worked my way up to VP of North American sales. I then transitioned to some corporate roles. I ran the strategic planning for National for a number of years. Then I began running businesses, both small analog businesses all the way up to the largest division in the company, the power management division. I’ve incubated new businesses and managed large P&Ls. When TI acquired National Semiconductor, after 23 years with one company, I decided to take on some other interesting challenges.
I had a couple of gap years where I actually stepped out of the semiconductor world completely and developed a startup technology that focuses on engaging people with nonprofits. It was a software technology that was more of a passion project. We released a mobile app and have some background technology that helps social enterprises be more effective with their information technology. I also worked with KKR, a large private equity company, where I did diligence and valuation for them on a lot of their tech investments.
That’s where I landed with the last position, a company that KKR invested in called Transphorm, which is a gallium nitride semiconductor company that’s in the high-efficiency, high-power space. At Transphorm, I set up a go-to marketing, customer-facing organization for them. Being a smaller company, it gave me a chance to put my fingerprints on a lot of the new processes and build out a team. I got that to the stage where I was very happy, and I was able to step back into just a board position at Transphorm.
I’ve known Jeff Waters for 15 to 20 years through the days of National Semiconductor. Jeff told me about the interesting opportunity and the challenges at Isola, and the opportunity to come in and help put them back on a growth trajectory. That was really exciting to me. Not only coming to a company like Isola, but working with a team that Jeff’s putting together.
Matties: When you look at the opportunity, you have a lot of ground to cover, from strategic planning to aligning of the internal team, and communicating that strategy to the external market. What do you think the various challenges are going to be for you in that role?
White: One of my first priorities is building out a world-class marketing team. We need to do a better job of understanding our target markets and making sure that the new product engine has a good pipeline of new products. That’s going to be one of the biggest focus areas for Isola, making sure that the products that come out of our development organization have high quality and at the right cost structure. If we’re going to get Isola back on a growth trajectory, nothing will help the company more than that. I’m going to put a lot of focus both on the strategic planning, new product development, and making sure that the customer facing organization and infrastructure is built out.
Matties: On the new product side, to get a new base material approved, that’s a multi-year process in a lot of cases. How do you overcome the time element there?
White: There are a number of products that are in the development pipeline that have had some challenges getting certifications and approvals. Over the last year, there’s been a strong effort from our team to make sure that we’re overcoming some of those issues. I believe second half of this year and first half of next year some of the technologies that Isola’s been developing for the last two to three years should be market-ready. This will give us the opportunity to do some new product launches and marketing communications activity. In fact, we’ve gotten some good news. It’s not anything I want to talk about at the moment, but in the second half of this year, in a couple of the key products in the RF and high-speed area, we’re going to have some good things to talk about.
Patty Goldman: We’ll be looking forward to that.
Matties: I would think that RF and high-speed are areas of keen focus for you guys.
White: It is. It’s an area where, historically, Isola has had a leadership position. But in recent years we’ve given up leadership due to some misses on product cycles. It’s going to be part of my responsibility to make sure we gain that back.
Matties: A lot of people say, “Well, Isola is being stacked up with all the semiconductor guys.” From my point of view, if you’re coming in, I would say business is business. Whether it’s laminate or shoelaces, the strategies and the approaches are the same. For the process side of things, how are you situating your customer service team? Are there any changes that you’re going to see there?
White: Before I answer that question, let me back up a little bit, because you hit on a very interesting area. Isola has brought in a number of members from the leadership team from the semiconductor space. What I’ve found is that a lot translates. Semiconductors have a very high focus on new products that are innovative, high quality, and high performance. These are some skills we can bring to Isola to help lay the foundation for where we want to go next.
Semiconductors are a very business process-driven industry. Jeff Waters, Bill Mazotti (Chief Operations Officer) and I have a history of working together. We’re able to put some business processes in place that’s very aligned in the three of our thinking. Things like starts control and new product definition. We don’t have to spend a lot of time getting to know each other and figuring out how to work effectively together. We’ve had over a decade doing that.
We do have to make sure we surround ourselves with domain experts from our industry, and individuals who understand what Isola is capable of doing. I think we’re putting together that right mix. As I’m building out the marketing team, I’m not pulling from the semiconductor world. I have to surround myself with people who have deep knowledge and expertise in PCB laminates.
Your question was around the technical service area and what we’re doing differently. I have to admit, being two to three weeks into the role, I haven’t had a chance to dig into that particular function and really look at any changes we might make.
Matties: I know that you’re only a few days or a few weeks into this, so that’s understandable. When we look at the way that laminate is sold, it’s really sold on two levels. One, directly to the OEM, of course, especially when you’re talking about RF and high-speed. Then, of course, into the fabricator space. A lot of that is relationship, and Isola has had a lot of relationships over the years. In terms of the market share and things getting back to growth trajectory, where do you think you stand in the market share space right now?
White: My understanding is that it’s a mix. We have number one position in North America and Europe, but the market is tilting towards Asia. China is a region where we have a lot of opportunity for improvement. China is certainly the largest opportunity, but Taiwan, Korea, India, and some of the emerging markets in Asia are areas where we also see opportunity for growth. You’re right that there is a two-stage selling process. We have to have very good relationships on the technology side with OEMs. We need to capture their voice into our new product development process and making sure we understand where the market’s going.
On the fulfillment, operations, and supply chain side, we have to have good relationships with fabricators. Historically, we had those relationships. We need to put in place a culture of execution in place to leverage both sides of the selling process. Another area that we’re looking at, and again, this is very similar to the semiconductor market, is putting more global sales initiatives in place to engage with business on both sides of the selling process.
Matties: In terms of measuring your success, I’m sure you have some sort of window of time in here that you’ve set for yourself. How do you measure your success? What’s going to come back and say, “Aha, we’ve done it?”
White: I mentioned one of my roles is strategic planning, and we’re going to put a process in place where we give clarity around what success looks like at Isola. We’re going to get clarity around what’s going to differentiate Isola in the marketplace and where we’re going to win, and what’s going to fall out of this process is the success model. A success model for things that are measurable like market share and financial measures, but also a success model for leadership in our target markets.
I don’t want to answer that question right now, because I want to go through that process where we bring the leadership team together to create clarity and alignment. Maybe if we have a chance to talk six months from now I can give a clear answer to that question.
Matties: Yes, we’ll certainly have that opportunity. We followed up with Jeff six months after he got started as well, so we’ve been tracking the progress of the transition. Really, that’s what we see, just a huge transition going on over there. It will be nice when you have all the bits and pieces in place and are well into your plan.
White: Jeff has been at Isola for almost a year and a half. He has put strong focus on fixing some of the foundational issues within the company by putting in a culture of quality, and a culture of safety. There are some new faces and new blood in some key positions. Now what we’ve got to figure out with much more clarity is what’s going to make us successful, and how are we going to operationalize behind that. That’s what I’m really excited about lending my skills to.
Matties: When I was reading the press release, that’s exactly what I saw, that your skills were going to be around more of that planning. Because the internal alignment, internal communication, is critically important, of course. You talked about the messages of quality and such, but what messages are you going to carry into your team internally to shift the culture even further?
White: Internally, we had some key areas that I would consider to be non-negotiable things we need to do better. New product execution. Making sure products’ costs are in line with market expectations. Making sure we have the right ways to engage with customers globally. Making sure we have the employee and the talent base across the company that are very engaged, and understand what success looks like. It’s good timing. Earlier this week, we had our first opportunity for the leadership team to do our quarterly off-site and sit down and socialize a lot of these topics.