Driving Excellence: How THE AGGREGATE SYSTEM Turned Microchip Technology from a Failing Company to a Market Leader »

Steve Sanghi is the President, CEO and Chairman of the Board of Microchip Technology Inc.  Under his leadership Microchip became the top IPO of 1993.  Steve holds a MS in Electrical and Computer Engineering from University of Massachusetts and BS in Electronics and Communications from Punjab University, India.  In June 1995 he received an Arizona Entrepreneur of the Year Award and was a finalist in the National Turnaround Entrepreneur of the Year category.  Steve co-chairs the State of Arizona Governor’s Council of Innovation and Technology, and is a member of the Board of Trustees of Kettering University in Flint Michigan.  His media appearances include:  CBNC Squawk Box (May 05’) and Mad with Money, Jim Cramer’s show; Bloomberg TV and radio, quoted in the WSJ and more.

Michael J. Jones, retired from Microchip Technology Inc. in 2004.  Prior to that he was the VP of Human Resources.  Michael was one of the primary architects of Microchip’s successful company culture.  A graduate of California State University, Chico, he holds a MA from the College of Communication and Education and a BA in Psychology.  He is currently starting his own HR consulting practice to train others on the success of The Aggregate System.

When Steve Sanghi took over as CEO of Microchip Technology in 1990, the company was in dire straits. It was hemorrhaging money, its technology was outmoded, its factories were inefficient, and its employees lacked morale. So many things were wrong with the company that Sanghi didn't know where to start.

A parade of consultants marched through the Microchip offices offering every kind of cure, from cycle time reduction to process controls to outsourcing. All those suggestions were valid, but there was no single cure for what ailed Microchip. Sanghi recognized that Microchip required an approach that would improve all aspects of the enterprise and involve every employee in the quest for improvement. But since no one could offer such an approach, it was up to Sanghi and Michael Jones, the company's Vice President of Human Resources, to develop their own model for reform.

Together, Sanghi and Jones designed and, with the help of an outstanding management team, implemented the Aggregate System. As the name implies, the Aggregate System is designed to simultaneously improve all of a company's business processes by aligning and uniting the processes and elements that lead to success. Rather than focusing solely on manufacturing processes, business strategies, or workforces, the Aggregate System is a big-picture approach that creates an exceptional business culture and a management model that institutionalizes and perpetuates improvement across the entire business.

Today, Microchip is a leader in the semiconductor industry. The Aggregate System worked for Microchip and it can work for you too. Now, in this practical and prescriptive guide, Sanghi and Jones explain the origin and proper implementation of the Aggregate System so that business leaders can apply it to their own struggling organizations. In four sections, they explain the story of Microchip and its rebirth; how the Aggregate System works and the ten key elements of it; the foundations of a true values-based corporate culture; and, finally, how you can put it to work in your own organization.

Based on hard-earned experience, the Aggregate System is a real-world solution for real-world business problems. It's no magic bullet and it won't change your business overnight. What it will do is show you how to create a business culture that improves, and succeeds, at every endeavor.

Foreword—L.B. Day.

Preface.

Acknowledgments.

SECTION ONE: The Microchip Story—Applying the Aggregate System.

1. Microchip: Before and After.

SECTION TWO: The Aggregate System.

2. The Aggregate System: Driving Excellence and Continuous Improvement.

3. The Ten Key Elements of the Aggregate System.

SECTION THREE: The Foundations of a Values-Based, Highly Empowered, Continuous-Improvement-Oriented Culture.

4. How Cultures Evolve.

5. Rules-Based versus Values-Based Cultures.

6. Systems Thinking.

7. The Six Principles of Building a Merit-Based, Variable, Total Compensation System.

8. How Managers Become Barriers.

9. Discovering the Origins of Behavior and Job Performance.

10. The Weakness Principle.

11. The Human Change Process.

12. The Transformation of Charlie Campbell.

SECTION FOUR: Building the Aggregate System.

13. Strategic Formula.

14. Selecting Your Core Values.

15. Policies and Procedures: Establishing the Rules.

16. Management Practices.

17. Human Systems: Backbone of the Culture.

18. Performance Appraisals.

19. Employee Practices and Assessing the Culture.

Summation.

Index.

About the Authors.