The walls of Jim Stafford’s office are covered with sports memorabilia, including a Minnesota Twins banner and a golf-ball display. [...]
March 1 1994 by Russell Shaw
The walls of Jim Stafford’s office are covered with sports memorabilia, including a Minnesota Twins banner and a golf-ball display. A ruggedly built scuba-diving enthusiast, he acknowledges a passion for competition. But that means winners and losers. And when Stafford, 49, took over integrated circuits manufacturer Chips & Technologies last July from founder Gordon Campbell, the seven-year-old company clearly was playing catch-up.
Over a three-year period ended in June 1993, sales dwindled by two-thirds to $97.9 million, while the bottom line plunged from income of $40.5 million to a loss of $52.7 million. But in the first two quarters of fiscal 1994-the first full periods of Stafford’s tenure as CEO-San Jose, CA-based Chips reported net profits of $322,000 and $720,000. The black ink broke a string of 11 losing quarters.
“As a company, we grew for the first five years on the strength of the chip set business,” Stafford says. “At that point, competition saw the healthy margins we were drawing and came into the market. Gordon and I sat down and drew a box. We put into it only those products we planned to keep.” Remaining in the box are the company’s cathode ray tube and liquid crystal display graphics, along with graphics-accelerators, systems-logic chips, and multifunction I/O controllers. In addition, Stafford eliminated several layers of middle management and re-emphasized U.S. operations. At one point, nearly three-quarters of Chips’ business came from the Pacific Rim. These days, it has a 60 percent domestic customer base, including IBM, Hewlett-Packard, and Apple Computer.
As a result, Chips finally has turned the corner, Stafford believes. “I knew we had to take some drastic action,” he says. “It was a matter of getting the right elements together and getting ourselves in shape.”