Several years ago, Cryptography Research was in talks with Rambus about a potential acquisition. The opportunity was exciting, and would bring a chance to grow and transform the company I had started in 1995. For both entrepreneurs and acquirers, however, acquisitions are scary -- even for Cisco, which knows more about acquiring than almost any other company, about a third of acquisitions fail.
Everyone negotiating our transaction was determined to make the acquisition a success. One of the most critical challenges was to retain our top-notch security experts. During the negotiation, both sides studied the issue, and together we developed an interesting solution.
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We set aside a part of the acquisition price for retention incentives, and designated an amount for each team member to receive over 3 years. If a team member was no longer an employee for any reason, whether voluntary or involuntary, their remaining amounts would go to charity.
Because any funds that employees did not receive were not pegged to return to corporate coffers, we removed any concern that bottom lines would be considered rather than talent retention. Employees, likewise, had a great incentive to remain engaged and productive. This structure benefitted Rambus (the acquirer) as well as the employees and shareholders of Cryptography Research -- and had the fantastic additional benefit of helping make the world a better place.
The approach worked great. Despite a red-hot market for security talent, the annual turnover from the acquired team has been about 3%, and there wasn't any noticeable increase turnover the end of the 3-year period. Today, over 90% of the acquired team members remain with Rambus and are continuing to do some amazing technical work. However, a few team members did leave, providing an opportunity where we are now able to fulfill the charitable aspect of the approach.
The donations we're making are designed to further the goals of science and technology, including the world's need for better security. Each of the 501(c)(3) charity organizations are doing terrific work.
1,000,000 will go to the leading academic research organization in the field of cryptography, the International Association for Cryptologic Research (IACR), to help fund programs where students are learning about cryptography and data security. The world's need for data security solutions is acute, and helping students is absolutely essential to meeting the gigantic challenges ahead;
$350,000 will go to the FreeBSD Foundation, a non-profit organization dedicated to supporting the FreeBSD Project, a widely used free, open-source operating system; and
$105,000 will go to the Mayfield Fellows program at Stanford University, which aims to help develop entrepreneurs.
I think this approach allows organizations to benefit from provisions that direct unearned or disputed amounts to charity. It also makes good business sense by encouraging harmonious relationships and avoiding potential conflicts of interest. As well, the benefits of encouraging social responsibility align well with our emphasis on being a good corporate citizen.
This noodl was issued by Rambus Inc. and was initially posted at www.rambus.com. It was distributed, unedited and unaltered, by noodls on 2014-08-20 21:50:47 UTC. The issuer is solely responsible for the accuracy of the information contained therein.
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