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Avnet’s Incoming CEO Talks Transition

Longtime {complink 577|Avnet Inc.} executive Rick Hamada will take over as CEO of the top-ranked distributor in July. Hamada, president and COO at the time of his promotion, talked to EBN about the transition to his new role and what to expect from the distribution market for the rest of the year.

Below are excerpts from the interview, part of a special package on the Top Global Distributors published by EBN and our sister publication, EE Times. To read the entire package, including the list of the top ranked distributors, click here.

EBN: What are your short-term plans as you prepare to become CEO in July?

Rick Hamada: First of all, based on the way we have rolled out with an announcement in February and the transition in July, for the first 100 days what I am trying to do during this pre-transition period is set a new context for Rick. I have been here a long time, and I have been able to influence the strategies and decisions [at Avnet]. It is highly unlikely that anything dramatic [will happen] in the short term.

Now that the word is out, I am spending time listening to the team. You can count on continued emphasis of [Avnet’s] core values — the respect, the integrity, and customer focus. However, I don't want it to be business as usual. How can we take the energy of this transition to look at new ideas? I want to make it clear that we are using this energy to create more opportunities in the marketplace. We are very market-led; we don't tell our partners in China, for example, what they should do. So I want to use this transition time to get in touch [with the market] and make sure I listen.

We will continue to see the themes of globalization and great people. I like to call this period “Rick 3G.” Our strategy will always be profitable growth, and I expect to help Avnet extract more value for shareholders — to maintain our global footprint but make sure we respect regional values. Under the topic of profitable growth, [CEO Roy Vallee] and I have had a division of labor; he has taken more of a lead in value-creating acquisition, and my focus has been on organic growth. I want to see us become more disciplined in the customer engagement process.

EBN: How do you see distribution’s role in the design chain changing?

Hamada: What I would tell you is [our] challenge in the design chain and supply chain is keeping them connected. That's been a trend [Avnet Electronics Marketing] has been dealing with for 10 years. In regard to the design chain, we try to be clear with our suppliers: What parts do they want to cover with their direct resources? Where do they want to win the design? Which part of the customer base do they want us to cover? Do we bring a component to market, as opposed to a total solution that may include technologies with multiple vendors? If semiconductor companies have become more specialized, what do they want to do with that specialization? So we offer a range of solutions for a wide portfolio of customers.

EBN: But that takes an investment in engineering resources. Engineers are a fixed cost in an organization that is sales driven. How do you manage that?

Hamada: I would say we look at the ratio of our investment in salespeople to technical salespeople to FAEs all the time. For us, we know it takes a significant investment in technology resources — sometimes they are supplier-specific and other times more of a technology segment (say, microcontrollers and high-performance analog) — and we can scale that over a portfolio of customers and supplier partners. In the technology-specific arena, it's all about the critical mass — the allocation of resources and what degree of specialization we need — and our regional managers make these decisions.

EBN: Any last thoughts?

Hamada: What we are trying to do, in addition to this being a smooth and seamless transition, is to challenge our management team. You can count on continuity but not business as usual. [I want to see us] use the energy of this transition to keep an external focus — not always an internal focus — and I want to make sure I have my finger on the pulse [of the market] and keep the momentum going. We have to stay in sync with the marketplace but maintain our positive growth momentum.

4 comments on “Avnet’s Incoming CEO Talks Transition

  1. FLYINGSCOT
    May 25, 2011

    I am always interested to hear opinions from others in the industry about how long it takes to see some real and significant impact from such a change at the top.  It is also insightful to see what new leaders say and how quickly they say it as a gauge for what type of change to expect and when.  So how long before we see something significant from Avnet?

  2. jbond
    May 26, 2011

    It is always interesting to hear the input from any companies CEO regarding the future. It is nice to hear that Avnet isn't trying a drastic change with a new leader at the helm. It sounds like the focus is directed at maintaining Avnet's place at the top, and helping to guide their growth far into the future.

  3. Backorder
    May 26, 2011

    Are we not seeing something 'significant' from Avnet already? I mean, Avnet is not one of the companies which have some soul searching to do. In that sense, the closing comments by the CEO designate about having a seamless transition make all the more sense. However, he mentions an increasing focus on tracking the pulse of the market, I guess it means a more aggressive external strategy which is always a tricky thing with distributors.

  4. SunitaT
    May 29, 2011

    Its interesting to see how the company maintains the ratio of investment in salespeople to technical salespeople to FAEs all the time.  Just wondering what  all parameteres define the critical mass for  in the technology-specific arena ?

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