American Independence Day (July 4, 2011) is a day of celebration for everyone in the U.S.A. That day will also mark a transition for value-added distributor, Avnet (ATS) (NYSE: AVT)as Rick Hamada takes over as its CEO from Roy Vallee after a long run.
The 53-year-old Hamada’s first day is the fourth of July only because it’s the beginning of Avnet’s new fiscal year.
This move is a culmination of a multi-year CEO succession planning process for the Phoenix, Ariz.-based company. Hamada has been with Avnet since 1983 and in a sense has been groomed to take over this role for a long time.
Hamada took some time out to talk to CDN about his new job and what his plans are for the Canadian market. The following is an edited transcript.
CDN: Where do you want to take this company under your watch?
Rick Hamada: I like what’s going on right now. No big changes are planned now. It’s my 28th year at Avnet and my fifth as COO so I’ve been involved and have some influence on what Avnet stands for today and our key initiatives. There’s no top secret file of strategies that I want to try out. I want to promote continuity when it comes to things like culture and core values but not think business as usual. Our value-based management approach in running this business is probably going to be consistent going forward. At the same time I want to encourage people to dust off ideas and do things better. We are not perfect by any means and this is a new opportunity to inject fresh ideas. This change should be a catalyst for that.
CDN: How would you describe yourself; what kind of a leader are you?
R.H.: Leadership by definition is the ability to get the best out of others in pursuit of a common goal. To be straightforward, I want to get the best out of others. I am focused with my direct reports and I want to establish a two-way commitment and I will dedicate all my energy, passion and purpose to make Avnet successful. And, I will do everything to make you (the employees) successful so you can be the best you can be and hopefully this perspective cascades on each level of the organization. That, in a nutshell, is my insight on how I conduct myself personally in a large organization, where Avnet is large in scale and scope.
CDN: The thing that makes Avnet different in the marketplace is that you were more solutions-focused and that Avnet was closer to the solution providers than the broadliners. If you follow what the broadliners have done recently, they have closed that solutions gap to a certain extent on all the value-added distributors. Is there a sense at Avnet that you have to change or augment the business model to keep yourself unique?
R.H.: I would say absolutely and we must be constantly enhancing and evaluating our business model. One of my old adages is the value proposition has lifecycles too and in technology you have to be innovating to keep on those growth curves well into the future. In distribution you have to innovate; Solutions Path is progressive and in my perspective, keeps the team sensitive to the lifecycle and they need to move the bar or others will come up and copy or implement similar value propositions once the code is broken.
We are trying to stay on the leading-edge and that takes investment. There is a certain financial profile and ours includes an ROI mentality. We work with a supplier and say which technology is getting to the market and where does it fit in. We try to find the intersect and put plans together to develop those markets. That takes different resources and investment, and profile than what our competitors have at their disposal.
CDN: What expectations and direction should we see from you as it pertains to the Canadian operation?
R.H.: I’m not sure there’s anything specific to what we are trying to do across our Americas region, but we like to make sure all innovative Solution Path programs are available across Canada. At this time there is a good representation up there but Government, Financial and Energy Solution Path programs are not available. I like to develop those and offer them as an opportunity for Canadian resellers and include mobility, networking, storage, virtualization and healthcare.
CDN: Beyond Canada, is part of your plan to make Avnet a globally recognized brand?
R.H.: Please keep in mind from Avnet there are two important worlds; components are 55 per cent of the revenue and then there is the IT distribution world or technology solutions, which is 45 per cent.
Avnet is doing business in 70 countries around the globe and in fiscal 2008 we crossed over where 50 per cent of our revenues are coming from outside the North American area. Also, the growth rates in emerging markets; I have a feeling that the cross over point will not be going back anytime soon. This balances our revenue and profile and it creates opportunities and challenges from an organization looking to take advantage of those on a broad basis.
CDN: Recently Avnet had a management or leadership shake-up with several key executives moving around. Why the need for so many moves?
R.H.: I believe the North American business is performing very well and to our goals that we laid out. But at the same time you can’t wait for the signal of change or you’re too late. We’re trying to implement proactively and take advantage of our new relationship with Cisco (Nasdaq: CSCO) for UCS in Canada and the U.S.