The Soft Pitch

We celebrated two little-ballyhooed anniversaries in July. First, it’s been 10 years since Avnet moved its headquarters to Phoenix, Ariz.  Previously, Avnet had two headquarters – one in California and one in New York.  It was before my time, but seems the two headquarters came about as Avnet built itself through a series of acquisitions and found itself with critical mass on both coasts. Avnet’s newly-named CEO Roy Vallee made the strategic decision to consolidate and move to Phoenix.  Why Phoenix? According to Roy, attracting and retaining top talent was critical to the company’s success, but it was getting more and more expensive and difficult to achieve that in LA and NY, two of the most expensive places to live.  Phoenix offered a better quality of life for employees plus an attractive business climate.  So here we are today in the Valley of the Sun — we have 2,400 employees in the state of Arizona and we’re the second-largest publicly traded company in Arizona with headquarters in the state. We have an economic impact here in the millions, as well as participating in the local community with “Avnet Cares” volunteers, community boards, etc.

The second anniversary has to do with Roy himself.  He just celebrated ten years as Avnet Chairman and CEO. Much has changed in those 10 years for Avnet and the industry. We’ve grown from $6 billion to $18 billion in FY ’08.  We went from being a US-focused company to a truly global company.  In 1998, 75% of sales came from the US; now less than 50% of revenue comes from the Americas – in fact we just tipped the scale last quarter with 53% of revenue now being generated from outside the US.  This was accomplished largely through acquisitions – 33 to be exact since Roy took over the reins. We transformed the business from a purely revenue focus to a on return on capital focus – nearly doubling our market cap in the process.  The company culture has evolved, too, to focus more on people and helping them to develop their talents and skills.

I’ve had the privilege this week to sit in on a few interviews and listen to Roy talk about the past ten years.  Talk about humble.  It’s always “the team this” and “the team that,” never much about himself though clearly he has been the catalyst for many of the changes. I guess his real talent is in getting the team to do “this” and “that” – oh that’s right, that’s what true leadership is all about. Well, IMHO, he’s a great leader … and still going strong.

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