But before I go further, here is some quick background information to keep in mind as you read this blog:
• Avnet has been voted No. 1 in its industry on Fortune magazine's Most Admired Companies 2009, 2010 and 2011
• Avnet has over 16,000 employees located in over 300 worldwide locations
• Avnet products are sold in over 70 countries
• Avnet’s revenues exceeded $19 billion for their 2010 fiscal year
It should be clear that Avnet is a complex and sophisticated company to manage. An obvious key question is how you continue to manage and grow a company as diverse and as large as Avnet.
During the luncheon, Roy was asked to identify the top 2 – 3 items he was going to personally focus on over the next 5 years. His answer; “The same 3 items I have focused on for the last 5 years”. They were:
• Value-Based Management
• Culture Proliferation
• Employee Engagement
Interestingly enough, corporate profitability was not in the top 3; especially interesting given Avnet is a publically traded company. The implication being company profits are a by-product of focusing on other important areas in an organization. Roy stated, “Inside of Avnet there is an overriding focus on improving service and support rather than a purely economic efficiency focus”. But don’t think for a moment that Roy is not acutely aware of the need to continuously improve the company’s operational efficiencies also.
On the topic of value-based management, Roy discussed how employees have embraced the concept of return on capital employed, and they continue to contribute considerable improvements to Avnet's financial performance and cash flow.
According to Roy, without the right company culture and with 16,000+ employees, it is impossible for employees to make the right decisions to grow a company of Avnet’s size purely on a “rules based” decision making approach. Inculcating the entire global organization with the right culture is critical. Embracing a performance and values based culture of excellence is another key to improving company performance and profitability.
It was the topic of employee engagement that generated some obvious passion. When Roy took over as CEO, an internal employee doctrine existed which stated; “Attract, Develop and Retain”. But as Roy put it, who wants to retain disengaged employees. So they changed that doctrine to “Attract, Develop, and Engage”, and then executed on that changed doctrine.
While not specifically sharing how Avnet measured employee engagement, he indicated his belief there is a clear and direct relationship between Avnet’s earnings per share and employee engagement. In fact, Roy keeps a chart that tracks these two measurements and their relationship.
Equally important, Roy emphasized that employee engagement is a never ending journey. You never actually arrive at the destination of 100% employee engagement. Further, the challenge of employee engagement continues to evolve as a workforce of different generations and ethnic backgrounds, and changing business challenges present themselves.
From a personal viewpoint, I strongly agree with Roy regarding his employee engagement philosophy. Our experience over the years as an IT recruitment company has also shown that the more personally engaged an employee is, the more productive they are; and frankly the less management they require. But never forget it is the responsibility of the company’s leadership team to set the right example and structure to best develop and nurture employee engagement.
Wayne Rampey
Vice President
