Avnet recently launched a rebranding campaign with a new logo, color scheme, website and tagline – “Reach Further” – with the goal of creating a unified message that “symbolizes growth and possibility.” Associate Editor Eric Smith spoke with Avnet CEO Bill Amelio about how the rebranding campaign aligns with the company’s recent moves and industry trends.
MDM: How is business going, and what are you seeing across the industry?
Amelio: It’s an interesting time in the history of electronics. We’re seeing the explosion of internet of things. People been talking about it for years but it’s actually happening now. You’re seeing devices that are unique, that can change people’s lives, popping up all over the place. We’re talking about a $20 billion to $30 billion dollar connective-device world in the not too distant future. And we’re right in the middle of that.
In fact, if you look at our revenues of almost $18 billion, we shipped about 300 million internet of things devices this past year. And we’re working diligently to build out a little ecosystem of the device, the gateway, the network and all the way to the cloud.
But the question now is how do you monetize on the data that comes off the devices on a regular basis? That’s the Holy Grail that everyone’s trying to figure it out, and there hasn’t been any one player that’s actually stitched it all together yet. So I think that’s a major theme that’s happening in our marketplace.
MDM: Technology is changing rapidly, as are the players in this space. What are the biggest changes you’re seeing and how is Avnet adapting and innovating amid this transformation?
Amelio: You don’t have to be in a big company to have tools that only a few years ago were only available to a select few who had the money to have those sophisticated systems. These systems now are available relatively inexpensively across most digital portals, and that’s essentially created an explosion of new products that we hadn’t seen before.
I like to tell people that if you think back all the way to the 70s and the 80s, this ebb and flow that happens. You believe there’s only going to be a couple companies left in the world because they’re the ones that seem to be winning. All of a sudden out of nowhere somebody creates something out of a garage or a dorm room and the whole process starts again.
So here we are sitting today with giants that were infants not too long ago – Google, Amazon, etc. We’re seeing the same explosion happen with this maker movement where there are so many people out there designing new things at a rapid rate, and you just can’t predict who’s going to be the winner when it comes to companies like DJI or GoPro or Fitbit. They essentially get in the market, and all of a sudden, they get explosive growth and they become such a big player in the spaces that they participate in.
We’ve geared a lot of our strategy to think through how we work to put together a model such that we’re able to cater to that group in a very cost-effective way. Until these last several months, we’ve been in a low-growth environment for probably the past five years, which has created a spot where our suppliers have looked for growth. The way they look for growth is through acquisition and combination, so there’s been a major supplier consolidation that’s happened over the course of the last couple years.
MDM: Were these industry changes and the changes that Avnet has undergone in the past year – including spinning off the Technology Solutions business and acquiring Premier Farnell and Hackster – some of the drivers behind the rebrand?
Amelio: We’re a totally different company. How do we express that in such a way that we’re able to get all of our employees aligned in the same direction and make it clear and crisp to our customers and our suppliers who the new Avnet is? What better way to do that with a brand launch and some creative videos and discussions and talking points and getting everyone charged up in the entire company? It’s quite amazing how we’ve been able to engage and energize 15,000 people across the company.
One of the ways that we got people excited is we had volunteers come forward that were brand ambassadors, and they were essentially the cheerleaders across the entire company, making sure that everybody understood exactly what the new branding was, why we were doing it and why they should be excited about it.
MDM: Talk about the process of the rebranding effort and some of the challenges that arose.
Amelio: We spent eight weeks doing the due diligence of asking how we could unlock value in the company. (We looked) at the company as if we were a private equity firm. We brought some helpers in to help us go through a pretty disciplined process and came up with some pretty ambitious targets on what we can do from a growth and cost energy point of view.
In the next eight weeks, which ended at the end of 2016, we spent time with what we call bottom-up planning; we unleashed the innovation engine in the company to say, “Let’s get the projects necessary to be able to achieve those ambitious targets.” Sure enough, we came up with 450-plus projects. We unleashed thousands of people that are working these initiatives across the company with a renewed excitement because these are ideas that have been around for quite a long time in some cases, but never got acted on. And now we gave the team a way to be able to handle projects that are outside their purview in a very effective and efficient way.
We’re now four months into implementation, and we’re ahead of the track that we put in place. We’ve got lots of excitement because it wasn’t just about changing the business to get improvement in top line and bottom line. It was also about changing the culture to one where people feel good about the business. We’ve learned that the more engaged employees are into the well-being of the company, the better the end result in how the company performs out in the marketplace.
MDM: Was a name change on the table at all?
Amelio: No. There was a lot of brand equity with our existing suppliers and customers with the brand name. Although there was no brand equity with prospective customers, and one of the things with launching a new brand will allow us to get a lot more impact on prospective customers.
MDM: What will your suppliers and customers experience differently now after this rebrand and repositioning, as well as the changes that have occurred in the last couple of years?
Amelio: We’re in the middle of a transformation, and one of the things historically with the company that we’ve been very successful at was having a decentralized business. That allowed people to have ownership and power to make decisions and get things done. It served us well for years, but the issue with that was it was very difficult to use best practices from one unit to another unit. And to do a corporate initiative was nearly impossible because you could get everybody to say yes but if you had only one person say no, it would stop the whole thing.
Then we had a culture where we would expose ideas to different units and not impose our will. We felt by spending enough time with this transformation work, we would be able to understand that there are some terrific ideas across the company, but we needed to get them unleashed and implemented across the company.
MDM: Was a strategic transformation important for Avnet to both avoid disruption, as well as to be a disrupter in your space?
Amelio: You are either the disrupter or you get disrupted, so it’s important to choose the former versus the latter. I think that’s what our attempts are as far as the strategy that we’ve put together, and so far, so good. It’s playing out well.
The other piece of it that I spend a lot of time talking about is the digital footprint that we have. We’re digitizing the company – not just the customer, but also shared services, the culture and operations. Those four elements are critical for any digital transformation of any company. The whole concept is to say that we put together a low cost-to-serve model where somebody can go on our website and they are able to self-serve themselves with tools that want them to self-serve.
MDM: You’ve mentioned culture a couple of times. How critical is that for Avnet to continue as an industry leader?
Amelio: Well, I think that culture’s everything. One of the things we spend a lot of time on is communicating, communicating, communicating. Just this morning, we had the top 200 executives on a call and we took them through how our strategy is developing. We have a board meeting coming up and will spend time talking about our strategy, so we wanted to bounce it off of 200 people to get their input and feedback. It’s helpful to make sure we’re all agreeing that we’re pointing in the right direction.
I think a transparent culture is really important. Feedback truly is a gift because if you live in a world where you’re not getting any feedback then you’re headed for trouble. All of us have got things to work on.
MDM: Avnet is not a household name when it comes to recruiting against the likes of Google, Amazon and Silicon Valley name brands. How do you get over that hurdle?
Amelio: When I think about how to run a company, I have a strategy process and execution process and a talent management process, but our ability to track the best talent in the industry is unquestionable. I mean, we get the best and brightest in the country, there’s no doubt about that. Primarily because we’re tapping into a different set of people than may be looking to go into a Google or an Amazon.
In order for any brands to really resonate with the world, they’ve got to resonate with the people first. So we spent a lot of time uncovering our purpose. We like to say that it’s not the what that matters or the how that matters, it’s more the why you do your things that really matter and inspire people. And our why is that we guide today’s ideas into tomorrow’s technology.
That resonates as the purpose of what Avnet’s all about. It fits so well with our whole branding scheme. When you think of an A, there’s two sides of an A. One side is the supplier. The other side is the customer. And the little bridge in between is Avnet making it all stick together.
Our thought process is that we’re the Sherpas of the world trying to help guide our customers to better and bigger ideas that they may not have seen themselves. We’re the guys that carry all their stuff to the top of the mountain, and we might not even get into the picture, but we’re there assisting them all the way.