Avnet CEO Roy Vallee Takes a Different Tack

That approach to the office paid off until the recession hit. Through 2001, the CAGR for Avnet for the past five years was 18.6 percent. But in fiscal 2002, ended in June, sales fell by almost $4 billion.

Today, Avnet has three lines of business: electronics marketing (electronic components and supply-chain solutions), applied computing (computer-technology services for OEMs and systems integrators) and computer-marketing (computing solutions for VARs and end users). It's a broad empire that spans 63 countries and includes 11,000 employees.

Recently, Vallee, a 25-year company veteran, outlined for VARBusiness senior executive editor T.C. Doyle his philosophy for managing the company, suppliers and the recession.

VB: The industry is much different from what it was before the recession. Have you changed your philosophy or strategy?
Vallee: I think that, short term, my answer would be no. What happened to us is that we had big relationships with HP and Compaq. So now we have an even bigger relationship with the new combined HP-Compaq company. We have an equally big relationship with IBM. We're building our relationships with companies like EMC and Oracle. Generally, we believe in a limited number of very large and very deep supplier relationships. On a short-term basis, our primary role is to ensure midmarket customers have access to the enterprise-computing technologies...

VB: Let's talk about relationships. You have two of the Big Three in IBM and HP. Some of your people have expressed an interest in the third, Sun. Do you need it?
Vallee: The absence of that third company provides us with a little tighter linkage to IBM and HP than we would have otherwise. That's a positive. The negative is that clearly there's an account base out there that is committed to that technology%85I'm sure we would entertain a conversation with Sun if and when all the circumstances became appropriate.

VB: Best guess: Will you have [Sun a year from now?
Vallee: Based on what I know today, I would say no.

VB: Where do you spend most of

your time?
Vallee: Well, it's not on the golf course.

VB: Seriously, where are you putting your emphasis? What's most important for you to accomplish this year?
Vallee: I spend a lot of time with my direct reports and their direct reports, and in team meetings wherever I can. I have regularly scheduled meetings with team members on a one-on-one basis just to get a feel of what's happening, and so they understand what's happening from my perspective. No. 2 is suppliers. No. 3 is the financial community, including my board of directors. And, finally, the lowest fraction of my time as CEO goes to direct interfacing with customers.

VB: Some of your colleagues have that almost flipped. Is yours really the right balance?
Vallee: This is what works for our company, based on our organizational structure and strategy. The reality is that, based on a company our size, my job is the vision. To lead. To create a culture. To instill values. Really, the truth is I don't run this company; I lead this company. We have executives and managers who can do the actual day-to-day activities. So, I can get out in front of a customer,just one of 100,000 clients we do business with. Or I can influence the behavior of my team so that they can do the job in front of my customers [the same as if I were doing it myself.