Murai: Ingram Exec Departures Won't Affect VARs

With four executives gone in the past four months, Ingram Micro has many channel observers wondering if something is afoot at the company. Kevin Murai, co-president of the Santa Ana, Calif.-based distributor, shed light on the impact of the executive departures and the rollout of the Choice Advantage channel program in an interview with Distribution Editor Scott Campbell. Here are excerpts from their discussion:

CRN: Four executives--Mike Grainger, Pat Collins, Donna Grothjan and Joe Gruca--have left Ingram Micro within the past four months, and they did so without having other positions. Why are they leaving?

MURAI: The important thing is that our company is not just about one or two or three people. The one thing we've worked on hard for the last several years is to develop bench strength and strong leadership at all levels.

CRN: But why did those executives leave?

MURAI: For a small number of people that left, it was individuals making independent decisions that have to do with their careers. For as many people that have left, even more have been successfully developing careers, such as Brian Wiser, who has a strong background with us, and Paul Bay, who was promoted to run the vendor management business. We have a lot of bright folks to leverage in terms of experience and leadership.

CRN: Did the departures have to do with any performance-related issues?

MURAI: As I said, they were independent decisions based on their own personal career goals. It's important for me to communicate that we put a strong plan in place at the beginning of the year to ensure profitable growth and to manage profitability enhancements for our customers and vendors. That's the plan we're executing today. There are three key elements to our business: to expand profitable growth, to create differentiation [from competitors] and to continue to develop bench strength at every level of the company.

CRN: Some solution providers, vendors and Wall Street analysts have expressed concern that the departures resemble a period a few years ago when executives such as Phil Ellett, Jeff Rodek, Doug Antone, Sanat Dutta, Greg Hawkins and Robert Grambo left Ingram Micro, and the company shifted its focus away from small solution providers. Will the latest departures lead to any customer-facing changes?

MURAI: I can assure you we have exactly the same focus on the same strategy that we've had. We continue to invest in new ventures and go-to-market programs. If anything, we have more of a focus on executing more quickly in the marketplace.

CRN: Can you provide an example of executing more quickly in the marketplace?

MURAI: We have a few examples that we've already done. Our Choice Advantage program is something we have been quite innovative in rolling out. It's a different business model that separates the way we deploy our products and services. We launched that in April with a successful initial phase of more than 700 customers. We continue to launch it to our 20,000 VARs. The feedback from our customers has been outstanding. The overwhelming majority like that they can choose the way they pay for products and pick the services that meet their market needs better. We also announced the acquisition of Nimax, which spells our entry into the high-growth AIDC and POS space. That is a new technology platform for many of our customers, along with RFID. We have the resources in the company that we acquired to help customers in that area.

CRN: Would it be fair to characterize the departures as you wanting to put your own team together? If so, do you feel you have the team you want right now?

MURAI: At the highest level, I can assure you that I have a lot of confidence in our team. We have a strong group of executives that have been developing for a number of years. We have the exact same focus on our business strategy that we had in the past. We are really focused on successfully executing that focus in the marketplace. Our strategy is aimed at achieving our objectives of improving customer and vendor profitability and value in the market. The changes we've seen over the last few months have been independent decisions. We have a very deep bench. I'm very happy with the team we have in place today.

CRN: How will the national rollout of Choice Advantage proceed?

MURAI: We continue to phase our rollout. The completion of all phases will be around the end of this year. We'll have implemented the program to over 20,000 VARs in the U.S. We will be rolling it out in four chunks between now and the end of the year.

CRN: There have been some tweaks to the program since its initial rollout, correct?

MURAI: We've learned a lot from the initial 700 [customers]. We spent a lot of time getting feedback about how they felt about the new model and the things they liked. The core structure remains the same at the highest level. We will continue with a three-tier structure--Independent Choice, Active Choice and Professional Choice--and we've done some fine-tuning to things like fulfillment.

CRN: How has it been fine-tuned?

MURAI: We have improved our fulfillment levels by one day across Independent Choice and Active Choice. Active Choice was next-day shipping; now it is same-day shipping. Independent Choice was two-day shipping; now it's one-day shipping. That was a change that came from our customers.

CRN: Have customers been notified when they will have to make their choice?

MURAI: Through the initial rollout, we learned some things in training our sales organization. We believe the final phases can be implemented more quickly. We haven't set exact dates. It's important that our customers understand what their choices are and have the time and the knowledge to make their choice. For some customers, it might take one day. For others, it might take much longer.

CRN: For the initial group in the rollout, you provided solution providers with information such as the number of support calls they made, which helped them pick the appropriate level. Will you continue to do that for all 20,000 customers?

MURAI: That's invaluable information, and our customers appreciate the fact that they know what resources they are using. That's very helpful, and we will continue to provide that information.