Avnet's Roy Vallee on leadership

December 02, 2009

Thirty-seven years ago Roy Vallee was stocking shelves at a small electronics distribution company in Los Angeles. That small firm has grown up to become Avnet, Inc., a Fortune 500 firm located in Phoenix, Arizona. Avnet is one of the largest distributors of electronic parts, enterprise computing and storage products, and embedded subsystems in the world. And Roy Vallee is the CEO and chairman of the board. One morning recently, marketing professor  Antony Peloso sat down with Mr. Vallee to talk about Avnet, his leadership style, and how to motivate employees -- even in a far-flung global operation. Professor Peloso leads the Marketing Professional Sales and Relationship Management Initiative, which fosters strong relationships between students who are headed for careers in sales, marketing faculty members and corporate partners. The goal is to build professional sales capabilities and advance the profile and status of the sales function. And now let's hear what Mr. Vallee has to say about one the toughest jobs of leadership: motivating employees. 26:42



Knowledge: Thirty-seven years ago Roy Vallee was stocking shelves at a small electronics distribution company in Los Angeles. That small firm has grown up to become Avnet, Inc., -- one of the largest distributors of electronic parts, enterprise computing and storage products, and embedded subsystems in the world. And Roy Vallee is the CEO and chairman of the board. Since assuming the top leadership role in 1998, Mr. Vallee has led Avnet to sustained success through astute acquisitions and value-based management. At the same time, he has been a civic and industry leader.

One morning recently, marketing professor Anthony Peloso sat down with Mr. Vallee to talk about the company, his leadership style, and how to motivate employees -- even in a far-flung global operation. Professor Peloso leads the Marketing Professional Sales Initiative, which fosters strong relationships among students who are headed for careers in sales, marketing faculty members and corporate partners. The initiative seeks to enhance the professional sales capabilities of individuals and organizations, and to advance the profile and status of the sales function.

And now to our interview …

Antony Peloso: Roy, thank you so much for joining us this morning. This is an incredible opportunity for us to gain some insights into your leadership expertise. Now I know you've written that motivating employees is one of the toughest jobs of leadership. What do you believe are the drivers of employee motivation?

Roy Vallee: Well, first of all, thank you for having me. It's great to be here. I'm looking forward to spending some time with you. Employee motivation is obviously a very important topic, and one that I actually enjoy talking about quite a bit. I think that there are many, many factors that actually influence employee motivation but there is some research on the topic that we have followed. Interestingly enough, it's global in terms of its scope. The things that drive employee motivation tend to be actually more consistent than you might imagine, at various places around the world. The research, that we have seen, says that maybe the top few items are the company maintaining an external focus; caring about its customers; clear communications; of course, the total compensation and rewards program for work that's well done; and the quality; and, let's say, integrity of the leadership. Those are the things that I think primarily drive employee motivation.

Peloso: So Roy, in your career, I believe you started on the shop floor, and I think I've read somewhere that you have an engineering background -- that you have part of an engineering degree, and I assume that means you've worked at every level of the organization. How have you taken these drivers and made it happen?

Vallee: Well I think that employee motivation is a complex topic. There are a variety of factors, and so I don't think that there's a silver bullet that leaders can use to motivate employees. I do think that the vast majority of employees want to do a good job. I think people want to come in and do what's right for their companies. I think that as long as they are being appropriately recognized and rewarded and have opportunities for career growth -- the opportunity to achieve what it is they want out of their career -- they will be motivated over a long period of time.

I will share with you in the category of a quick simple answer. When I became a sales manager, for the first time in my life, I spent some time thinking about how do I -- how do I motivate these folks, so this is a more focused, sort of tactical view of employee motivation. What I figured out was that it wasn't my job to install a fire in their belly, so to speak. In fact, most of them already had that fire in the belly. What they needed from me was two things: one, clarity of the work that I wanted them to do, or what it is I wanted them to accomplish; and two, they wanted me to remove the obstacles that were beyond their personal control. So if there were issues in other parts of the company that needed attention by management, that had to be my job. Their job was to achieve the things that I had specifically asked them to go do. I found that that little simple two-step process works pretty well.

Peloso: So, how do you motivate and incentivize such a large team, in so many locations, to achieve these outstanding outcomes, and so many stakeholders, that I must say, have been year on year for so many years?

Vallee: It is a big challenge. It's a big topic. I think that there are many advantages that corporations develop, in conjunction with size, but there are also disadvantages that come with size. The ability to actually do things like motivate workforces that now are, in our case, over 12,000 associates -- it's difficult. But, let me share with you maybe some of the highlights. One thing we've done is we developed a set of core values for the company, and actually the initiative to do that was employee-led. There's been a couple of iterations over a long period of time, but the employees have defined Avnet's five core values and, in fact, have helped us prioritize them -- one through five -- just in the event that there's ever a conflict between two core values. Then building off of those core values, we have actually embellished on Avnet's overall culture, which we have labeled a performance- and values-based culture of excellence. We talk about that a lot, and what we passionately believe is that good people want to work for good companies; and good companies have good cultures. Good people do not want to work in a corrupt environment.

Second thing, I talked earlier about the importance of customer focus. Several years ago, we launched a global customer loyalty program. We have a third-party expert that's helping us facilitate the activity. We're driving this thing globally, and it's got a uniform, say, lexicon and framework. There are adaptations for different lines of business and different geographies; language, of course, being one. But every employee at Avnet understands we have a global customer loyalty activity, and we are committed to that from the CEO on down through the balance of the organization.

Another thing that I would say we've done a lot more of in, say, the last five to seven years, and that is strengthening our overall people-practices. Starting with, selecting the right people and the on-boarding -- ever so important -- on-boarding process, you know, the first 90 days of their exposure to the company; but then including key fundamental things like performance reviews, talent management and, very importantly, the opportunity for personal development.  Everyone in these days needs to be committed to life-long learning, and the corporation, I think, needs to provide the opportunity for that. The employees have to take the bit, so to speak.

I guess the last thing I'll mention, and just, again, circling back to the research that I talked to you about earlier, and that is compensation practices. We have a pact with our employees that says within our competitive peer group, we have every intention of offering the highest total value proposition. Of course, that includes compensation and, in our case, with a bias towards variable compensation that rewards individuals for individual contributions. More than that, the benefits package, the work environment, the opportunity for growth, the learning environment, the whole compensation, we intend to be the leader in our field.

Peloso: Now, what do you think -- you mentioned that employees are deeply involved in developing these core values, do you believe that that's the secret of having those values inculcated in your culture?

Vallee:  Yes, I believe that, and I'll just expand on that and say, any time you want a group of people -- whether it's all employees, a specific segment, a management team -- to buy into a new concept or an action item, if you give them the opportunity to participate in development of the item itself, or what action is going to be taken, then you have a lot of buy-in going forward. Any time the ideas are cultivated in a dark room, especially in the corporate office so to speak, and then you try to sell, it's going to take longer to get implementation.

Peloso: Now Roy, the fact is that you've actually worked at all levels of the company, do you think that that's actually helped your understanding, your desire and indeed your motivation to actually be that kind of leader?

Vallee: You know, I think the answer is yes, but I don't think in any way that it's a requirement. What I … let me try to define a little bit … I think where it helps me is my ability to communicate in a way that employees, at various levels of the company, can understand. I can be relevant to them because I can relate to them individually, but I don't think that that is necessary to embrace the fundamentals of good leadership. There are some techniques and practices and skills that are present in strong leaders, and it's true whether they've worked their way up from the bottom of the organization or not.

Peloso: There's a great deal written about this young generation and social media and social media technologies. What differences do you see in the so-called tech generation? The T-gens, the tech-oriented social network? Is there something new, different that you're dealing with?

Vallee: Well, I think there are. There are differences. Of course, if we studied history, we see that every generation has differences, and, of course, contemporaneously we tend to talk about the boomers and forward. I think this has been going on from the history of mankind. Perhaps what's different though is the rate of change from one generation to the next. If I think specifically about this tech generation, some things that pop into my mind are; first, they're very well informed. Information is ubiquitously available, and they are absorbing it at an alarming rate. Secondly, they are tech savvy. They've grown up with technology; and they don't necessarily know how to design integrated circuits, or electronic equipment; but they sure know how to use it and what it's capable of doing; so they are very technology competent and literate.

I also think, it seems to me, and maybe this is just an illusion, but it seems as though because of all of this, they've become very fast learners. They adapt rapidly, and they absorb new concepts and new information more rapidly than in prior generations. Now, maybe one other observation, perhaps on the slightly negative side of the equation is, that while all of this is going on from a technology perspective, are they losing some of the people skills and social skills that other generations, perhaps, had more reliance on.

Peloso: One of the observations I have with young folks is that they can do a lot of things very quickly. I always worry about quality. It seems that 'done' is the checkpoint. Quality? I'm not so sure about that. Any thoughts?

Vallee: I think that, generally speaking in business, quick action and quick correction actually can be quite effective versus sort of the analogy that has come up lots in the past, right. It's ready, aim, aim, aim, aim, fire; as opposed to ready, fire, aim, fire, aim. I think that quick action is actually, generally speaking, better than the slow and methodical. What's interesting though, when making decisions, is that some decisions or many decisions are easily correctible if you were wrong. Some decisions are very difficult. They're either expensive or take a significant amount of time to correct if you were wrong. I think the key for young people today, or maybe even all people, is to think about the consequence of the decision. If it's easily correctible, go fast. If it's not, be careful.

Peloso: Following on from that question, how do you navigate the interface of the culture you've fostered at Avnet and the changes in technology and work style and the general environment?

Vallee: I think it's actually a very interesting question because we've done a lot around here to try to make sure that we are cognizant of generational differences. I think we all understand, from Communication 101, that in order to be well understood you need to understand the person you're trying to communicate with; and how they receive and process information; and adapt your communication style to that person. That is what makes an effective communicator. The challenge that I see is, at the same time that's true, we want to establish a uniform culture for Avnet on a global basis.  We actually have some very specific fiduciary requirements that have to be applied around the world; independent of these generational or even cultural differences around the world. Therefore, there is a balance required.

There are a set of tradeoffs and, therefore judgments need to be made on a regular basis. If you ask, specifically, how does Avnet communicate with a multigenerational workforce who wants to receive and process information in a different way? The answer is: we try to communicate a consistent message but through a variety of different mediums. We do this sort of like Chicago voters; early and often, and we just keep communicating the same message over and over in a number of different ways, such that, I think, anybody who wants to listen certainly has the opportunity to.

Peloso: I guess there are some advantages in being a technology company. There's an overall mindset, for the technology focus, is what you do as well as how you think or how you think and feel. Or is that just an outsider's assumption?

Vallee:  You know, I think it's more right than wrong. We do understand the lexicon. We do understand the technology, so perhaps we're a little bit of an early adopter; or it's easier to make change here. Well, the reason I'm sort of grinning, as I answer this, is that it seems more often than not, it's the cobbler's children, you know, that go without the shoes. I'm not sure it's, maybe, as big a factor as you might think from the outside looking in.

Peloso: Roy, somewhere I've read that you say, "Have fun." What does this mean? How do we do this in the corporate world?

Vallee: Well, you know, first I've got a couple of principles that I believe in. One of them is, and as you might imagine, I get the opportunity to talk to lots of employees at lots of occasions -- especially younger and newer employees. One of the things I try to establish with them, at the very onset, is that the definition of success is happiness. It's not measured by title; it's not measured by compensation or location or responsibility. It's, the definition of success is happiness, and, of course, I think what everybody understands is that work is a very large part of our relatively short lives.

When you put those things together, it says to me that you need to be having fun at work; otherwise, you're going to shortchange what you are able to accomplish and enjoy in your lifetime. When you think about, therefore, my challenge, as you the employee, think about -- are you happy or not happy -- is figure out what it is and why. Once you've figured that out, then go do something about it. Nobody else is going to take responsibility for your happiness; therefore, you have to take that responsibility.

I would say, of course, it could be as simple as an attitude adjustment, as the country western song taught us many years ago. Or it could be, perhaps, a discussion with your direct supervisor about how that working relationship going along or happening. Or it could be something more profound such as you're not doing what you should be doing; and you need to make a career change; and/or even a company change in order to find an occupation that makes you happy. But I don't think it's optional.

Peloso: Roy, I understand the relationship between fun and happiness. I wonder if you'd be prepared to share some personal experiences of how you've put this in play in your life.

Vallee: You know, yes, I'll give you one example. I got married at a relatively young age. I was 19; my wife was 18. We've now been married for 38 years. We have two kids; a girl and a boy. As the kids were growing up, I remember talking to many, many, many business associates who would say to me, "Life is short. I should have spent more time with my kids instead of flying around the country; or doing various things in my job."

I took that to heart and, therefore, I avoided getting into a corporate level responsibility that required lots of travel until my -- both of my kids were actually teenagers. I didn't start the corporate phase of my career until my kids had become teenagers. Now, by then, they didn't want me around anyway, but we had built a terrific relationship. I'd had the opportunity to do some coaching of sports teams; spend time with them; be there for the special occasions, so we had that strong relationship to build on, and we have a very strong relationship today.

Peloso: Roy, I've read a quote of yours that you believe leaders are made, not born, you say. How do we make a leader?

Vallee: Yes, so let me be fair about that. I do think that leadership, perhaps, comes more naturally or easily for some. However, I think the substance of strong leadership is actually a set of skills and knowledge that can be deliberately accumulated over one's lifetime. I think if one desires to be a good leader, one needs to apply themselves to developing those skills and garnering that knowledge. You know, it seems to me, some people get wiser over time and some just get older.

Peloso: Roy, I recently read a quote in Harvard Business Review special on Peter Drucker. I'm not sure if you have a leadership guru favorite. I'm not sure if that's the way you think. I happen to like Mintzberg -- his idea of this iterative development of strategy, I just think is fascinating. During this article, the overall point was that leaders must foster integrative thinking in collaboration across fields and specialties. In fact, that collaboration, not coordination, are crucial. What's your reaction here?

Vallee: My first reaction is that Drucker was brilliant. It's sort of mind-boggling how much he taught all of us about modern management, and how to build effective businesses. I would also say when you read what he said and listen to what he said, it was clear that he had very high aspirations for all of us. You know, so his sights were set pretty high, in terms of what businesses were capable of doing with the right sort of leadership.

As I think about the essence of that specific quote, I think that what he was communicating here is that people are the most valuable resource in any company and, therefore, if the objective is to truly optimize the results of a given company, you have to find a way to unleash the human potential. That needs to cross over organizational boundaries, or functional disciplines, and create an environment where people are allowed to share best practices -- which accelerates cycles of learning, and adopts best practices widely and rapidly across organizations. I think his quote was really all about: please don't underestimate the power of the people in your company.

Peloso: So Roy, I love your observation about Drucker having these high aspirations for business. In fact, if you take it to the next step, organizations exist, he claims, to make the world a better place. Comments, thoughts here?

Vallee: Well I think that's true. As we think about what we do here at Avnet, we're just a distributor, and we sometimes say things like, "This is not rocket science and we're not saving lives."

On the other hand, when you reflect a bit, the reality is that technology is enhancing the quality of lives for people around the world. You know, everywhere from literal medical technology, to productivity gains, to entertainment. Technology enhances the quality of life for people around the world. What Avnet does is we help the world's leading technology providers get it to market in a time and cost effective way. So if we do our jobs well, we're enhancing the quality of lives around the world.

Peloso: So your most proud moment at Avnet?

Vallee: You know, I think my first comment would be to say that I truly feel fortunate and honored to lead the men and women of this great company. It's really a privilege to be in a job like this, and as I reflect on this question, the reality is I've had many proud moments, and this may surprise you a bit, but they come almost on a daily basis somewhere in the world that Avnet is operating. We have stories that come across our tapes just regularly, and it's amazing what our people are doing.

If I interpret the question to be, my personal best moment, I guess it would have to be the day that the board of directors asked me to become the chairman and CEO of the company, which is sort of the pinnacle from a career-accomplishment point of view.

Peloso: Roy, we often talk about this idea of a pendulum that we swing from one extreme to the other, and then there's a sweet spot. You're nodding here. So overall, what are your thoughts about that?

Vallee: Well, I think, in terms of the pendulum analogy, I believe that, but hopefully the swings are getting less dramatic, and the pendulum is getting closer to the center. I think there's another theory that would speak more to cycles, and that things have a way of sort of coming around, and going around, and, perhaps, people will recognize that if they're not taking enough time to think; if the social skills are becoming too weak or too absent; that there'll be some sort of a corrective action that we, as a society, will figure out and put to work.

Peloso: So what would you like to share with the future leaders of this world?

Vallee: You know, we've talked a bit about technology and what's going on with this current generation, and it seems to me that when you combine the effects of technology, globalization and competitive pressure, they've all sort of come together to enable and to challenge us to do more, to reach higher, to go faster than ever before.

This connects really, Tony, to something you said a minute ago. While most of this is incredibly good for the human race, it does leave us all with little time to think. If I had a concern, it would be that leaders must never confuse high activity with high achievement. I'm concerned, that with all this high activity, we may be losing track of the achievements. This is a very exciting time; the whole notion that the world has become flat; the enabling dimensions of technology. There is so much potential that is being unleashed now, on a global scale, that it's just an incredibly exciting time to be thinking about launching a career.