Avnet: Learning at All Levels

Avnet recognizes learning as a strategic part of the company’s overall mission.

Most organizational leaders have come to recognize learning as “strategic” (with undoubtedly varying definitions of what exactly that means), but rare is the executive who actually counts enterprise education as a central component of overall business success. Avnet Inc., a Fortune 500 company that distributes value-added high-tech products such as computer hardware, semiconductors and microwave components, is fortunate to have a leader with such a mindset.

“Our mission is to be the premier technology distributor globally,” said Roy Vallee, chairman and CEO. “To accomplish that, Avnet’s strategy focuses on three pillars for success: profitable growth, operational excellence and the development of our people.

“These three pillars are intertwined — we don’t believe you can have one without the other. Having a great team that is motivated and engaged to serve our customers will drive profitable growth, and a focus on operational excellence helps us ensure we have the best, most efficient processes to support our customers. All three pillars work together, and they are grounded in a foundation of our core values.”

A few years ago, Vallee selected Steve Church, senior vice president and chief human resources development officer, to hold up the people-development pillar of the company’s overall strategy. The selection was an interesting one, primarily because Church’s background was in business, not learning.

“Our CEO, Roy Vallee, recognized the importance of having a business leader running an organization that we view as strategic,” Church said. “I’ve spent nearly all of my career running businesses. I realized that in all of my years, I ran it with two primary priorities: customers and employees. This afforded me the opportunity to take everything I learned about running businesses and applying that from the employee side. This has been very gratifying for me, and I thoroughly enjoy what I do.”

Church runs much more than just the learning function, though — he also has responsibility for all human resources activities, including hiring, compensation and performance management, as well as corporate communications. This arrangement is highly beneficial for all applications related to talent, he said.

“We ultimately want to link our employee-value proposition to our external brand promise,” Church explained. “Avnet is a service company in a service industry. Most companies say, ‘It’s all about our people,’ but we live and breathe that every day. The way we interact with our customers and suppliers is really all about people who are engaged and excited about what they do and can deliver our brand promise.”

That concept of employee engagement is central to the organization’s overall approach to talent, Church said. Unlike most companies, which have a mantra of “attract, develop and retain,” Avnet’s policy is “attract, develop and engage.” The distinction is important because the aim is not just employee loyalty — it’s also improvements in performance.

“It’s not really our goal to retain employees,” Church said. “If all you’re doing is retaining, then you’re probably doing other things, like just giving people more money, when they really want to leave. We want people who are proud to work for Avnet and are excited to come in every day. That means that we’ve got to treat them with respect and provide them with the tools and training they need to do their jobs. They’ve also got to enjoy working with their managers and respect and trust the senior leadership of the company.”

Church also said learning is a driver of engagement at Avnet, and it grows in importance as employees who are new to the workforce join the company. He said recruits fresh out of college typically ask about development programs.

Promoting engagement through employee education requires more than just pushing out new offerings, though. Church stressed the importance of creating curricula that’s compelling, high-level and delivered by organizational leaders. To that end, he has spearheaded the Global Organizational Leadership Development (GOLD) and Leadership Education Accelerating Development (LEAD) programs for incoming executives and middle managers, respectively.

“What was unique and significant about our training strategy is that we use the leaders-as-teachers model,” he said. “What that means is that Avnet senior leaders are the ones who are teaching the ones who will be moving up and doing more and more for our company in the future. We’re not just teaching a class — we’re giving these people access to us. We’re mentoring, coaching and sharing our experiences.”

Because GOLD is targeted at Avnet’s future leaders, it’s appropriately run by current leaders. For example, the CFO teaches a finance course, and the general counsel serves as one of the instructors for the ethics class.
Additionally, Vallee conducts a session called Alchemy II, in which he has dinner with participants and spends the following day discussing company objectives with them.

“Teaching the Alchemy class helps me encourage the next generation of Avnet leaders to be thinking about Avnet’s future and what they can do to make sure we continue to be positioned strategically for success,” Vallee said. “Even more important, it drives alignment between our corporate goals, our board and our senior leaders who are responsible for executing the day-to-day functions that help us achieve our goals.

“It also gives me a chance to interact personally with members of our leadership team. The class is very conversational — there’s a lot of sharing of ideas. So, for me and for the leaders attending the class, we spend quality time together, away from the demands of a regular workday, talking about and thinking about Avnet’s strategies, why we do what we do and where we’re going in the future. The leaders also have a chance to meet and connect with leaders from other parts of the business they might not work with on a regular basis, so there’s also a networking benefit for them.”

The LEAD program follows more or less the same model of delivery but is more concerned with the fundamentals of management, Church said.

“It’s pretty practical. It starts with things like how to deal with pay plans, performance appraisals and how to interview and select,” he said. “The key class for middle management is one that we co-developed with The Ken Blanchard Cos. called ‘Situational Leadership and Coaching for Performance.’ It’s cornerstone because when you think about what we’re trying to do, it’s really all about performance management. We’re trying to give feedback to improve the performance of every employee because that’s how the company improves. It’s designed to provide them with the skills they need to have meaningful discussions with their employees, evaluate their performance and build a development plan that will continuously improve performance and develop careers.”

LEAD and GOLD, along with PRO (a program designed for Avnet’s individual contributors) tie together to form a holistic learning experience throughout the employee life cycle.

“The goal is that they build on one another,” Church said. “If you came into Avnet as an individual contributor and were promoted to middle manager and then executive, your training would build on itself and be connected as you moved through your career.”

Besides building skills and knowledge, the learning offerings help promote employee engagement through interactivity.

“It’s mostly interaction,” Church said. “My classes are breakout sessions, exercises, case studies and even role-playing. We have to do that because we can’t take people who are highly active during the day and put them in a class where they just sit there for two days. We could hire people to teach these classes, but they’ll probably do a lot of lecturing, and they probably won’t be able to relate a lot of things to Avnet’s business, which we’re obviously able to do.”

This concept of engagement is central to the learning function, to the point where it’s actually a key indicator for its success. Avnet does a global employee survey annually, and Church pays more attention to the employee commitment index than anything else.

“It’s a series of questions that get at the level of engagement we currently have with our employees,” he said. “Obviously, our goal is improvement. The good news is that over the last three years — and we’ve asked the same questions each year — we’ve improved three points each year in employee engagement.”

Of course, that’s not the only thing measured. Church also tracks the company’s bottom line to determine the efficacy of employee education.

“This is an area where having been a business leader probably gives me a bit of an advantage,” he said. “Our key metric for productivity (which I realize might be different from other companies’) is that we measure operating expenses as a percentage of gross profit. We’re buying our product from a supplier, and our margin is the difference between what we buy it for and what we sell it for.

“In the last three years, we’ve improved on that metric by 20 percent, and our stock price has responded accordingly. During that period of time, we increased training and development as a percent of payroll from 1.5 percent to 2.5 percent. That helps me justify the investment. We believe that’s making our employees more productive and engaged.”

Vallee has no trouble making that connection either.

“Learning and development has a direct impact on our team’s ability to serve our customers in the best, most efficient way possible, and that drives value to our partners, and it helps drive profitable growth for the corporation,” he said. “We have invested in the development of our people because it improves morale and helps our people grow, and in turn, they help our partners and Avnet grow. It’s really quite a simple equation, if you think about it — the more we invest in our team, the better equipped they are to grow personally and to serve our customers, who will, in turn, reward us with their loyalty and their business.”

— Brian Summerfield, bsummerfield@clomedia.com