Research

Avnet's Steve Phillips: Selling to the C-suite

Steve Phillips is vice president and chief information officer for Avnet, Inc. In 2010, CIO Magazine named Avnet a recipient of the "CIO 100 Award." In 2011, Computer World named Phillips a "Premier 100 IT Leader." Recently, Phillips met with a group of students from the W. P. Carey School's professional sales initiative. He answered their questions about selling to the C-suite then shared the Avnet values philosophy.

2011-06-13

Steve Phillips is vice president and chief information officer for Avnet, Inc. In 2010, CIO Magazine named Avnet a recipient of the "CIO 100 Award." In 2011, Computer World named Phillips a "Premier 100 IT Leader." Recently, Phillips met with a group of students from the W. P. Carey School's professional sales initiative. He answered their questions about selling to the C-suite then shared the Avnet values philosophy.

Questions and Answers

Knowledge: Steve Phillips is vice president and chief information officer for Avnet, Inc. In 2010, CIO Magazine named Avnet a recipient of the CIO 100 Award. In 2011, Computer World named Phillips a Premier 100 IT Leader. Recently, Phillips met with a group of students from the W. P. Carey School's professional sales initiative.

He answered their questions about selling to the C-suite then shared the Avnet values philosophy. I wonder if you have ever had to tell someone, in 50 words or 100 words, what the heart of Avnet is. What is the business?

Phillips: Avnet is a technology distributor. We're a global enterprise so we operate across the Americas, Europe and Asia. We have revenue of approximately $25 billion a year, and we're really two businesses. Avnet is one company because of the synergy and leverage between these two businesses.

One of our businesses is electronics marketing. Our other business is called Technology Solutions, and there we're a computer products distributor. In Technology Solutions, we're a master distributor which means we sell to value-added resellers who in turn sell to IT departments and IT shops.

Knowledge: As CIO, you lead technology initiatives at Avnet. I wonder if you could tell us a little bit about how technology supports company growth?

Phillips: We work in a very low-margin business which drives just incredible emphasis on efficiency. That allows us to be competitive and deliver good customer service to our customers. We use IT to drive automation, to drive good strong operational processes. We also use IT to deliver capabilities our customers' value. So for example, we've developed a rebate management system that Technology Solutions customers use to make sure they maximize their rebate draw as they sell products from people like IBM and HP.

Knowledge: What's a rebate draw?

Phillips: These are the rebates that our customers get for meeting certain sales targets that are set by people like IBM and HP. The rebate draw is how much of the rebates on offer that they actually draw down because they meet the specific sales activities. Our service details all the rebate programs that are in effect and applicable to our customers. It allows them to see where they stand against those rebate programs, and they can see what sales activity they need to deliver to maximize their rebate draw.

Knowledge: That's very interesting. I had no idea that rebates operated on B-to-B level like that, but it makes perfect sense.

Phillips: Well they're a very useful tool particularly for the manufacturers because it allows them to fine tune the sales behavior they wish to see in the marketplace.

Knowledge: At the conclusion of your talk that Avnet is moving from being a products business to a services business. That has to have a huge IT component.

Phillips: It does. So as we look at the marketplace, selling products of course will always be important to us. What we've seen is demand from the marketplace for services, for example in our components business, it may be related to management of the supply chain of our customers, so they can make sure they've got the right products that we sell in the right place at the right time for them.

If you think about our computer products business, we may be not only selling service or computer hardware, we may also be selling services to help set up some of that hardware. We may be selling them cloud solutions that allow them to get the same service, but not on products that they keep in their data center.

Knowledge: Our students in our sales and marketing initiative are very interested in knowing how best to approach people who are at the very tops of their companies, who are making the large decisions. What's the best way to get through to someone like you if, for example, I had a great product that I think you need.

Phillips: Okay. First of all, sometimes suppliers focus too much on talking to those senior people in an organization. So if you think about purchasing decisions, for example, or decisions to invest in certain technologies, etcetera, it's not always the C-level person that influences or makes that decision.

Typically, they get to approve that decision, but the people that are actually going to use the product or the service will in most organizations be very influential about selecting the partner that's going to give those products or services. However, if people do need to get to the people at the C level or senior executives, I would say do your research. Find out about the company you're trying to sell to.

In some cases, find out about the person, the C-level person that you're trying to sell to, and make a personalized approach. Email is fine, so that's a preferred method for me. That means I can take a look at what's being proposed, and I can make an assessment of that. A phone call can be fine, but sometimes the time isn't always right for a phone call. I think the key is make it a personalized approach that's tailored to the needs of the person you're trying to sell to, rather than focus on the product you want to sell.

Knowledge: I wonder if there's a two-level approach here. It seems to me what you talked about, in getting to know the managers who will actually be using the product, is a relationship building thing. Then perhaps you would want to create an awareness on the C level …

Phillips: I think you're right on. So the best partners that we have at Avnet in terms of people that sell to the IT team — the best partners keep relationships going at multiple levels in the IT organization. Whether it's the people that operate the equipment; perhaps some of the engineers or architects that specify the equipment; whether it's the very senior executives, building a relationship, building a value proposition across those multiple levels is very important I think.

Knowledge: Very important. Over the years, of course, you've held a number of leadership positions and currently, you're the CIO of Avnet. I wonder if you could talk to us a little bit about what you've learned about leadership through the years. What do you define as leadership?

Phillips: When I think of the question of leadership, I don't think of it in terms of technology. I think of it as a business leader primarily. Fundamentally, as business leaders, our job is to make sure that Avnet meets the expectations of all of its stakeholders, shareholders, customers, suppliers, employees.

That's not a technical matter; that's about leadership. So we think about playing for the long run; we want to make sure that we help Avnet succeed over time, as well as in the short term. That means that we take a long-term view of our investments. We take a long-term view of working with our employees and working with our suppliers and customers as well.

Knowledge: I wonder if you might be able to think of an example of where you've had to apply this kind of strategic leadership at Avnet.

Phillips: There's a lot of greenness, a lot of abstraction that you have handle as a leader. There's sort of a balancing act, I think I'd describe it; a lot of different and sometimes conflicting needs, and good leaders know how to work through that balancing act.

So maybe an example; if I think about it, a typical priority for most companies and for most leaders is to manage growth. We want to grow; we want to succeed in the marketplace; but we also want to look after the day-to-day detail of making sure that when we make a commitment to a customer that we meet that commitment.

So we deliver their order on time, every time. We get the pricing, and we get details of the order right, for example. Sometimes we juggle handling that growth, which implies investment and change; but you've got to balance that with operational excellence and making sure you're delivering what the customer needs correctly every time.

Knowledge: I noticed a theme you struck when you were talking about this leadership balance with our students. You talked about embracing trends, but on the other hand, being conservative about your investments. Earlier in the talk, you said sometimes it's the newest thing is not what business wants. Business wants the thing that works. So it is that. There is some tension there isn't there?

Phillips: There's a natural tension, and I think successful leaders embrace that tension and use it constructively. Maybe just to flesh out an example: so as the IT leader of Avnet, we want to make sure that we're taking advantage of new technologies.

Sometimes that means we're taking some risk, so sometimes you want to use technologies that may not have been around in the marketplace for too long. They may be relatively new. They maybe a little unproven, but we want to use that technology if it can deliver business value.

Then on the other hand, if I think about the very systems that we run the business on: perhaps our warehousing system, or the auto-management system. We really want to be relatively conservative and use tried and trusted technologies that we know work every time without any gaps or flaws in any way.

Knowledge: There may be a way of trial-ballooning some technologies? See how it works and then maybe roll it out?

Phillips: That's exactly the approach that we take. If you think about all the management systems and our warehousing systems, we want to use tried and trusted technologies that we know will work every time. Then to your point, we then test out new technologies in a relative controlled way. In way that, if for some reason they didn't work, they wouldn't have any impact on our customers.

Knowledge: Well you talked about some advice for our students. You also talked about Avnet's values, and I think that there were some common threads. Can you tell us about those Avnet values and how they cascade from most important?

Phillips: At Avnet, we have a core set of values, and we talk about them a lot. Dialogue is important with our employees. That makes [the values] real, fresh and relevant. Those values we actually list in order. We stack rank them in terms of importance, and if there is ever a conflict between two of the values, then the higher in the stack value is the one that's considered the most important.

Our most important value is integrity; integrity in the marketplace and in our business. Second is customer service — keeping that focus on our customer. And accountability; taking accountability for actions is key for us. Teamwork. When you get into the workplace, teamwork is very important; and then lastly innovation, so challenge in the paradigm the way that we work today. Making sure that we adapt into the marketplace as the marketplace evolves.

Knowledge: At the top of the stack then is integrity, and integrity is something that every individual defines for himself. Can you talk about what integrity means at Avnet?

Phillips: Well we have something we call the billboard test at Avnet. The billboard test is all the actions you take in the workplace, all of your behaviors and the way that you operate. If they were displayed on a billboard, would that cause you any angst or any problem from a personal integrity point of view?

I think people go to college, and they learn at university and they learn a lot of technical skills — whether that's in sales and marketing, or whether that's in IT or product engineering, etcetera. There's another quality that people must have and it's integrity. That relates to them as a person and the brand of them as a person which, ultimately, I think, something I've learned over the years, is a very important thing.

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