Vallee opens up on succession plans
Avnet chief praises his successor as he prepares to hand over the reins in July
Roy Vallee will stay on at Avnet as executive chairman for at least a year after handing over the reins to successor Rick Hamada.
As announced earlier this week, Vallee is stepping down from the chief executive position of the distribution giant in July to coincide with the end of Avnet’s fiscal year, and taking up the executive chairman role.
The distributor celebrates its 50th birthday this year and recently posted record second quarter results, with a 40 per cent jump in revenue and a near 37 per cent rise in net profit.
Speaking to CRN, Vallee said he had originally agreed to be chief executive for a decade, but the plans had gone slightly awry.
“When I was offered the CEO role, after thanking the board for putting their trust in me I said that if successful I would like to do this for 10 years. I’m now in my 13th year of a ten-year plan!” he said.
“Running a big corporation is obviously challenging from a physical, emotional and intellectual perspective. At certain intervals turnover of CEO brings new ideas to the company that is in the best interests of a company. If a CEO is changed too frequently it is not good, but it is also not good if they change too infrequently.”
Vallee hinted that it was time for him to start looking at other options.
“On a personal level I have been with Avnet for 34 years and been in distribution for 100 per cent of my adult life. I’m 58 now, and it is time for me to take a little time to explore life outside of Avnet and distribution. It is the right thing for the business and the right thing for me personally,” he said.
He reaffirmed his confidence in his choice of successor, saying Hamada had worked alongside him for the past five years since his promotion to COO, and has worked at Avnet longer than he had when he secured the chief executive title.
“I was looking for an intersection of two things for my successor to be ready to go – I wanted the business to be performing well so the new CEO didn’t have a number of fires to put out, giving them the opportunity to collect information and get into their stride and not having to react when coming out of the grid.”
He said the time was right for the change, with everything aligning according to plan.
“We added the president title to Rick in May and a board meeting this month showed all the dominos had lined up, so we made the announcement of the transition. This has been planned for years,” he added.
Vallee said he plans to remain "very active" under his one-year contract as executive chairman, and said after the year was up he would "see what happens".
“I don’t want to be one of those former CEOs that is hanging on and looking over my successor’s shoulder. Rick asked me to stay on, so I agreed,” he said.
Part of his role will be to stay involved in strategic (M&A) transactions, something which Avnet appears to be planning a few of this year. He said Avnet is likely to carry on making acquisitions in areas where it has lower market share.
“The Technology Solutions business in EMEA is still a candidate [for M&A] - we think there are more opportunities there. There is also a lot for us to do in Latin America as well as Asia,” he said. “Our components business has relatively low share in Asia including Japan so we will be looking at more deals there.”
However Vallee said his "number one" priority is ensuring a smooth and seamless transition.
“I will be a sounding board and I have tremendous confidence in the selection of Rick. I’m very confident that he is going to be a hit with new challenges and will take the business to new heights. I will also help out on any strategic projects I’m needed on, and will let Rick point me in the direction he wants me to get involved in, whether this is organic growth of parts of the business, or helping with the strategic growth of Avnet executives.”
Read more of CRN's interview with Roy Vallee in 27 February issue.