James Tan, vice-president of human resources APAC for Avnet Electronics Marketing Services (EM) Asia, talks to Rebecca Lewis about its journey to grow revenue by focusing on training leaders.“Any programme not helping the company to perform better will be out the window in a second,” says James Tan, vice-president of human resources APAC, for Avnet Electronics Marketing Services (EM) Asia.
It’s a bold statement, but one the company truly believes in following a long journey over the past seven years to build the company’s HR framework from scratch.
Since joining the company in 2006, Tan has worked with his team to invest in Avnet’s overall infrastructure and training with the solid goal in mind of driving revenue.
The company’s goals
Avnet Asia, part of the US-based Avnet, which is a distributor of semiconductors, connectors and electromechanical components – and a Fortune 500 company – pulls in global revenue of about US$25.6 billion (SG$32 billion).
About US$4.6 billion (SG$5.7 billion) of this comes from the Asia business alone, which is good, but not good enough for Tan.
Right now, we are sitting just under $5 billion in revenue, and our ambition is to double this in the longer-term, probably over the next five to seven years. So we ask ourselves, how do we get there?
“There was also a need to create a bigger pool of talent – a diverse pool of talent – who most importantly had a strong commercial mindset. This begins with a solid training programme, which we needed to deploy.”
Starting from scratch
In the past, distribution was Avnet’s primary focus, with little or no emphasis placed on training people. Because of this, leaders were more or less left alone to sink or swim.
Tan was compelled to change the organisation’s structure and proactively build a leadership pipeline – knowing the Asia region was poised for growth in the coming years, probably ahead of Europe and America.
“Basically, there was nothing to begin with,” he says. “One of the jokes I tell my global president is that no one planted any trees in the early days, so now we’re all sitting here basking under the hot sun.”
It called for drastic measures and hard work. After talking in depth to about 25 directors about the needs of the company, he went to work with his team to formulate a people and organisation strategy. This included everything from revamping HR systems through competency models, reviewing salary structures and introducing new incentive programmes, to overhauling talent management strategies and putting in place some solid leadership development.
Avnet’s US office already had – and still has – what it call the GOLD programme for top managers (the “tip of the iceberg”, Tan says) but he knew the most critical group for growth in Asia was front-line leaders, and being able to encourage a culture of turning leaders into coaches to sustain development.
Tan says he gained inspiration from a global leadership survey done at the time, which concluded that to have a world-class company with top-notch performers, there was a need to have a strong multi-level approach to development.
From that, the company started building its leadership development programmes – for front-line managers and a leader management programme – and its vision from the beginning was clear: it was to be more than just courses; it was to focus on development marked by senior management support to deliver measurable performance improvements.
Changing the leadership behaviour
“Our idea is that no one can do a better job in training than our own senior managers,” Tan says.
Within its new programmes, Avnet co-opted all the senior line leaders to come onto the programme and encouraged them to invest time and training into coaching their team members.
“Essentially, we wanted a team of trainers – not just in HR – but from the line as well.
“This has worked for us, this leaders as teacher approach, and we encourage and say that leaders must be involved with us in developing our people. We also have leaders that join us in helping to build our curriculums – they are the subject matter experts, so it’s all geared towards performance.”
This approach was one of the three levels involved in the implementation of its Front Line Leadership (FLL) programme, which was provided by DDI.
As well as transferring learning to managers in-house, Tan needed the programme to address critical behaviours to build performance capabilities, as well as needing courses in multiple languages because many frontline leaders are based in China and Taiwan.
Through this programme, leaders go through a variation of courses, from the “essentials of leadership and coaching for success”, to building additional skills though courses such as “setting performance expectations”, “coaching for improvement” and “managing performance problems”.
“In HR and training, many companies are concerned about generating nice programmes that have little bottom-line impact,” Tan says. “When we first came on board the focus was really on ramping up performance, but now we’ve evolved into this emphasis on performance leadership because this is what we need to do to be the best in our industry.”
“Really, training is about helping the business to perform better,” he says and, as mentioned above, anything that doesn’t help the company do this will be chucked out.
In addition to the FLL programme, Avnet focuses on young managers with a programme that is catered to 25 people every year who are handpicked from across the region.
This programme has worked so well, the company has named it as one of its best practices, and the corporate office in the US has granted funding to open an assessment centre in Singapore.
This, says Tan, is how it will reach its goal of doubling its revenue in Asia.
“The leadership structure and the management structure must be sound for us to have that vision moving forward. At this juncture, it’s good for us to look at our leadership competencies.”
And this focus is not likely to change. Even during the GFC in 2009, when Avnet – and everyone else – was cutting back, the company refused to compromise its training programmes.
We were careful with our money, but our aim is that with every dollar spent we are seeing the pay back.
Tan says overall, one of the biggest results has been Asia’s growing importance to the overall business revenue. Back in 2006, the Asian business was contributing about 20% of the overall global revenue – whereas now it’s about 35%.
That is partly because of the efforts in ramping up leadership, but Tan also admits Asia is simply helping to close the gap after Europe and America’s revenues started to slide.
However, the impact of Asia’s new leadership programmes has been so extreme the US office adopted the same model – just compressing it down slightly and adjusting it for the local market.
Tan is also proud to share that now, employees are not only giving great feedback about the programmes, but are actively participating in giving the company feedback overall. With its employee engagement surveys, it now has a 97% participation rate.
“This shows us employees care enough to give feedback,” he says.
The company’s engagement index sits on the 77% mark, which is 10% above the global high performing norm, and the commitment index also sits about 12% higher than the global norm.
“We are in a good position right now because most of the earlier concerns [about training] have been addressed.
“Our global CEO likes to show a chart that shows our overall revenue generated alongside the employee engagement scores. Over the last seven years, our engagement scores have gone up and, corresponding with this, our revenue has gone up too.
“In 2005, our revenue was under the US$2 billion mark, so that gives you some indication of the impact. It’s still a journey for us, though.”