CORPORATE CASE STUDY: Avnet's brand gets a boost by embracing the media

Now under a PR-savvy CEO, formerly media-wary b-to-b tech company Avnet tries to keep its staff enthused, reporters impressed, and the competition nervous.

Now under a PR-savvy CEO, formerly media-wary b-to-b tech company Avnet tries to keep its staff enthused, reporters impressed, and the competition nervous.

Al Maag knew he had steep PR hills to climb when he took the chief communication officer's job at Avnet in 1998. A complicated, unglamorous, some might say obscure b-to-b tech company, Avnet scraps for media attention in a desert city where national correspondents seem as rare as rainfall. Previous management had virtually blackballed some publications that printed less-than-ideal articles, and talking to reporters back then cost one or two PR people their jobs, Maag says. But in the last five years, support from a new, communications-friendly CEO has helped Avnet's PR team scale great heights. It has done so with an overhaul of the anti-media corporate culture and by concentrating on branding, all the way through carefully explaining how Avnet fits in the technology space and the coverage of it. That second syllable might make Avnet's name sound a bit like a techie affectation, but the company actually predates the information age by generations. Charles Avnet began the business in New York in 1921, selling surplus radio parts in port cities to shipping companies, inventors, engineers, and ham enthusiasts. Through the years, Avnet adjusted his wholesale inventory to accommodate technological trends from electronic components to semiconductors. As the company grew, it acquired many competing distributors. "They have done an exceptional job, along with Arrow out of Long Island [Avnet's closest competitor], with taking over the world," contends Ed Sperling, editor-in-chief of Electronic News Online. Avnet took in $8.9 billion in revenues last year, and is the largest public company in the desert Southwest. Avnet buys the ingredients of technology, adds value to them through enhancements (like programming) or services (like supply-chain management and systems integration), and sells them to some 100,000 customers globally. It's an authorized distributor of components and computing products manufactured by the likes of IBM, Motorola, Intel, and Texas Instruments. "Avnet was a superb advertiser when I first got to know it in the 1980s," Maag says. "They were as bad at PR as they were great at advertising." Maag worked for Avnet in California in 1989. The homesick Chicagoan, apt to launch into a Jake Blues impersonation at the drop of a black fedora, didn't stay on the West Coast for long. "One earthquake was enough for me after they found me under my desk," he jokes. He found the company's culture as distasteful as the shaky ground. Electronics-distribution companies traditionally keep low profiles, but previous Avnet CEO Leon Machiz's distrust of reporters went further. "He scared the hell out of everybody that they shouldn't talk to the press," Maag claims. Changing the comms culture As a PR consultant, Maag later worked for one of Avnet's many divisions before CEO-apparent Roy Vallee, a 27-year company veteran, invited him to move to Arizona and build a communications program. Maag brought with him PR VP Jan Jurcy, another Chicago consultant who had worked with him at component manufacturer Molex years earlier. "Roy changed that culture," Maag says. "You knew his business ability was there, but his people skills were even better. We absolutely understand the benefits of working with the media." Being both a company officer and the head of PR is unusual in the tech industry. Maag oversees corporate PR, community relations, creative services, and a strong employee communications program. He also supervises an in-house video production service that works for internal and external clients. Maag meets regularly with IR VP John Hovis and the marcomms leaders within Avnet's three operating groups and its shared business services unit. Operating-unit spokespeople court trade journalists, while Maag's staff targets national press. Overall, Avnet has more than 40 PR and marcomms people, and another 60 or so marketing staffers. To showcase excellence, Maag established an internal awards program that brings company communicators together for an annual luncheon, as well as recreational outings. Among Maag's first challenges at Avnet was selling the idea of media relations internally. "It takes a while to convince people that we should talk to the press," Maag says, recalling that he or Jurcy sat in on most executive interviews early on. "Eventually, people started realizing this isn't painful." To build leadership's comfort level and fluency in talking to reporters, Maag hired outside trainer Kathy Kerchner, who teaches what he calls "Avnetized" media relations classes for executives every two months. Within his first year, Maag also searched for an AOR and settled on Brodeur, a tech-focused firm with a Phoenix office. He convinced the operating groups to use Brodeur as well, preferring not to work with multiple firms. "In many ways, I consider Avnet to be more than one client," says Sonia Bovio, a group manager with Brodeur. The agency works closely with Avnet's communications team, supporting the company in 14 foreign countries and providing valuable national media contacts. Improving analyst relationships Meanwhile, IR officer Hovis jumps his own hurdles. "Three years ago, when I began this role, I could not get through a conversation with analysts that did not include a conversation about why my company wasn't going to be 'disintermediated' by the internet, or contract manufacturers, or third-party logistics providers." In the boom days, many analysts thought direct transactions would put technology middlemen out of business. Undoubtedly, Avnet suffered the bust like other tech companies. It laid off one-third of its 15,000 employees (including two in corporate communications), saw its debt rating downgraded, and experienced its first unprofitable year in four decades during 2002. But Avnet still stands, and Hovis has convinced more sell-side analysts to cover the company. "People buy products because of the technical capabilities of our salespeople," Maag says, noting that some of Avnet's customer relationships span 40 or 50 years. "We create demand, we don't just take orders." Maag's more recent projects include a branding initiative. Avnet marketed itself under a collection of acquired brands when Maag joined the company, but it has since eliminated most of them and put the Avnet name out front. Last year, Avnet hired branding consultant John Willie to interview managers, customers, and suppliers, and commissioned several quantitative surveys. "We agreed it wasn't me responsible for the company's brand, it was the executive board," Maag says. The exercise culminated in a daylong meeting indoctrinating executives and developing the tagline "Enabling Success at the Center of Technology." Avnet unveiled a new logo in December, is using the tagline internally, and plans to incorporate it into IR materials soon, Maag says. Trade journalists who cover Avnet agree that the company's media relations skills have improved greatly. "They're acting like a real multibillion-dollar corporation," says Laurie Sullivan, associate editor of Electronic Buyers' News. "I'm very impressed with their ability to change things around." Although Avnet now leaves competitors in the dust where media impressions are concerned, PR challenges remain. Explaining to business and tech reporters how Avnet fits into their beats can be difficult, as can getting attention in a geographic area the national press often overlooks. To compensate, Maag schedules interviews for executives when they travel on other business, and brings reporters to Phoenix whenever possible. "People on the East Coast don't mind coming here in the winter," he quips. Maag says he wants sales reps from competing companies to fear seeing Avnet personnel in customer lobbies. He describes his proudest moment as overhearing a competitor tell CEO Vallee, "God, we're tired of reading about you." "For better or worse, most folks know who I am when I travel, and their knowledge is based on our PR efforts, not advertising programs," Vallee says. "Al and his team are always in the background, but their fingerprints are on almost everything we do." ----- PR contacts Chief communications officer Al Maag VP of PR Jan Jurcy Corporate video services VP Clay Stubblefield Employee communications director Michele Spiegel Community relations director Teri Radosevich IR officer John Hovis Electronics marketing, worldwide marketing and communications SVP Sean Fanning Applied computing, marketing VP Charlie Babb Computer marketing, marcomms director Michelle Gorel Shared business services, communications and CRM VP Terry Cain Outside agency Brodeur

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