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Arrow Electronics | 2023 World's Most Admired Companies

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Arrow Electronics

Arrow Electronics | 2023 World's Most Admired Companies | Fortune

Sean Kerins says his “foot is on the gas” when it comes to hiring tech talent.

Arrow Electronics' new CEO says supply chain is doing better, but still not back to normal

Leadership

Arrow Electronics' CEO: Supply chain better, but not normal

Sean thank you so much for joining us to talk about arrow electronics. You know, most people probably don't know about the critical role that your company plays if they're looking to buy a car, like an electric vehicle or a smartphone or some high tech home appliance? Tell our viewers exactly what does Well Susie, we're a global technology distributor and that means we help some of the biggest names in technology get their products to market. And that could be everything from semiconductors to data center computers, to cyber security appliances, to software and cloud solutions, You name it. And you know, we like to say an arrow that if a device takes an electronic charge, there's a good chance that we probably played a role in designing it, building it and certainly selling it well last year there was a big shortage of chips, semiconductor chips and we all know that there were long wait times if you were looking to buy any kind of electronic device. What about now is that chip supply crunch over? There's been progress for sure. Are all the issues fully resolved? No. And the way we know that is we see, you know, lead times for all the semiconductor technology that we helped sell are still twice their pre pandemic average. And that means that, you know, if you just bought a car a few weeks ago or if you're still waiting on something you ordered for home automation. I think we got a little ways to go before supply and demand fully normalizes and those lead times can become more predictable. What are you hearing from your other customers? Besides the consumers, you sell components to big companies like Microsoft or IBM Panasonic, what are they telling you? So they're seeing a couple of things. One in fact in places they're still working their way through inventory that built up over the past couple of years while they waited for that, that famous golden screw. And they're also telling us that they're now starting to re evaluate their own supply chain processes, that they get better visibility to semi semiconductor supply going forward. And despite all of that, your company just reported very strong sales. In fact you told investors they were the strongest financial results of any year in the history of the company. So can you keep up that pace or can you do better in 2023, given everything you've told us, I think there's enough uncertainty out there to uh to tell us that, you know, looking much beyond 90 days is going to be a bit of a challenge. Having said that we still believe in the big mega trends over the long term and you know, we want to come out of this year, even if it's more challenging in a position to really hit the ground running in 2024 beyond. So we're gonna stay invested in our our growth priorities as best we can. So what if the U. S. Economy goes into recession, what does that do for your plans? Well, you know, I think this is a time where the phrase uh cautiously optimistic is very appropriate obviously if a recession were to occur more deeply, you know, we're certainly well prepared. I think the big question is you know, are we in for a moderate decline over a reasonable period of time or are we in for something sharper and longer lasting? And there's still I think a number of variables to play out including you know, the question around you know, when does the chinese economy get back up on its feet? Well whatever happens with the economy and the business environment, I understand that you are laser focused on hiring, tell us why what is your thinking on that? Well look, we think beyond this year we think the you know the big technology megatrends are all lining up in our favor. You know, we talk about the electrification of everything, you know, E. V. In the automotive industry is a great example. We talk about, you know, the automation that we're now seeing embraced in the medical device and healthcare industry. We think that's a great future market for us as well. So I think the job of any Ceo and his or her team uh in a more challenging year is to make sure they emerge even stronger uh than when they came into the year. And so we know exactly where we think growth will come from long term and for us that means more sales capacity, that means more engineers. And that means more people to be able to help our big customers and suppliers manage their supply chains. And I really don't want to take the foot off the gas when it comes to those disciplines uh for our prospects down the road. Well, are you finding it easier for Arrow to find top talent given that there are so many talented tech people looking for jobs right now? I wouldn't call it easy. Um and I would say attrition is still higher than it's been historically across the industry. So we've developed a pretty good motion around, you know, constantly looking to replace people that may have left at the same time looking for new talent to fill uh new roles that we're investing in. I think our our HR team does a really good job sourcing from all kinds of places. And um you know, I'd say we're keeping up pretty, respectively, you've also made it a priority to hire and promote more women in leadership positions. You've said we need to do better. How's that going so far? You know, Suzy, I've always believed that, you know, we're going to be most effective when we look like the world around us and so we're making progress, you know, building a more diverse uh workforce, not just in the individual contributor ranks, but also at the top of the house. I'm really proud to say that we now have four women on our executive committee, but don't get me wrong, there's still a lot more for us to do. Well sean, let's talk a little bit about you, you became Ceo of arrow just last summer and this is the first time that you've been Ceo, what's the most important leadership lesson that you've learned so far as you're running a huge fortune 500 company? You know, I'd say two things. The first is learning is paramount as a ceo. You now encounter things that maybe you never did before in your career. So you've got to be willing to probe and learn, uh, each and every day. The second is you've also got to learn how to let go and rely increasingly on others to get the right things done for your company. And I would say I'm making progress with both, but it is a journey. Well you said many times that you learned a lot about team building and leadership from playing basketball at Syracuse University, you are the captain, you were the star player. And what would you say that college sports taught you about leadership? You know, I think sports is a great proxy for what you'll find in the professional and working world. Uh, you just don't happen to know it at the time, but you know, being part of a team means you're part of something bigger than just you. Uh, and there's a lot of reward in that. But great teamwork comes with lots of trust and lots of sacrifice and that's a lesson that stood with me over time. I think the other things you learned from competitive support, competitive athletics at a young age is this idea of overcoming adversity when things don't go well, this idea of persistence and work ethic because you know, you don't get good overnight, you get good over time. Um and that's true of companies and leadership as well. Uh you know, you've got to continue to work on the skill sets that will make you better. Well, your coach at Syracuse University was the legendary Jim Boeheim. What's the best advice you got from him about leadership when it comes to coach Boeheim? He was the one that taught me that as a leader. It's all about the examples you set and the deeds you do not the words you speak. And that's a lot about, it says a lot about how I think about leadership now as the Ceo of Arrow electronics. Well let's talk about that because in the corporate world, the job description for Ceo has changed so much over the past couple of years. The expectations um from customers from employees and from even the public has really increased. So knowing all of that, how would you describe the way that you want to leave Arrow electronics? You know, I think listening is more important than speaking, I think being accessible uh to your leaders and their employees in the right ways at the right times, uh, means a lot to them. I think being able to show them that you'll never ask the organization to do something that you're not willing to take on yourself. And being someone who, everyone understands, uh, will ensure the company always does. The right thing goes a long way to, you know, our character and our values going forward. And I will, you know, remain committed to those thoughts.

Mike, one thing about technology, there's always a new innovation, and this puts a lot of pressure on you as the CEO. What do you think is the most important thing you need to do as a leader to be successful? The most important thing I have to do is communication. I have to communicate with our customers to see where they're going, I have to communicate with our suppliers to see what they need from us to be successful. And probably the biggest part that I have to communicate with their own employees and I don't mean just my director parts, I actually have to go down into the business and ask questions to a lot of people and sometimes that's uncomfortable because they're a not used to the CEO walking around and saying what do you think about XYZ, it puts them on the spot. But the truth is, that's how I get information. So, what is your leadership style then? Well, my leadership style is all about helping our employees get engaged and then turning them loose and letting them sort of rise to the top. Arrow wouldn't be successful today if it wasn't for all 18, 000 pulling their weight. And that's what we need. My grandfather was a person that probably gave me the best advice as I was growing up and we were in the field, throwing hay on a wagon and he said " You know son, every pair of hands is an equal pair of hands. And that is so true today. It was true then, and I think it will be true into the future. What you really are putting so much emphasis on innovation and having everybody in the company be much more nimble about that. How do you develop a team of readers on every level of the company? I spend an awful lot of time Doing town halls with the employees. Talking about the trends that I see. Talking about the new things that I see coming. And it would be amazing. After these town halls I'll get two or three hundred emails of people agreeing or disagreeing with me. Or saying could you look at it a little different. And that's really what I'm looking for is feedback and direct feedback sometimes. With this philosophy that you have. Did it influence who you hire and who you let go? Of course. All I want to hire are people who are better than me. People say that but I firmly believe that. How do you find those people? What is your Key question that you ask in an interview when you're looking for these leaders? What do you want to be doing five years from now? It's a very simple question. That will tell me whether or not they have the vision to see where technology is headed. So you've been in business a really long time. Your career has taken you to so many different levels of leadership along the way. As you look back, what is the best advise that you've ever gotten when it comes to leadership? The best advise I got on leadership was to always make sure that whatever I'm asking somebody to do, I would do myself. It's guiding somebody To make sure that I get the best out of them, and the only way that I can do that is if I respect their position, and I respect what they're doing. And when there's 18, 000 people in there, whether it's the janitor or VP of Sales, I want clarity in what their work is every single day. [ BLANK_AUDIO ]

Arrow Electronics CEO: This Is the Key to Success

Even though it might make employees uncomfortable.

Even though it might make employees uncomfortable

Mike, your company, Arrow Electronics has operations not only in the United States but all around the world. What's your take on the global economy right now? I believe that North America has been relatively flat. We were fortunate to see North America grow this last trend. I think there's still a steady pace of growth in Europe And Asia has while stalled, still growing. I expect it to continue to grow. Maybe not at the twenty percent, maybe at the five or six percent range but either way I think we are coming on some growth areas. While China is slow the United States is slow I mean we are growing at a Half of a percent. How can you grow and make money? If the economy's not growing there's always a segment that may be hurt. Right now it happens to be the industrial segment. And the industrial segment is a bread- and- butter segment for the US. It creates the manufacturing jobs that matter. And if they're hurting, we're hurting. So the truth is, we need programs to get them back on track. When you talk to your customers and their CEOs, what are they telling you about their ability to spend more? They're opening up their checkbooks. But they're opening up their checkbooks in different countries. You know people that have cash strapped in China, instead of letting that cash sit there, they're now putting it to use in China. If they have cash strapped in Europe, they're now putting it to use in Europe. But that money is not coming back to the U. S. It is being spent in other countries. And I think you're going to continue to see that because innovation will go forward no matter what the policies are of the U. S. And people will spend money and people will be successful. It's just what region will they be successful in? What about at Arrow Electronics? Are things strong enough and good enough that you're spending more and that you're spending more? We plan on spending more money this year. We plan on expanding. You will see acquisitions in the digital space by us. You will see acquisitions in the media space by us. We will be doing acquisitions in Asia- Pac. We will be doing acquisitions in Europe. We are a company that services manufacturers so we have to build capability in the world no matter where they land And then support them, and we'll continue to do that. Mike, it looks like interest rates are gonna be staying low for a while now, do low interest rates work for or against Arrow? Low interest rates are great when we're acquiring things. They're great when you're looking to invest money, but they usually indicate a sluggish economy. Overall, I think we'll compete in any interest rate market, but we really prefer the markets to be expanding, and we prefer things to be growing. When you look at the dynamics of the global business environment, what worries you most? What worries me the most is the productivity enhancements that we need to keep the American worker successful. And what I mean by that is that we have workers all over the world, but in America specifically they need to be retrained. They need help. They need productivity tools. Technology is the only way they're going to get those tools. Technology is the only way we're going to get more productive. So, if we don't get the spending and the buying in the US, the American worker isn't going to get the help they need. [ BLANK_AUDIO ]

CEO Michael Long explains what the company is looking for.

Arrow Electronics

Company Information

World's Most Admired Companies
As of 2/1/2023

Arrow Electronics

Company Information

World's Most Admired CompaniesAs of 2/1/2023

World's Most Admired Companies
As of 2/1/2023