All Lindsley Ruth has to do now is introduce his new executive team at Electrocomponents plc to the global electronics industry and the investment community. Ruth plans to do this on Nov. 19, thereby wrapping up the first phase of a set of tasks he assigned himself on taking over as Group CEO of the U.K.-based electronics component distributor. Electrocomponents, Ruth says, aims to improve on its agility and customer response as part of its turnaround program and the newly assembled team is core to the achievement of this goal.
Of course, it’s going to take more than a group of fresh faces to make Electrocomponents a more competitive player in a market that remains in flux, buffeted by the weak global economy, geo-political strives, the strong dollar and stiffening rivalry for market share. But in order for Electrocomponents to build on its strengths, solid customer and supplier relationships and long-history in the industry, it must have the right leadership in place at all of the business divisions and in key operative positions, Ruth said in an interview at the company’s head office in Oxford.
“From a leadership standpoint I am confident that we’ve got the right team in place,” Ruth said. “Of course, this is always predicated on performance and I’ve got big expectations in terms of performance. We are going through a cultural transformation but in order to change the culture of a company you must also change the behavior of the leaders. This team is going to take us to the next level.”
And, what a team, at least based on their expertise, experience, educational background, nationality and diversity. When Ruth joined the company only one member of Electrocomponents’ executive team was from outside the U.K. Within six months the composition has changed completely. Now, more than 70 percent of the senior management team are from outside the U.K., better reflecting the international nature of the company’s operations, its growth requirements and the task of raising sales generation globally.
“When I joined [Peter Johnson] the chairman of the board of directors said to me: ‘Are we a U.K. company with international operations or are we an international company that happens to be headquartered in the U.K.?’ ” Ruth said. “The answer clearly was that we are a U.K. company with international operations. We are U.K.-centric in terms of our behavior and that’s not bad but what we were lacking was an international leadership team.”
This has changed. Onboard now are executives whose diverse backgrounds would be similar to those at the world’s leading multinational enterprises. The new Electrocomponents executive team now includes:
Alex von Schirmeister, Chief Innovation Officer – A former executive with eBay, Mexico born von Schirmeister studied in Europe, Mexico and in the United States. He has worked at Booz Allen, Telefonica and eBay, where he spent more than 10 years in various executive positions, speaks four languages (English, French, German and Spanish) fluently and has lived in Spain, France, Switzerland and the U.K. Drawing on his digital experience with both eBay and Facebook, von Schirmeister’s charge is to further drive Electrocomponents’ use of digital tools to enhance sales and innovation programs. “We are very good in digital but Alex is coming in to take us to the next level and make sure we are investing in the right areas,” Ruth said. “We are raising the level of innovation in the company and that’s an area where I am counting on Alex to make a big contribution.”
Mikael Malm, Chief Supply Chain Officer – Malm was selected for his extensive experience in the global supply chain and deep knowledge of the Asia-Pacific market. A Swede, Malm is more comfortable in China where he has held senior positions at some of the country’s fastest growing OEMs. He previously worked at Avnet, Ericsson, Huawei and Sanmina-SCI. Prior to joining Electrocomponents, Malm was COO at Efore, a manufacturer of power products. His other experiences include stints in Asia and Saudi Arabia.
Kurt Colehower, President, RS Private Label – A veteran of the electronics industry, Colehower studied in North America and Europe and has worked extensively in various segments of the electronics industry within distribution, contract manufacturing and consulting. He once headed Arrow Electronics’ components business in the Americas and worked at Solectron, an electronics manufacturing services (EMS) provider acquired in 2007 by tier-1 contractor Flextronics International Ltd. Colehower is moving from Denver to the U.K. and has been tasked with driving growth at Electrocomponents’ private label operation, the unit that anchored the company’s growth through its early years and until the mid-1980s when it expanded into franchise distribution. “Our private label business has more than 30,000 products, most of these not in electronics,” Ruth said. “It’s a very exciting business that I expect to grow very rapidly.”
Klaus Göldenbot, President, RS Components Industrial Division – Göldenbot is a 15-year veteran of Electrocomponents and formerly head of sales for the entire company. His new position resulted from Ruth’s decision to split RS into two divisions, RS Components and RS Industrial. By separating the electronics business from the industrial operation, he hopes to leverage the strengths of the divisions and tap new revenue streams. The industrial business is particularly attractive for Electrocomponents because of opportunities for tapping into new markets and leveraging its digital expertise to drive the consolidation of the sector, according to Ruth. “The industrial market is wide open and highly fragmented so the opportunities are there with our digital side of the market to be proactive in going after market share,” Ruth said. “We’ve got to leverage the resources that we have in the back office and operations where we can deliver outstanding customer experience.”
Chris Page, President, RS Components Electronics Division – Another veteran of the distribution market, Page has been with Electrocomponents for years and previously worked at Memec, since acquired by Avnet Inc., where he headed the Europe, Middle East and Africa operation. Göldenbot and Page are expected to spearhead much of the global growth for the company in the two key operational divisions. Their backgrounds in distribution and extensive knowledge of the European and global markets are key to Ruth’s desire to explore new markets, the group CEO said. “We are simplifying things,” Ruth said. “We are honing in on our value proposition for industrial and electronics. We also want to be relentless in pursuit of excellence and my goal is to build the best sales force in the electronics business.”
Scott McLendon, President, Allied Electronics – Allied was one of the strongest divisions within Electrocomponents in the last year and Ruth said he aims to keep it competitive even as the components distribution business softens at its base in North America. McLendon previously reported to the head of global sales at Electrocomponents but Ruth has changed that structure. The head of the Americas business now reports directly to the Group CEO. His mandate is to ensure Allied continues to grow ahead of the entire market.
Mike England, UK Country Manager – England joins Electrocomponents with an impressive resume and background in sales and business development. He is going to need it. England must help the company answer the question everyone from shareholders to suppliers and employees have been asking, which is: “When will Electrocomponents return to growth in the U.K?” In a statement, Klaus Göldenbot, president of RS Industrial, summed up everyone’s expectation of England who joined the company this week: “We are the largest high service distributor in the UK and this remains an important market for us,” Göldenbot said. “Returning the UK business to revenue growth is a key focus and I am looking forward to working closely with Mike to realize our ambitions.
Now that the “team is in place” as Ruth said, what’s next for Electrocomponents? He is scheduled to lay out the comprehensive picture for how the company plans to drive growth and revive its operations with the announcement of the fiscal 2016 first half results on November 19. In the meantime, though, what’s obvious is that part of that next phase would be completing the process of weaving the diverse group of experts he has assembled into a formidable force that can take the message of the newly energized company to customers, suppliers and investors.
After unveiling his plan and introducing the new management team, which could include a new CFO, Ruth will hit the road for about one month to highlight and inform investors, customers and suppliers about the various changes he is implementing at the company. Once the road show ends, though, he and his new team must roll up their sleeves and prove the formula will work for the company. A lot is riding on their performance over the next months and years, according to Ruth who said the board of directors has been quite supportive of the plan.
“I can’t say enough positive things about our board,” Ruth said. “Our board is highly engaged. As people who have been very successful in leading companies they are a true enabler for us.”
This is the first in a series of articles Electronics Purchasing Strategies will run on Electrocomponents plc and its reorganization plans over the next months. In the next report, we will review the full turnaround program Lindsley Ruth, the group CEO, is implementing. Future reports will focus on specific operational areas within the company and how they complement each other to achieve the management's objectives.