1. Growing Service Solutions Business Marketing Association January 17, 2012
Steve Church
President, Avnet Integrated Resources
Chief Corporate Business
Development & Planning Officer

2. Session Agenda Avnet Overview Historical Context Employee Engagement
Customer Loyalty
From Service to Services
Lessons Learned
Avnet Museum 2

3. A Little About Me Board member
Texas A&M University’s Industrial Distribution Program
ASU’s Center for Services Leadership, W. P. Carey School of Business
Bachelor of Science from Cal Poly Pomona
Three kids, two cats
Avid golfer, Red Sox fan, and grandfather

4. Forget about that, it’s all about my Grandson!

5. Avnet Overview Founded in 1921 50 years on the NYSE
No. 132 on 2011 Fortune 500
Fortune’s Most Admired for Technology Distribution: , 2010, 2011
FY ’11 Revenue = $26.5B
300+ locations in over 70 countries
300 suppliers/100,000 customers
72 acquisitions since 1991
17,000+ employees worldwide TS
43% EM
57%
FY’11 - $26.5B
Asia
25%
Amer
43%
EMEA
32%

6. Avnet’s Strategic Framework
Premier Technology Marketing,
Distribution and Services Company, Globally
Deliver Industry-leading Economic Profits
Be the preferred partner to our customers and suppliers
Profitable
Growth
Enhance efficiency, productivity and the customer experience
Operational
Excellence
Attract, engage,
develop and reward
the best employees
People
Development
Performance- and Values-based Culture of Excellence
1. Integrity
2. Customer Service
3. Accountability
4. Teamwork
5. Innovation

7. Historical Context

8. About Change Management Practices
It is always easier to implement major change initiatives when a “Burning Platform” exists
I didn’t say it was pleasant, just easier
tech implosion was our burning platform
Are employees in or out? 8

9. Change… Everything is Changing. It always will.
Winners recognize patterns using the fewest number of dots. 9

10. Where Our Journey Began
Tech Implosion of 2001
Cataclysmic revenue decline
60% of WW semi sales
40% AVT Inc. revenues
Aggressive remedial actions for 8 quarters
Reduction of 35% of global workforce
Reduction of $2B WC and debt
Revenue & Expenses

11. Post Bubble Outcome Emerged stronger Balance sheet Operating leverage
Talent
Resolve
But what about declining margins?
Shareholder Value Creation? 11

12. Avnet Launched Two Major Initiatives
Value-based Management
Most successful change management initiative in Avnet history
Services and solutions
Took years to realize
Driving Value
+ Driving Growth
= Premier Faster!
Why the difference?
VBM was an extension of our core business
Services/solutions was not

13. Employee Engagement

14. The Service Value Chain
Smart people management leads to a more productive and engaged workforce, a more loyal customer base and higher shareholder returns
People Practices
Employee
Engagement and Organizational Climate
External Service Value
Customer Satisfaction
Customer Loyalty
Profitability
Revenue
Employee Retention
Employee Productivity
“Putting the Service-Profit Chain to Work,” Heskett, et al., – Harvard Business Review

15. What is an engaged employee? Commitment + Line of Sight = Engagement
The Engaged Employee
What is an engaged employee?
Commitment + Line of Sight = Engagement
Commitment: Motivation, Emotional Bond
Line of Sight: Employees understand where the company is going and what their role is in helping the company get there

16. Engaged Employees They become engaged because:
They believe their work is meaningful
They trust and respect senior management
They have a healthy working relationship with their supervisor based on goals and feedback
They are proud of their company’s brand
They believe they are receiving the training & development needed for their current job & the future

17. Why it Matters They have an emotional connection to the company
They are willing to go above and beyond because they want to, not because they have to
They are our best recruiters
They are invested in making the company better
They are loyal
They believe in the mission of the company and live the core values every day
Performance
Engagement

18. This presents an opportunity!
Employee Priorities shifted during the Great Recession: Employers and employees are out of sync
Ranking*
Employer View
Employee View 1
Competitive base pay 2
Reputation of the organization as a great place to work
Challenging work 3
Convenient work location 4
The business/industry of the organization
Opportunities for career advancement 5
Opportunities to learn new skills
Vacation/holiday/paid time off 6 7
Organization’s financial health
Flexible Schedule
This presents an opportunity!
* Ranking represents the frequency the item was selected as one of the top five reasons an employee would join their firm, from a list of 26 items. Employee data come from the 2010 Towers Watson Global Workforce Study. 18

19. Winner of the “It’s Not My Job” Award19

20. Customer Engagement

21. Customer Service Week Avnet celebrates Customer Service Week globally
For customers and employees
Employees say “Thank You” throughout month of October

22. The Key to Customer Success
Satisfaction
Attitude
Loyalty
Behavior
Engagement
True Partnership

23. From Service to Services

24. Service is Foundational
“If our company delivers poor service on the basics (i.e. processing line item transactions), how likely are our customers to purchase sophisticated services and solutions from us?”

25. The five building blocks for successful PERSONAL change
The ADKAR® Model
The five building blocks for successful
PERSONAL change
Awareness
Desire
Knowledge
Ability
Reinforcement
Awareness:
What is the change?
Why are we doing it?
What happens if we do not do it?
Why now?
Desire:
What is in it for me
Knowledge:
Training & Education
Ability:
Applying the training
Reinforcement:
Practice
Feedback, metrics and compensation

26. What is in a CHANGE PLAN?
Communications (time phased, targeted & specific)
Training (specific to the new way)
Coaching (to sponsors & managers)
Resistance Management (manage inevitable resistance)
Sponsorship (build the coalition by assessing the field)

27. Action Items for Marketers
Understand your companies path for becoming a customer service company
Transition marketing strategies from products to solutions and services
Marketing/communications is critical for successful change management
Keep in mind that successful
change management initiatives
begin and end with solid
communications

28. Employee Engagement / Enterprise Performance
Avnet Employee Engagement
Avnet EPS
Notes about Employee Engagement survey
Commitment from the top
Decentralized process + tools + training + accountability
Consistent survey cycle for over 7 years
Total Employees
9,900
9,800
10,900
11,700
12,800
12,900
14,200
17,600
*Towers Watson and WorldatWork 2009/2010 U.S. Strategic Rewards survey 28

29. Thank You!
Steve Church
President, Avnet Integrated Resources Chief Corporate
Business Development & Planning Officer
Avnet, Inc.
(480)