Skip to main content
Strategies
Business Observer Friday, Dec. 2, 2016 4 years ago

Tech giant

Share
The CEO of one of the largest companies in the region, Tech Data, has even bigger dreams. Think Amazon.
by: Traci McMillan Correspondent

Executive Summary
COMPANY. Tech Data Corp. INDUSTRY. IT Distribution KEY. Know your strengths.

As CEO of a company that does $26.4 billion in annual sales, Bob Dutkowsky says his family is what keeps him grounded, reminding him he's just like everybody else.

Staying grounded must be quite the challenge. The 61-year-old CEO leads Clearwater-based Tech Data Corp. The company has 9,000 employees worldwide, and more than 105,000 customers. It partners with big tech companies such as HP Inc., Apple, Cisco and Microsoft to deliver products to information technology resellers.

The company sells around $120 million a day in inventory, with an average order of $2,000. “Do the math, that's a lot of stuff,” Dutkowsky says. “We take products from the leading technology companies, and we package those products together for businesses to run their company.”

In September, the company announced its planned $2.6 billion acquisition of Avnet Technology Solutions. The acquisition will move the company from No. 108 on the Fortune 500 to No. 80. (It was the second-largest company on the Gulf Coast in 2015 terms of annual revenue, behind Publix.)

Dutkowsky shared his tips for success, both personal and in running a business, at a recent event hosted by the University of South Florida's Muma College of Business. Tips and company insights include:

Shift change: Dutkowsky majored in human relations in college, then switched to take a sales job. “I was interviewing for an HR role and sales role at IBM,” Dutkowsky says. “When asked by a sales executive why I liked baseball, I said, 'Because the game doesn't start until I throw the ball.' And he said, 'You're hired.'

“Someone also asked me, 'What do you want to do with your IBM career?' I said, 'I want to be the CEO of IBM.' In the buttoned up fashion of IBM, they reminded me that the last three CEOs had all been sales people.

“It's one of the best decisions I've made because it's where you learn business; where you learn how commerce really happens. When you are in the shadow of the customer, you articulate the value of your product and company or service, that's how you really learn how business happens.”

Sweet Lou: Dutkowsky worked with IBM's legendary CEO Lou Gerstner in his tenure with the company. “I was really lucky to have an opportunity to work with what I would consider one of the top five CEOs who have ever roamed the planet, Lou Gerstner,” Dutkowsky says.

A key lesson Dutkowsky learned from Gerstner: Don't be what you're not, but what you are, and focus on it. “That's the place you spend your time and your energy,” Dutkowsky says. “And around that, that's where you surround yourself with people to fill your weaknesses.”

Look back: Dutkowsky says there are two things he would change looking back at his career. One, he would find more balance. “My family moved 15 times around the world — from Chicago to Japan to Omaha, Nebraska,” he says. “My kids were the new kids in school 15 times.”

And the second regret is decisions he had made about people. “Your gut feeling about people you are going to hire or retain or ask to leave the business is usually correct,” he says. “If I would have listened to my gut, I would have had a better sense of urgency.”

Competitive Advantage: Dutkowsky says Tech Data's most valued weapon is its supply chain and logistics capability, which he calls unparalleled. “If you order from Tech Data by 5 p.m., anywhere in the world we'll have the product to you 99% of the time the next day,” he says. “That's an engine that is our competitive barrier to entry.”

Retention rate: The biggest challenge at Tech Data, and Dutkowsky's primary worry, is the company's ability to attract and retain the right people. “We have almost 10,000 people and we lose 2,000 a year,” he says. “Many of those use Tech Data as a launching pad to go to other steps in their career. Imagine recruiting, hiring and training 2,000 people a year. It's a very process-driven organization.

“Because we're not a tech company, we don't invent anything, the people we need are sales, marketing, finance, accounting, HR, IT. You don't necessarily have to be a tech person to fit in. As an example, our customers need credit and financing to hold product before it sells. Under the covers of Tech Data is actually a bank. At any given time, there are $3 billion in loans in the hands of small businesses. There's a dot we haven't been able to connect with the business community.”

Getting bigger: Dutkowsky says the acquisition of half of Avnet Technology Solutions, a onetime competitor, was a way to jumpstart growth at Tech Data. “Technology spending is only growing 1 to 2%; that's not interesting to shareholders,” he says. “We spent $2.6 billion to acquire Avnet. The day that we announced the transaction, the market cap of Tech Data was $2.5 billion. So if you are a poker player, we went all in.

“We're in this bit of a no-man's land where we've announced the deal but we have to wait for the regulators to approve it. It won't really happen until early next year. So today Avnet is still a competitor of ours.”

New markets: The acquisition, when it closes, gives Tech Data more scale and more size, says Dutkowsky.

It also helps the company gain products in growth categories, like big data and analytics and security. “Avnet specializes in those areas,” he says.

“Like us, they do business in 100 countries. They do business in Asia Pacific. Today, Tech Data does not. So when we acquire, Tech Data will now do business in Asia Pacific, a big leap for us.

“We want to be a distributor from the living room to a data center. That's why when we announced the transaction, the stock went up $20 a share that day. The market realizes the breadth that that encompasses. We're trying to create an Amazon for commercial and retail tech space.”

Brand growth: The Avnet acquisition will also do more for Tech Data's branding, Dutkowsky predicts. “Today on the Fortune 100 list, the companies that are above us and below us are McDonald's and Nike,” he says. “Now we're going to jump up into a rarified air, and I think it will put Tech Data on the map globally, more aggressively from where we are today.

“This will help the Tampa Bay technology brand grow. When this transaction is done, Tech Data will have about $1 billion in profit, and that's money we'll be able to invest in expanding our footprint and attracting more people to Tampa Bay.”

Successful People
In his 40 years of business, Tech Data CEO Bob Dutkowsky has met a number of successful people around the world. From these meetings, he's determined the following traits are necessary for career and life success:

Get focused: Successful people know how to take all the clutter and narrow down to one or two things, Dutkowsky says. “Those are the things they figure out how to start an action, work an action and finish an action,” he says;

Great execution: Successful people get things done. “If you have something that needs to get done, you know who you are going to go to — because there are people who get things done and people who spin their wheels.”

Urgent sense: “If you complete something faster, you have time to work on the next thing,” he says. “It's how you get your flywheels of success running faster and faster. I'm the world's biggest procrastinator, but when the guns ready to go off, that's when I do my best work. I have to have the pressure of time in order to execute.”

Find balance: “The expectations of what you need to bring to the table every day is accelerating,” he says. “You have to find a sense of balance. When the opportunity to go on vacation or go to your kid's Little League game or go to the church event, or stay in the office to do the job, you have to have the discipline to do both. That's not one that I'm great at.”

Related Stories

Advertisement