Is Ingram Overhauling Itself for the Right Reasons?

By Elliot Markowitz  |  Posted 2005-05-27 Email Print this article Print
 
 
 
 
 
 
 

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Ingram Micro is changing almost everything about itself except the need to maintain good relationships with its customers. Of the many unclear things about Ingram's future, that is the most troubling.

Operation "Clean Sweep" at distribution behemoth Ingram Micro appears to be well under way.

That's my description of what is going on inside the company and not theirs, although it may as well be. In less than two months, Ingram has announced that its CEO is stepping down from his day-to-day duties, that it is laying off 550 employees and outsourcing a slew of functions to an offshore company, and that is it reorganizing and consolidating its Canadian and U.S. executive teams into one management structure.

Any one of these is a major shift that comes with a variety of pain points. But put them all together and you've got more confusion than a bunch of channel executives trying to find their way from Copley Square to the financial district in Boston during the recent SAP Sapphire through unbelievable amounts of construction. (This is a recent example of a situation that I dare not get into right now in order to protect the guilty.)

There is change and then there is change. It's a funny thing this concept of change. It can be downright necessary or it can be downright confusing. I once had an editor tell me he was doing away with all printed corrections of our galleys because he wanted to force us to rely solely on on-screen editing.

This was back in my print days, but even then I was a firm believer that you have to edit and proof content in the medium in which it will be ultimately presented. Considering I was working on a print publication at the time, seeing the way copy flowed around art and how the headlines worked was critical.

Now mind you, our deadlines were being met, the paper was getting out the door to the printer on time, and we never missed a mailing. However, this sledgehammer management style was solely to make change happen for the sake of change regardless of what the outcome would be. It didn't make sense and it didn't work. To my knowledge that same publication still goes through a variety of internal printouts before the pages are officially signed and approved for printing. However, during that short exercise in futility, morale and productivity suffered.

Will outsourcing degrade Ingram's customer service? Click here to read more.

Morale and productivity always suffer, at first, when a radically different approach to business is implemented. This ultimately trickles its way down to customer service and relationships.

Now, I can't tell you what the folks over at Ingram are thinking. In fact, it is hard for me to tell you who is actually making some of these business-altering decisions.

What I do know is that Kent Foster is still going to be chairman after he officially passes over the CEO reins to Gregory Spierkel. I know Kevin Murai is now going take on the added title of COO and is still considered to be the driving force and most visible executive behind the company's progress.

I do know many in the channel community and even inside Ingram were a bit surprised Murai didn't get the CEO job. I do know Martha Ingram and John Ingram are still voices on the distributor's board. But what I can't tell you is how all of these smart folks decided to go through with all of these changes and whose neck is on the line if any one of them doesn't work.

To be fair, each one of Ingram's moves has plenty of merit. But taken as a whole, they are overwhelming. And the latest move involves more people out the door. People who had relationships.

A recipe for disaster?


The channel is getting confused and concerned. In 10 years, they've seen the torch at Ingram get passed from Chip Lacy to Jerre Stead to Kent Foster and now to Spierkel. At the same time, Steve Raymund has been the Rock of Gibraltar at Tech Data. He has been with the company since 1981 and CEO for nearly 20 years. All these different Ingram executives brought a different way of doing things to the table and a different way of dealing with channel customers.

Lacy ate and slept distribution. He knew the business better than anyone and knew the company's reseller base extremely well. He was often seen giving advice to other distribution executives at industry events. Many inside and outside the company were sad to see him step down in 1996, apparently after a disagreement with Ingram's board of directors on how to distribute stock fairly to loyal employees, sources at the time said.

In came Jerre Stead, the turnaround specialist. He was a name to take Ingram public. He never really gained the trust of Ingram's reseller customers and was better known for his micromanaging than for his innovation and channel acumen. He did know how to cut costs though.

In 2000, it was Foster's turn to take over, and in the five years he has been there he has quietly kept the organization competitive and an industry leader during perhaps the roughest times for this segment of the industry. Not a limelight seeker, but more of a listener and a doer, Foster's Ingram was run vastly different from Stead's, and the days of walking on eggshells were gone. But just five years into his run, he is turning the helm over to Spierkel.

Spierkel's leadership alone will bring change to Ingram. Now add the layoffs, massive outsourcing deal and now reorg of executive management, and Ingram is behaving more like a company on the ropes than an industry leader. This is not instilling confidence in the reseller ranks.

The channel business is still a people business, and management shakeups, turnover and reorgs take their toll. And no matter how high up the service food chain a VAR may be, it's still a relationship business.

Last I checked it is hard to have a meaningful relationship with a revolving door.

Elliot Markowitz is Editor-at-Large for The Channel Insider. He is also Editorial Director of Ziff Davis eSeminars. He can be reached at elliot_markowitz@ziffdavis.com.

 
 
 
 
Elliot Markowitz Elliot Markowitz is Editorial Director of Ziff Davis Media eSeminars responsible for the editorial content of all eSeminars. Markowitz is a 14-year publishing veteran and was previously Editor-in-Chief of CRM Magazine and the destinationCRM.com website and related live events. Before CRM Magazine, he was Business Editor at TechTV, responsible for helping to manage the TV station's website as well as conducting live on-air interviews with key industry executives.

Markowitz also spent 11 years with CMP Media's award-winning weekly newspaper Computer Reseller News (CRN), where he held many key editorial positions including News Editor, Business Editor, and Senior Executive Editor. In 1999 he was named Editor of CRN, responsible for the entire editorial operation of the newspaper and in charge of coordinating its redesign and re-launch in June 2000. While at CRN, Markowitz initiated many key alliances including the Industry Hall of Fame event in Las Vegas and the annual CRN/Raymond James Conference. Early in his career Markowitz was a news reporter on Long Island for the Massapequa Post.

He holds a B.A. in journalism from Hofstra University and is a graduate of the Stanford Professional Publishing Course.
 
 
 
 
 
























 
 
 
 
 
 

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