Channel Champion: John Walters, Ingram Micro

John Walters struggles to retain a healthy balance between his working and personal lives like most other people in the IT industry. He loves rugby, collects wine and gets a hit of golf in when he can. But having seen three months active service in the first Gulf war, he can put a bad day in the office into perspective better than most.

Walters spent 17 years in the army and it has clearly had a major impact on the man he is today. He fixes you with a steely-eyed stare if you ask him an uncomfortable question but you can always be sure of an honest answer.

“I was very lucky that I had very strong leadership training at an early age through [the Australian Army] Duntroon. My first boss ever was [General] Peter Cosgrove and even without the benefit of hindsight you knew damn well that this was a special man.

“I served with Infantry Batallions in Australia, as well as the Grenadier Guards overseas, and finished up as a major. The highlight was seeing active service with the Grenadier Guards in the first Gulf war. Seeing bullets flying and the pace of what goes on in armoured warfare makes you reflect on a bad day at the office and think ‘it’s not that bad!’”

Down a new road

After leaving the army in 1994, Walters spent the first few years of civilian life as a state manager and then national operations manager for transport company, TNT. He was completing an MBA at the Australian Graduate School of Management at the time and did an analysis of his career options, which led to the conclusion that transport wasn’t customer-focused enough to make the most of his particular skil set.

“I decided to get into one of the new age industries, which meant either wealth creation in banking and finance or the IT industry,” he said. “I went for a number of jobs but kept coming up against guys that had 10 years’ experience in finance or IT. After a few months of knock-backs, I decided to consult into those industries and one of the first companies I did some work for was LAN Systems.”

Back in 1998, LAN was a small distribution startup run by Scott Frew. Walters helped position the company for growth by introducing performance management systems and improving processes before being invited to join the company as COO. He was employee number nine.

“Scott ran a very good company so all I could do at the time was put his vision into foundation boxes to allow growth,” Walters said. “Nick Verykios came on at about the same time and as far as LAN Systems was concerned the rest is history. We went from $8 million in sales to $100 million and about 100 employees within a couple of years before selling the company to Westcon Group [Datatec] on 19 April 2000 – the night before the NASDAQ crash.”

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Frew left and sold his shares in the company but four remaining directors with minor shareholdings – Walters, Verykios, Andrew Blunden (CFO) and Terry Kelso (national sales manager) – were contracted to stay on for a further two years. Kelso didn’t stay long and Walters picked up her responsibilities in a new role as director of sales and operations.

“It was something I always wanted to do because I was doing a lot of the selling at TNT. That got me out and about among the customers and vendors,” he said. “The US [parent company] left us alone pretty much to start with but over a period of time started to get their fingers in the pie, which was holding up some of our quick decision making.

“It got to the stage where hiring a $40,000 person required approval from New York. At the end of the day it was manageable but that was the major difference between LAN Systems pre- and post-sale.”

A tap on the shoulder

Walters’ earn out period at LAN Systems ended in April 2002. The company was still growing, although at a much slower rate, and he remembers it as a tough time in the industry as everybody struggled to readjust after the tech bubble had burst. He was then tapped on the shoulder by a headhunter looking to fill a position at Tech Pacific. His initial response wasn’t favourable but a couple of meetings that followed eventually changed his mind.

“My initial response was to laugh and I kept saying ‘no’ because Tech Pac was doing it pretty tough at the time because of problems with its warehouse management system, minimum order values and other things that were going on,” Walters recalled. “As a competitor at LAN Systems, especially with regard to Cisco business, we were rubbing our hands together thinking the more they [Tech Pac] made a mess of it, the better off we were.

“Two things pulled me over. The first was a visit to Melbourne where I went to see three or four different customers, including Mark Kalmus at Southern Cross Computer Systems, and he was telling me about this wonderful visit he’d had from the new Tech Pacific managing director, Kerry Baillie. I remember being quite put out because I was there to talk about LAN Systems and all Mark wanted to talk about was one of our competitors. So that made me think.

“About a week later, [Cisco CEO] John Chambers was out and Cisco had an executive briefing lunch where I was sitting on the same table as Kerry. That was the first time we’d met and I liked the style of the guy. The next morning the headhunter rang again and arranged for us to have a chat about the job.”

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Baillie didn’t mince his words in telling Walters that he had a problem and needed help fixing it. Walters was sold and joined Tech Pacific as commercial sales director in May 2002. In order to rebuild confidence with regional resellers that had voted with their wallets and abandoned Tech Pac, Walters and Baillie set out to meet them and listen to their concerns.

“They were exciting times. Kerry’s idea was for the two of us to go out together and find out what was wrong so we could fix it. I’ll never forget how bruised my chest was from the first round of customer visits around Australia in June and July,” Walters said. “Resellers were very harsh in their criticism but they were honest and that was what we required.

“We made practical decisions quickly and delivered on what we said we were going to do.” This included removing minimum order fees and launching its AustraliaWide program to re-engage regional SMB resellers. Six months later, Baillie and Walters went out visiting the same resellers for an update on their progress and were greeted with warm handshakes instead of fingers in the chest. The strategy of empowering staff throughout was clearly working.

A new world order

Over the next couple of years, Tech Pac established itself firmly at the head of the Australian distribution table. Global giant, Ingram Micro, had been in the market for a while now following its purchase of ERA and ITG but had struggled to make the most of its scale across Asia-Pacific. In November 2004, it completed the purchase of Tech Pacific for $700 million and local IT distribution had a new superpower.

“I think the timing [of Baillie’s arrival] was probably bad for Steve Rust and the crew at Ingram,” Walters said. “If Kerry had come in a year later, they would have had a lot more momentum but we had increased our sales by 66 per cent over two years from a big base of $1 billion. That shut Ingram out to a certain extent and they decided the best option was to get the chequebook out. It also gave them a much more strategic play in the huge Asian growth markets.”

Although the newly merged company was flying an Ingram Micro banner, Steve Rust and Matt Sanderson were the only two senior executives that came from that side of the fence.

“The cultural change wasn’t very significant because it was mostly the old Tech Pac senior management team, we stayed in the same premises, we kept Adonis [Tech Pac’s ERP system] and we kept Tech-Link [Tech Pac’s website],” Walters said. “We tried to limit the impact on our customers and vendors but banging two big companies together that had been competing led to some interesting times in the next few months as people jostled for position.”

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When the dust settled, the managing directors of both companies left on the same day in May 2005 after a brief spell with Baillie in charge and Rust running operations. Former Tech Pac Asia-Pacific CFO, Guy Freeland, was announced as the new Ingram Micro Australia boss, with Walters as commercial sales director.

The importance of people

But it wasn’t long before he was given the new challenge of heading up its new Solutions Group as Ingram looked to dabble in the value market. After a couple of years driving that business, responsibility was handed over to Stuart Ellis and the retail division has been aded to Walters’ portfolio in recent months. But no matter which area of the market he is focused on, Walters said people are people and your value proposition remains the most important thing to remember.

“The channel is very fluid and there’s a lot of ebb and flow. If you’ve got the ability to get on with people and relate to them then you have better sustainability,” he said. “Those who don’t understand those people relationship skills tend to be too hard at times, but we are all in business for a long time and the channel doesn’t forget so you need to maintain relationships and have integrity.

“It’s crucial to stick to your personal behaviours commensurate to the environment you’re operating in. If you can look people in the face and say ‘you might not like it but this is what I believe in’ then that’s fine as long as you express it professionally.”

Walters, who has only been in the IT industry for a decade, was visibly shocked when he was inducted into the Hall of Fame at the recent ARN IT industry Awards. He had polled more votes than anybody among the reseller community and paid tribute to the people he has worked with over the years.

“The only reason I’ve been able to win an award like that is because of the teams I’ve had around me at LAN Systems, Tech Pac and Ingram who have made me look good!” he said. Standing up there and looking around at some of the people in the room was pretty humbling really.”