After building a billion dollar integration business Diversified CEO Fred D'Alessandro is moving aside. Paul Milligan speaks with him about his new role, and to his successor, Eric Hutto.
The news that Fred D’Alessandro (pictured above), the CEO of global systems integration group Diversified was moving to a new role as executive chairman having built the company from the ground up to be one of only a few billion-dollar AV companies came as a surprise.
But, speaking with Inavate, it seems it was something D’Alessandro had been thinking about for several years. “In my whole career I’ve always planned in advance and coming out of the Covid pandemic, this was absolutely the right time to bring on someone of Eric’s calibre and experience to drive this company to even better things than we’ve had to date.”
His successor as CEO will be Eric Hutto (pictured below), he joins from IT company Unisys, where he most recently served as president and COO. Explaining the reasons behind the move D’Alessandro says, “I’ve got a wealth of AV expertise but I need somebody that understands how to operate and grow a $1 billion organisation. I’ve learned as I’ve gone through and now we’re at $1 billion dollars, it’s a completely different set of skills that you need to be able to operate efficiently, satisfy our customers on a global basis, make sure all our employees are being developed and trained and getting what they need to be successful.”
D’Alessandro founded the company 29 years ago, and it is now only second to AVI-SPL globally (according to figures from SCN) in revenue. In recent years it has expanded through M&A activity, and now employs more than 2,000 employees with 50 offices. Its recent expansion has included APAC, with the purchase of Rutledge AV in Australia in 2019, and in EMEA, with the purchase of Digitavia in the UK in 2018.
What will D’Alessandro’s new role as executive chairman entail? It seems as though he won’t yet be disappearing into the horizon wearing a Hawaiian shirt with a Pina Colada in his hand. “I will absolutely help with the transition. I want to make sure our key customers know I’m there for them if they need me. I want to get involved in mentorship to help some of our employees grow, so that when we’re recruiting, we make sure new recruits understand how you’re successful in the AV industry.”
There is going to be change moving forward admits Hutto, “The structure of the company has to be one that we could layer another billion on and layer that billion on without affecting quality, without disturbing our client’s success stories. We’re going to have to evolve the structure. I can see all the markets we serve and we’ll have to really look at that because we’re growing so fast. The beauty of the company is that it’s very successful, but we have to be successful in a high quality experience not in a client experience way, so we’ll have to do some things.”
Unsurprisingly given his IT background, service contracts will be key in the future for Diversified says Hutto. “We want to be more of a managed services/SaaS type of offering, that’s the world I come from. Foundationally you have to have great service management, incident management, all those competencies have to be there to grow a services-based business. I can help fulfil in talent and leadership and thinking around that.”
So what services could they potentially provide? “Our offerings are evolving to bounce up against cloud security, and software defined networks. Just designing a control room without the thought of the cloud and how you secure it in the cloud, you’re going to have to merge that, because clients are going to expect you to have that end to end conversation, not just that you stop at a particular place.”
What does Hutto see as the major challenges for system integrators right now, and can his IT background help Diversified address them in any way? “We’re all dealing with the supply chain. The supply chain is about the ability to get products and get them on time, but it compounds itself when you’re not able to ship and complete an order, then you have lots of inventory sitting in warehouses that normally would just flow right through. It’s about creating a lot of visibility transparency, the ability to realign products to orders to ship in full and get out the door.” To help with this Diversified has brought in someone from IT giant Dell to run its supply chain. “We’re beefing it up and bringing in some new thinking and new
ways that we can look at how to manage it better, so we can get out ahead of it and be able to handle these spikes as they come through,” adds Hutto.
Diversified becoming a global entity is only a recent part of its 29-year history, does Hutto have growth plans for any specific regions? “India is one where we’re stepping up our capabilities. Everybody is starting to sell into India, not just get delivery from India, it’s a booming market. India, the UK and Australia are probably three of the bigger ones we have to get our heads around.” To accommodate these new areas requires some internal shifts admits Hutto, “We’re moving our structure to be more standard, getting us all on the same ERP system, we have a lot of these great growing pains but it will help us scale internationally quicker. We have to be very disciplined in what we choose to be in those markets, because talent is hard to find and to keep, we don’t want to get so broad that you can’t actually go and scale high in something.”
What will Hutto’s philosophy be when establishing non-US offices for Diversified? “We need presence, our design thinking is our value, the ability to creatively solve the problem, that’s our competency. But we may through some of those markets, if it’s in France or Italy, where labour markets are sometimes very difficult, we’re going to partner and we’re going to make sure that we can deliver the work, but we want to own the designers. It’s about what we want to own versus what we’re willing to be variable on.”
I ended by asking Hutto what he thought Covid had done to the AV market. Despite it being a tough time for everyone, the industry can take positives out of the last two years he says. “AV is mission critical for everybody, we’re booking so much business because everybody is trying to figure out what the space looks like for people when they come back. It’s not the office, office won’t be the word, it’s a collaboration space, it’s a place for innovation, it’s an experience. If we do it right people will come back into that environment. If we don’t do it right, you’ll see a lot of people opting out of office jobs, so they can do a job wherever they are. I think it’s driving us forward faster, the more it’s happening for us, the more it’s business for us, because we’re creating the experiences and the conference centres they’re coming to. It’s been good for the business, and I think it’ll make us move faster."