By Mark Davison – In days gone by, Tim Humphreys-Davies may have been eligible for a long-service award such as a gold watch for 20 years’ service at one of the country’s biggest distributors, Pinnacle.
Some would say, however, that a gold medal might be more appropriate having not only survived the hugely competitive, cutthroat world that has been IT distribution over the past two decades, but also leading Pinnacle to the greatest heights in its history.
Not only did the company achieve more than a record R6-billion in annual revenues in its last financial year, last month it also scooped the coveted Channelwise Distributor of the Year award for 2021, beating out fierce rivals such as Axiz, Tarsus and First Distibution.
Humphreys-Davies started his career in distribution at North Coast trading back in 1993 and through the heady days of the 1990s served in executive positions at companies such as Kingston Technologies, Multi Media Warehouse (MMW) and Memtech, which was part of Siltek Distribution Dynamics (SDD), then South Africa’s largest distribution group.
But it is at Pinnacle where he’s made his mark over the past 20 years, earning the respect of both colleagues and competitors alike.
He takes up the story of how he joined Pinnacle: “I left SDD and Memtech in September of 2001, just before it crashed that November. I’d heard that an old friend and colleague, Craig Novitz, was getting involved in a project with Arnold and Louis Fourie, so I got in touch with him.
“Between us, we agreed that Craig and I would take over the Pinnacle branch in Cape Town and start a new company as shareholders,” he continues. “From 2002 to 2005, we ran Pinnacle Cape Town as a separate entity and increased that business 10-fold within six months.
“That had Arnold and Louis interested,” he adds.
Around the same time period, the Pinnacle group had started along the acquisition trail, picking up specialist software distributor WorkGroup from the remnants of SDD and later acquiring volume distributor Axiz from Anthony Fitzhenry, as well as pan-African distributor Tri-Continental.
“As more and more acquisitions came on board, Arnold (Fourie) moved more into a group CEO role, with Craig and myself being appointed executive directors, attending board meetings and the like, and it all worked very well,” Humphreys-Davies says. “I ran marketing at the time and enjoyed it immensely, organising some major incentives such as one around the 2007 Rugby World Cup … some great experiences and memories.”
He adds that the company philosophy also started to change.
“We became much more channel focused and involved in customer support,” he explains. “Arnold Fourie was very supportive during this period and I’ve got to say that I learnt a lot from him. He was almost like a father-figure to me during that time.”
Humphreys-Davies explains that, historically, Pinnacle had very much relied on its own in-house, locally-assembled Proline product range to drive its desktop market, but that this changed with acquisitions such as Tri-Continental.
“The Tri-Continental acquisition was really our introduction to Tier 1 product lines,” he says. “We picked up vendors like Dell and HP and slowly expanded to become more broad-based, shaping towards the collective offerings we have now.
“But Proline was always the anchor tenant,” he’s quick to add.
While Humphreys-Davies served as MD and head of marketing for Pinnacle from 2010 to 2014 and then joint-MD with Louis Fourie in 2015, Arnold Fourie was putting a succession plan in place with the recruitment of channel “heavyweights” like Henry Ferreira and Pierre Spies. Ferreira took over Louis Fourie’s role at the company while Arnold commenced a hand-over of his group position to Spies.
“As part of his succession plan, Arnold had ear-marked me to take over Pinnacle from Henry Ferreira, who was close to retirement,” he says. “That happened in November 2015, with 2016 being my first year as CEO of the company.”
And he hit the ground running within months of his new appointment as Pinnacle underwent a massive cultural shift in the way it conducted both itself as a company, and in its business dealings with customers.
“In 2016, around July, we had a re-branding exercise aimed specifically at: What was our differentiator?” Humphreys-Davies says. “We brought in some pretty smart consultants and, together with our team, we came up with: ‘Delivering the exceptional’ – a culture of discretionary effort. Pinnacle was a tough place to work, very much a sink or swim culture. Now, we were building a more collaborative and inclusive culture around our own value – ‘Delivering the exceptional’. Value and respect for our customers, for our stakeholders. A shift to being more customer-centric, being more channel-centric, and having more collaboration with our vendors.”
Strong company culture is a key ingredient for any organisation in the IT industry, particularly the channel, and can often become the central issue – or obstacle – when it comes to mergers. Many have questioned, for example, why Mustek and Rectron – part of the same group – have never merged. The same question is often raised about Pinnacle and Axiz. And now, more recently following its acquisition by Alviva, Tarsus. The simple answer is: different corporate cultures.
As Humphreys-Davies explains: “When Pierre Spies was settled at Axiz, Arnold Fourie, and the board, seriously looked at merging Axiz and Pinnacle. But the company cultures were just too dissimilar. It wouldn’t have been a comfortable fit for either company.
“And, over the years since, we’ve evolved to become respected competitors,” he says. “We compete against each other. We have different go-to-market strategies in terms of product sets. We have 3 000 to 4 000 active customers per month, Axiz has a lot less. Looking at different product sets, for example, they have Cisco – we have Huawei. A big chunk of Axiz’s revenue is software, that’s very much smaller for Pinnacle.
“We’re strong in retail and e-tail, they’re more focused on the enterprise,” he says. “We are competitors with them – probably their No.1 competitors – and we respect each other as competitors. We address different segments of the market. The same goes for Tarsus … for Mustek … we’ve all carved out our own particular niches. It’s not by design. We all enjoy competing with each other and we talk on a regular basis about issues affecting the channel – I think that’s the spirit of the industry.
“But we have a lot of respect for all our competitors,” he adds.
And that respect is no doubt mutual as Pinnacle has gone from strength to strength under the guidance of Humphreys-Davies.
Quizzed on some of the highlights of his career, it is clear that the path he chose to lead the company down in 2015 was a turning point for both him and the company.
“I think the change in culture at that time definitely impacted on where we are now,” he says. “In 2015, Pierre Spies gave us the challenge of converting 30% of our business to the enterprise market. We achieved that in the first quarter of this year. Then there was the reaction of the staff … the motivation and loyalty that’s been displayed. I think we now have one of the best staff retention records in the industry. Our standing with our vendors – I think that speaks for itself – especially when you look at the figures where we’ve experienced revenue growth in 2015 of R4-billion, to over R6-billion today.
“There are many, many highlights, but those are just a few that immediately spring to mind,” he says.
And the future? Humphreys-Davies, as always, is forthright on the subject.
“Pinnacle needs to become more relevant in software and the cloud,” he’s quick to answer. “Like the rest of the industry and business, distribution has to move more towards digital transformation and we have to drive the platforms that we have to offer. A lot of resellers are travelling the same route and we need to have more collaboration between vendors, distributors, resellers and end user customers on this road to digital transformation.
“There is a lot of growth potential in the enterprise space,” he adds. “Both pre-and post-sales. We need to be able to address that.”
And he has no doubt that he, and his team, will rise to the challenge.
“I’m very, very blessed to work with such quality people,” Humphreys-Davies says. “The team we have, and the executive team we have, are the reason we are doing so well.
“There is so much more collaboration than there used to be,” he adds. “It’s not about one person being the leader … it’s a team effort … and it works it’s way from the top all the way through the company.”