Chief executive officer, Flextronics International
Born: December 31, 1950.
Education: Oberlin College, BA, MA, 1973; Harvard University, MBA, ca. 1976.
Family: Married Carole (maiden name unknown); children: two.
Career: Flextronics, 1989–1990, plant manager; Metcal, ca. 1990–ca. 1993, president and chief executive officer; Flextronics International, 1993–1994, chairman; 1994–2003, chairman and chief executive officer; 2003–, chief executive officer.
Awards: Named one of the Heroes of U.S. Manufacturing, Fortune , 2000; CEO of the Year, Electronic Business , 2003.
Address: Flextronics International, 2090 Fortune Drive, San Jose, California 95131; http://www.flextronics.com.
■ Michael E. Marks became chief executive officer of Flextronics International, an electronics-manufacturing-services company, in 1994. With Marks at the helm, a nearly bankrupt Flextronics that was ranked 22nd in the industry grew over 10 years to become an industry leader with over $14 billion in revenues a year. Marks was highly regarded by his colleagues, employees, and customers, who described him as an enthusiastic visionary who had successfully navigated the company through challenging times in the industry.
Marks was raised in St. Louis and had an early introduction to business leadership: his father owned and ran an air-conditioner distributorship. Working alongside his father and brothers, Marks was taught to appreciate customer relationships and to value innovation. He told Electronic Business , "My
father was a very ethical man, very sensitive to his employees" (December 1, 2003). Marks went on to earn both bachelor's and master's degrees in psychology from Oberlin College in Ohio. He spent a year with the Cleveland police department formulating an entrance exam before heading to Harvard Business School to earn a master's in business administration. At the time, Marks's interests differed from those of most of his classmates; his intent was to run a small business rather than a large corporation.
After graduation Marks began working for a coal company that would later fold. The experience helped to shape his attitude toward corporate structure: "It was the most dysfunctional place I ever worked, with lots of channels and fiefdoms" ( Electronic Business , December 1, 2003). Marks returned to St. Louis in the early 1980s to be near his father, who was gravely ill, and to run a $10-million-a-year computer company. His father died in 1981, but his interest in the industry was piqued. The computer job was "a humbling experience" in Marks's words, and he aspired to learn more ( Electronic Buyers' News , December 20, 1999). With his wife and two children in tow, Marks relocated to the geographical center of the U.S. electronics sector, Silicon Valley in California.
Marks began working for Flextronics in the late 1980s, first as a consultant and then as manager of a California plant. He later admitted that he was not entirely prepared for the position: "I didn't really know much about world-class manufacturing." At least one customer agreed, suggesting that Marks read Richard Schonberger's 1986 book World Class Manufacturing: The Lessons of Simplicity Applied . The book was "a real eye-opener" for Marks, who had barely passed the one manufacturing class he had taken while a student at Harvard ( Institutional Investor , March 15, 2004). He was drawn in particular to Schonberger's description of how to streamline manufacturing processes and the importance of focusing on the customer.
In 1990 Marks left Flextronics and became president and chief executive officer of Metcal, a maker of precision systems for electronics manufacturing. Flextronics was in the midst of a financial upheaval: its Asian plants were sold off in 1990 and its U.S. operations had collapsed. Marks had left a favorable impression on the executives of the Asian spin-off, Flextronics International, and was asked to join the board of directors in 1991. Despite the challenges facing the company, Marks saw potential in the company and in the burgeoning outsourcing trend. He left his job at Metcal and convinced several venture-capital firms to fund a takeover of the company to the tune of $15 million. Marks became chairman of the Flextronics board in 1993 and was appointed chief executive officer in January 1994.
Marks had his work cut out for him. The company was rated only 28th among contract-manufacturing (CM) companies and made less than $100 million a year in revenue. Marks had an idea for making the company more efficient and cost-effective: vertical integration, or controlling multiple stages of the manufacturing process, from production to warehousing to shipping. Vertical integration had been used prominently by the automotive manufacturer Henry Ford in the 1920s, but at the time no other contract manufacturer was applying the concept. Marks's plan for Flextronics was to open plants in low-cost locations such as Asia and Eastern Europe and to create industrial parks that would bring suppliers to where the products were being manufactured. Marks also felt that a strategy called demand-flow manufacturing, in which products are made only as orders come in to avoid a backlog of inventory, would allow for even greater cost and efficiency savings.
Marks's strategies paid off. Louis Miscioscia, an analyst for Lehman Brothers, said that Flextronics was "the first and so far only CM to move to these megacampuses, a low-cost strategy that no one else has replicated…. [Marks] is considered by many in the supply chain industry to be more visionary than the other guys" ( Electronic Business , December 1, 2003). Within Marks's first year at the helm of Flextronics, the company was listed on NASDAQ, the venture-capital firms were paid off, and two acquisitions were completed to add to the company's capabilities.
Over the next six years Flextronics underwent a period of rapid growth, coinciding with a boom in the electronics-manufacturing industry. While other electronics-manufacturing-services (EMS) companies were growing at an average rate of 20 percent per year, Flextronics was growing at 60 percent. By 2000 sales had reached $10.5 billion, and the company's customers included Cisco, Nokia, Hewlett-Packard, Motorola, and Ericsson. Marks had taken Flextronics from the 22nd- to the 4th-rated EMS provider worldwide, with the goal of taking over the number-one spot by 2001. In 2000 Marks was named by Fortune magazine as one of six "Heroes of U.S. Manufacturing."
In the early 2000s the technology sector suffered a downturn, and the electronics-manufacturing market crashed. Flextronics, however, went on to claim the title of industry leader in December 2001, surpassing Solectron Corporation. Revenues for fiscal year 2004 were posted at $14.5 billion. Marks reacted quickly in the face of declining trends by employing broad cost-cutting measures, including closing 40 plants and laying off thousands of employees. As of 2004 the company still employed nearly 100,000 employees at approximately one hundred plants. Vertical integration through Flextronics's global industrial parks also helped to offset losses.
Colleagues and analysts credited Marks's vision and innovation for helping the company weather the storm. Bob Mc-Namara, managing director at Broadview International, an investment bank, said of Marks: "To call him a visionary is not an overstatement. He's always been one step ahead of the trends in the industry" ( Electronic Business , December 1, 2003). Analyst Chris Whitemore agreed: "Marks is usually two or three years ahead of everyone else in the field" ( Chief Executive , July 2004).
Marks's disdain for bureaucracy and red tape helped create a nonconventional corporate structure at Flextronics's head-qu1rters. He avoided meetings whenever possible and purposely kept the layers of management to a minimum. By his own admission he was not a micromanager and gave his executives financial and creative latitude to make major decisions. "I've surrounded myself with people who are bright and enthusiastic and don't want a lot of direction. We grew at 60 percent a year for six or seven years. If you don't have this kind of organization, you can't grow like that…. I set expectations and judge people by results. By definition, if you give people a lot of rope, some will hang themselves. So I occasionally fire people" ( Electronic Business , December 1, 2003).
His leadership style garnered much respect from his employees. Flextronics's chief operating officer, Mike McNamara, told Electronic Business , "Marks lets you run your own business as long as you produce results. He doesn't believe in complex structures, reports or endless reviews. He allows us to innovate." Humphrey Porter, president of Flextronics Europe, added, "Marks is one of these guys who is enormously collaborative. He's completely at home with the janitor or the CEO. He makes whoever he is working with a part of the team" (December 1, 2003).
Colleagues and customers described Marks as enthusiastic, energetic, curious, and observant. Analyst Miscioscia said, "He's charismatic, and he's always bullish on something. But he's usually on the money." Ursula Burns, a senior vice president with Xerox, one of Flextronics's customers, called Marks "funny and personable. He talks fast, moves a lot and is hyper. He doesn't know it, but we call him the Energizer bunny" ( Electronics Business , December 1, 2003).
In 2003 Marks stepped down as chairman of the Flextronics board, recommending that another board member, Richard Sharp, take the lead role. He maintained that the transition was in the best interests of shareholders and was not foreshadowing imminent retirement. A 53-year-old Marks told Chief Executive in July 2004: "The transition will be when I'm in my sixties." He looked forward to spending his free time with his family and indulging in his hobbies, which included basketball, skiing, bicycling, and playing piano.
See also entry on Flextronics International Ltd. in International Directory of Company Histories .
Bylinksy, Gene, "Heroes of U.S. Manufacturing: Michael Marks," Fortune , March 20, 2000, p. 192.
Doebele, Justin, "Flex Forward: Flextronics' Michael Marks Says that Outsourcing Can Only Get Much, Much Bigger," Chief Executive , July 2004.
"Michael Marks of Flextronics International," Institutional Investor International Edition , March 15, 2004, pp. 12–14.
Roberts, Bill, "Michael Gets High Marks," Electronic Business , December 1, 2003.
Sheerin, Matthew, "Michael E. Marks, Flextronics: Transformed Struggling Company into a Top-tier Global Contractor," Electronic Buyers' News , December 20, 1999, p. 64.
——, "One on One: Why Flextronics' CEO Sleeps Well at Night," Electronic Buyers' News , August 30, 1999, p. 1.
—Stephanie Dionne Sherk