BUSINESSWEEK ONLINE : OCTOBER 23, 2000 ISSUE
INDUSTRIAL MANAGEMENT Flextronics: Few Rules, Fast Responses Ask Michael E. Marks about his company's procedures for making a big capital investment, and he is likely to refer you to the Flextronics International (FLEX) Corporate Policy Manual. It has 80 pages--all of them blank. Although Marks is Flextronics' chairman and CEO, he says he sometimes lets subordinates such as Humphrey W. Porter, the head of Flextronics' European operations, do multimillion-dollar acquisitions without showing him the paperwork. He disdains staff meetings at his San Jose (Calif.) headquarters, and he refuses to draw up an organization chart delineating his managers' responsibilities. One might think Marks's style is too casual for a fast-growing conglomerate. This is a giant that owns dozens of factories scattered over four continents and has big contracts with some of the most demanding corporate customers on earth, from Cisco Systems Inc. (CSCO) to Siemens (SMAWY). What's more, Flextronics seems to be announcing a breakthrough deal a month. This year alone, the company has spent $5.5 billion to acquire electronics manufacturing plants, design firms, and component makers in the U.S., Europe, and Asia. It also has landed huge manufacturing contracts with Motorola Inc. (MOT) and Microsoft Corp. (MSFT) As Marks sees it, the business of global contract manufacturing is all about speed. The time it takes to get a prototype into mass production and onto retail shelves across the globe can determine whether a leading-edge digital gadget succeeds or flops. And with the Internet and corporate makeovers rapidly reconfiguring entire industries, Marks thinks it's a bigger sin to miss important opportunities than to make a mistake or two. So he doesn't want to tie down his top managers with bureaucracy. One of Marks's favorite dictums: ''It's not the big who eat the small. It's the fast who eat the slow.'' So far, Marks has managed to craft the right balance. A Harvard MBA who had run several small electronics makers, Marks helped engineer a takeover of Singapore-domiciled Flextronics in 1993, when it was nearly bankrupt. After turning the company around, he began to rebuild. Flextronics became a favored supplier to companies like Cisco, 3Com (COMS), and Palm (PALM). Marks then parlayed Flextronics' zooming stock price into aggressive acquisitions. In seven years, sales have soared from $93 million towards $10.5 billion this year. Its stock, meanwhile, has soared from under $10 in 1998 to the mid-70s currently. This year, Flextronics is poised to become the world's second-largest contract manufacturer, after Milpitas (Calif.)-based Solectron Corp. (SLR) Besides the industrial parks in Hungary, it also has huge manufacturing campuses in Mexico, China, and Brazil. The basketball hoop hanging in Marks's modest, somewhat disheveled office seems to sum up his self-image. Marks is a passionate player--even though he stands all of 5 ft. 2 in. Likewise, in the business world, Marks seems determined to prove a point. One way or another, he's convinced he can retain the agile management style of a startup, while making Flextronics a global enterprise that can play in the big leagues. By Pete Engardio in San Jose _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Taking Hungary on a High-Tech Ride MAP: Hungary Flextronics: Few Rules, Fast Responses INTERACT E-Mail to Business Week Online

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