Denali CEO Majdi Daher: Family Business Looks Outside For Future Growth
‘Today, a lot of our nephews and nieces are scattered all over the company. ... But the only reason they’re in this company is because they’re truly the most qualified for their positions. There is no nepotism. So for leading the organization, the most qualified person doesn’t have to have the Daher family name,’ says Majdi Daher, former CEO of Denali Advanced Integration.
Shaking Up The Family Business For The Future
Denali Advanced Integration has entered a new phase in its growth as the company, which is still owned by the three brothers who started it 30 years ago, brings in someone from outside the family to serve as CEO.
Denali last week unveiled Robert Vrij as its new CEO. Vrij, who previously served as CEO of Openwave Systems and Alcatel-Lucent USA, and was a senior vice president and managing director for Hewlett Packard Enterprise until 2016, actually joined the Redmond, Wash.-based solution provider as a senior adviser and has been active in the company’s decisions on investments and other areas.
The change at the top came as Majdi Daher, who had served as CEO since Denali’s founding, decided along with his brothers Mohamad and Mitch to form the company’s first formal board of directors as a way to work with Denali’s CEO regardless of his or her family name.
Majdi Daher, in an exclusive meeting with CRN, said he and his brothers discussed the move for a long time, looking for a way to keep the company, ranked No. 37 on CRN’s 2022 Solution Provider 500, growing while mentoring their nephews and nieces for increased responsibility.
And, Daher said, it was important for him to get out of the way of that growth, which is something founders of any company need to consider.
“There comes a time where the company becomes bigger than what you know and you start getting in the way if you decide to stay in charge,” he said. “So I made the decision. And it’s the right thing at the right time. Because if I realize that I am not the right person to take this company to where it needs to get to, it’ll be too late.”
The most qualified person to lead Denali doesn’t have to have the Daher family name, Daher said.
“The most qualified person will remain the CEO of the company,” he said. “It doesn’t matter what the family name is. However, the intention is to leave the company in the family. Today, a lot of our nephews and nieces are scattered all over the company. And they do a lot of different roles. But the only reason they’re in this company is because they’re truly the most qualified for their positions. There is no nepotism.”
The Daher brothers have over the past 30 years built a $1.5 billion solution provider and are looking to ensure that the company’s future remains in good hands. Following is more about the decision to bring in a CEO from outside the company and the solution provider’s plans going forward.
Why the change of leadership for a company that’s been run by the same family for since it started?
We’re privately held and we’ve been very proud of that for the last 30 years. We’re building a business that is multigenerational. But I started thinking in early 2019 about what’s the right succession plan for our organization going forward. And I started that search process that because, you think about it, this is the biggest job I’ve ever had in my life. Everything I know, I pretty much learned on the job. And in 2021, the tremendous growth that we went through really validated that somebody else with the right experience, the right approach to building a sustainable business, the ability to make the right investments and work to grow the business with the right background, is more appropriate to continue this legacy.
So I did what I think a lot of founders should consider. There comes a time where the company becomes bigger than what you know and you start getting in the way if you decide to stay in charge. So I made the decision. And it’s the right thing at the right time. Because if I realize that I am not the right person to take this company to where it needs to get to, it’ll be too late. And that’s one of the things about our organization: We’re very deliberate in everything we do. We plan way far in advance. And we always do what’s best for the business. You’ve got to remember, we own the business. So it’s not like I need another title or to beef up my resume. It’s not about that. We needed to make sure that we bring the right person to continue and build on the foundation that we have. Most likely, it’ll amplify and accelerate where we can get to.
I had this conversation with my brothers. I can tell you, my brothers were kind of surprised. We had multiple conversations about this. It took some convincing, because it’s easy to settle or just go with the status quo. But that’s not what we are as a company. We’re always challenging ourselves. We’re always trying to aspire to be better than what we are.
I’ve known Robert for quite a while, almost 10 years, when he was running HPE Americas. We had a great partnership. I reached out to Robert over a year ago and started talking to him about the role. And Robert has been with us now for nine months. He came in as a senior adviser to me really to learn the business, to see what our tempo is. And he was instrumental in making a lot of the decisions that we made over the last six months, some of the investments we’re making. He was behind the scenes. And now we’re saying, ‘OK, it’s the time for him to be the CEO to lead this organization and really help mentor the next generation so when they’re ready to take over the company, it’ll be there for them to move to that next challenge.
When Robert came in last year originally, was he coming in with the expectation that he would eventually take over as CEO?
Yes, I think we both had an agreement. It was a two-way street. Robert needed to agree to take the job as well. He needed to look under the covers to make sure it’s what he wants to do.
The Daher family still owns 100 percent of Denali. Is that going to remain the case going forward?
Yes, we three brothers will still own 100 percent of this business. We have other businesses. But we continue to build Denali. We build it every day, this multigenerational private company that is focused on our customer-first strategy. That’s the alignment that we talked about with Robert. So there needs to be that fit. Can somebody like Robert come in and execute on that vision while making sure that we live to our value and our culture?
When you say ‘multigenerational’ company, do you expect the children of you and your brothers to be active in the company? Or are they off doing their own thing?
As you can see from this decision, the most qualified person will remain the CEO of the company. It doesn’t matter what the family name is. However, the intention is to leave the company in the family. Today, a lot of our nephews and nieces are scattered all over the company. And they do a lot of different roles. But the only reason they’re in this company is because they’re truly the most qualified for their positions. There is no nepotism. So for leading the organization, the most qualified person doesn’t have to have the Daher family name.
So Majdi, as you step away from the day-to-day role of running Denali, what are you going to do?
Think about it. This is the only thing I’ve done for the last 30 years or so. Obviously, I have a tremendous passion for technology. As I’ve said before, I believe technology saves lives. And if you look at what happened in the COVID era, that truly come true. Our vision is changing the world leveraging technology. It’s an aspirational vision. But some of it was actually realized in the last few years. The companies that we enable, that we partnered with, truly saved humanity, if you think about it. Whether it’s transportation, e-commerce, food delivery, health care, we participated in that. And I have a tremendous passion for it. However, I am stepping up from my position, I’m not stepping out. And now I’m going to be truly on a board role, where I’m going to be advising and supporting Robert as he takes this company to the next level. I’m a connector, and more than anything else that I see great talent, great people, who have an eye for the next thing. In the last 30 years, we’ve made some bad investments. Not everything was 100 percent. But the good decisions outweigh the bad decisions that we made. I’m also going to do quite a few speaking engagements. I’ve always helped and advised young companies and young entrepreneurs who want to learn. And I do quite a bit of volunteering. I sit on a Healthcare Foundation Board. That’s extremely important, actually working to try to figure out how we transform high-school education by bringing technology into that into that realm. So I’m going to be very busy with this. And I’m going to continue to leverage my experiences and my passion to really change the world.
Denali is also talking about formalizing a board of directors. Did Denali have a formal board of directors prior to this? Or is this new?
We actually did not have a formal board. We had a board because you have to file corporate minutes and stuff like that. Alex [Daher] was the only board member because he was the chairman. We had an informal board because the three brothers would get together and we would make decisions collectively for the future of the business. Moving forward, we’re going to start operating in the capacity as a formal board of directors, because that’s what‘s required for a CEO to be successful. So having formal quarterly meetings, setting objectives and goals, holding the CEO accountable, making sure the CEO is participating in the actual execution, delivering the strategy, everything a large enterprise should do. And that’s something maybe people sometimes get confused about a family business, thinking it’s a mom-and-pop. But to me, that’s why they’re not sustainable. They often become a hobby, not a business. And one of the many things that was attractive about Robert is he has the flexibility to understand what private business is. However, he operated in large organizations where he had operational discipline, excellence in execution, have to meet an objective set of goals. We’re not somebody who’s pushing for an order or a profit. However, there has to be a measure and accountability for that. So those are some of the little pivots that are going to move forward for the organization. Because we have to build something sustainable. Think about it: The Walton family started Walmart, but they’re not really running it. But Walmart still pays the Walton family. So our aspiration is to build something like that.
Will this formal board have outside members? Will you bring in people from outside the family?
Each of us brothers is different. Behind the scenes, you would never know we’re brothers. We’re very different. Our perspective is different. Our thinking is very different. We all want the same thing. But we differ in ‘how.’ We agree on the ‘what.’ It’s the ‘how’ that is different. And that’s why the brothers collectively agreed that I shouldn‘t be the CEO because I’m out there thinking and all these things. Alex, our chairman, is financially very savvy, very operationally focused. Mitch is the creative guy, with an amazing creative mind. So the combination of us three brings a unique perspective to this. Nobody came to me and said, ‘Hey, maybe you know, you’re getting in the way of the business, you need do something else.’ So we’re always opportunistic, and we will always do what’s best for our customers, which translates into what’s best for our business.