Memorize Your Mantra
Jeff Rea jokes that by the time he joined Stock Building Supply in November 2010, what once was America’s biggest pro dealer had shriveled so much that wags renamed it “Out of Stock.” Revenues had plummeted from $3.19 billion in 2008 to $861 million in 2010, and a Chapter 11-bankruptcy reorganization had seen the company divest branches even more feverishly than it had acquired companies over the previous several years.
“We turned the organization upside down,” says Rea. “That energized our team. … [As a leader], you have to be out in front of your people and the discussion has to be not on performance. It’s got to be: Who are we and what’s our opportunity?”
Early on, Rea gave his team “TIPPSS.” The acronym—which stands for Teamwork, Integrity, People, Performance, and Service and Solutions to customers—functions like a strategic checklist for employees to align their career goals with corporate objectives. “It starts with our teams and ends with our customers,” he says. “Those are our core values.”
Focus on Core Values
Lots of consultants talk about corporate culture. ABC Supply CEO David Luck thinks they’re missing the point, and he uses ABC’s $1.6 billion acquisition of Bradco Supply in 2010 as proof. One might think that mixing a 129-location New Jersey-based operation with a business based in Wisconsin would be a recipe for trouble. But Luck saw the situation differently.
“They say the No. 1 killer of an acquisition or integration is incompatible cultures,” Luck says. “I looked at my own company and saw I [already] had multiple cultures, geographic cultures, it was all over the board. And if you understand culture, every time you add people, that new body of people will change your culture.”
Rather than evaluate Bradco as a cultural match, Luck says, ABC compared core values, “the 100-year things that don’t change. Lining up parts of the company, we found that they resonated unbelievably. That’s what we shared: our philosophy of running the business and the power to manage.”
To what result? Luck says the partnership has created more than $2 billion in equity, allowing ABC to pay off the investment group that financed the Bradco deal three years early.
The company’s momentum, Luck says, is keeping the company’s mindset growth-oriented as it continues to push employee engagement through its core values. It’s no coincidence that those values—which include words like “entrepreneurial spirit,” “work hard, have fun,” “family,” “give back,” and “American pride”—were developed by ABC’s late founder Ken Hendricks, who launched the company in 1982 and by his death in 2007 had positioned it at the top of the country’s specialty dealer channel.
“Ken and Diane [Hendricks, Ken’s wife] built the company on a vision and a dream, but he grounded it in a set of core values,” Luck says. “I discovered not only the power of those values in providing the constitu-tional or driving prin-ciples of our business but also the power to think that it’s essential to much of our future success.”
The key: getting and maintaining employee buy-in. That’s a chore when you have more than 450 branches and $4.5 billion in revenue across 46 states. You can’t visit every yard, let alone recall everyone’s names, Luck says. “It’s impossible. You have to have people engage themselves as part of the team and feel like they’re producing,” he says. “It’s about personal engagement in the business, not having to look to someone else to qualify the engagement.”
