Phil Hauck's TEC Blog

Tuesday, November 19, 2013

David Luck, ABC Supply, on Core Values ...

        It took me eight years of being a TEC Chair to figure out that the hard stuff is much, much easier to make happen if the soft stuff is in place.
David Luck, who has grown ABC Supply, Beloit, by $3 billion dollars since 2007, confirmed that in spades at a recent St. Norbert CEO Breakfast & Strategy presentation.  ABC Supply at $5 billion is the nation's largest distributor of external construction supplies, and was founded by entrepreneur Ken Hendricks in the early 1980s.  It is now 100% owned by his wife.
In 2007, Hendricks died in a tragic accident at his home.  "Ken never talked business with people.  He always talked about his vision for the company, and how employees and customers need to be treated."
"After he died, I began a lengthy tour of the company's regions and stores to learn how they were looking at Ken's death and our management team.  I would spend each day talking with employees, and then we would have dinner together that evening.  It was those dinner conversations that were the key, when they felt more comfortable talking.  I learned that they were comfortable with the management team, which had been in place since I got there in 1998, and the direction of the company. What they were worried about was whether the company would "feel" the same.  Whether we would "feel" the same kept coming up, dinner after dinner.  Once we recognized that, we knew what we had to do.
"When we got back to Beloit, we called a senior team meeting to download what each of us felt were the "core values" that Ken would espouse and protect.  They hadn't been written down before.  It took us only ten minutes.  Some things were subsets of others.  We didn't create them.  We "discovered" them.
"What we came up with were:
Respect
Opportunity
Work Hard --- Have Fun
Entrepreneurial Spirit
Family
Give Back
American Pride
(Today, there is a booklet with a page dedicated to describing what each of these means.)
"Our huge management meeting was coming up, where all the managers were gathered for our five-day session.  We took the first three days of that to do nothing but present and discuss the Core Values … and how they needed to be continued as part and parcel of how we manage.  How they must be who we are.  How they must continue to create our "feel."
"You have to understand the context of the times.  As a nation, we were slipping fast into the Great Recession … and construction had plummeted.  We were in trouble.  But …
"Once we reaffirmed Ken's Core Values … and  everyone knew that the "feel" of the company wouldn't change … we got on a roll.  Over the next five years, we more than doubled the size of our business, adding $3 billion in revenues.  
"That's the power of Core Values."

What Changes, What Doesn't
Luck makes several other important points:
•  Everyone must understand what changes and what doesn't.  What Doesn't Change:  Core Values, Core Purpose and Visionary Goal.  What Does Change: Mission, and Strategic Goals.
•  The Number One reason to LEAD with Core Values:  They are the Catalyst that enables Change!  When people know the "feel" of the company won't change, they are far more willing to experiment with the other types of change that drive success in the specific marketplace … not only go-to-market strategies, but even certain behaviors that constitute Culture that must change.

Other of his points:
•  Cultures of stores in various parts of the country can be different, as long as the driving Core Values are similar.  That's why hiring to the Core Values first is absolutely critical.  You must know that the person already has habits/beliefs consistent with them, or neither the person nor the organization will thrive.  Culture can be shaped as needed, but always with the foundation of the Core Values.
•  Of the Core Values, Respect is the most important.  They are all borne of Ken's frustrations … as a high school dropout who went into the roofing business and felt his suppliers could have treated him better … and in understanding what customers wanted.
•  Managers are charged and evaluated on three things, in this order:  Employee Engagement, Customer Engagement … and then Financial Performance.  We know that if Financial Performance is low, but Employee and Custoemr Engagement scores are high, then Financial Performance is only a matter of time.  When you live and treat people according to our Core Values … and are driven by our Core Purpose … then you'll be in a position where customers will almost throw money at you.
•  Core Purpose is your reason for being other than making money.  It's the Passion that you're also good at.  ABC's is:  "promoting and preserving the American Dream by helping people accomplish the extraordinary - based on our fundamental belief that every person has within themselves (sic) the ability to do great things.:"
•  And Mission:  "ABC's mission is to be the biggest, best, and easiest service company distributing select exterior building products.  We will be recognized as an "employee first" company producing world-class associate engagement, customer engagement, and financial results."

About David Luck
He's an Alabaman with loyalties to Auburn, where three times a year he returns to teach a high level class on strategy.  He feels that today's young people are as sharp as ever, and will do what's necessary to reverse the negatives of the current leadership generation.  Prior to joining ABC Supply in 1998, he was president of the gigantic Firestone Tire retail organization.  "Ken had been recruiting me for a year, and I finally told him that I am a "redneck" at heart, in a good sense … like hunting fishing, balance of life, pickups, core of America.  And he told me 'Heck, is that all?  We have more rednecks in northern Wisconsin than you can shake a stick at!'  So, I feel comfortable here today."

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