In 2010, the Edward Hines Lumber Co. went bankrupt.
At the time, it seemed the company would be a sure casualty of a tough economy, a crumbling housing market and a distribution industry that was already hearing the faint tolls of the bell.
But US LBM purchased the 100-plus-year-old Chicago-based company out of bankruptcy. It was one of the first companies that would get folded into the super company, which today includes 35 divisions operating more than 250 locations. L.T. Gibson, president and CEO of US LBM, brought on Doug Jones, an industry veteran, to resuscitate the company.
Doug developed a long list of ideas for the company to adapt in order to re-establish itself as a market leader and thrive amid the forces of disruption that were quickly reshaping the industry.
But some of the management team didn’t want to hear it. Even though Hines was facing failure, many of its leaders refused to let go of the status quo.
That’s how strong the gravitational pull of the status quo is. There is a powerful, perpetual, always present, yet invisible force that pulls the business back to the status quo. Even when a company like Hines saw exactly how sticking to what worked yesterday was leading to the death of this century-old institution that had indeed innovated before, they couldn’t let it go.
This is a struggle I see many companies have. It’s even more challenging when it’s not bankruptcy staring you in the eyes but just slowly slimming profit margins. What’s the antidote?
I found it best expressed by management visionary Tom Peters, in a conversation we were having on Twitter. I asked if changing inherent inertia (that pull to the status quo) required an alternative vision and courage to act. He said he preferred a “level of fury with the status quo such that one cannot not act.”
Doug and his list of ideas were given full rein of the company. It took some courage on Doug’s part, but it paid off as the company emerged from bankruptcy and started down the path of continuous growth it is on today.
To get there, Doug had to change things across the board. He had to disrupt Hines in almost every area. His fury with the status quo spread. Here are some of the changes Doug implemented to turn Hines around.
Get culture right.
Doug says the company’s culture has a magnetic pulse, and it’s one he has deliberately cultivated by spending the time to find and retain the right kind of people. Leaders that turn away from culture and think of it as a field that will sow itself will find themselves with employees that are not as productive, fulfilled, creative and innovative as they could be. They also miss the connection between culture and customer experience – your people are on the front lines representing your company day in and day out. If they’re smart, well-trained, compassionate, personable and genuinely happy with the company they represent, customers see and feel that. In fact, it’s something that Doug feels changed the Hines reputation as it rose out of bankruptcy.
“We have hired some powerful people that I’ve known in the industry for quite a while, who have a solid work ethic and a high level of integrity,” Doug says.
Doug looked beyond the construction and materials space to find talent from outside the industry. One of his managers came from the burger chain Red Robin, because the manager had won accolades for providing top-notch customer service. Doug learns even more about these hires through personality testing, which helps him find the right balance of personalities on teams.
In 2019, Hines Supply was voted a top workplace by the Chicago Tribune, a testament to the culture he has in place.
Re-establish your vision by really getting to know your customers.
The company’s business cards don’t just say Hines Supply; they also say “the trusted resource for building your business.” Full disclosure: I helped them discover their real purpose in a two-day strategy session where we explored the possibilities of the question “Why is Hines here?”
We weren’t just trying to come up with a pithy new marketing tagline. We were committed to realigning the company’s vision and mission with its current goals and the value of what they were delivering to customers. In today’s competitive and fast-changing marketplace, distributors – every business, for that matter – must (re)discover their reason for being and how they create value for their customers.
So we looked at their customers deeper than ever before. I traveled in the field, visited contractors on the job site and worked side by side with their sales team. Through these experiences, a new value proposition emerged: Hines is about more than lumber (in fact, just as Steve Jobs took the word “Computer” from the company name when Apple Computers became simply Apple, Hines Lumber became simply Hines). Hines is the trusted resource that delivers so thoroughly on its customers’ needs across home building to help their customers’ businesses grow.
“We want to help our customers grow their businesses because if they grow, we grow, and then everybody wins,” Doug says.
That is the very definition of innovation: Leading your customers to a better future for which they are capable and willing to reward you. Everybody wins.
Invest in technology that differentiates you from your competitors.
Hines Supply developed an app that is a significant differentiator in its market to become a next-generation distributor. This is not tech for tech’s sake. It’s genuinely a communication tool that further develops the relationship with customers and reinforces the company’s trust customers have.
Through the app, customers know exactly where their products are when they are scheduled to arrive and what condition they arrived in, through delivery pictures. They can also access invoices for all orders, manage their accounts and see pricing for Hines products. This predictability and transparency in service and pricing builds trust with Hines. When its customers can rely on Hines to do its job, they, in turn, become more reliable and build trust with their customers. Everybody wins again.
I said earlier that your people are on the front line of the customer experience, which is certainly true. But the different ways that a customer can interact with your company have expanded over time, and customers expect to find information about products, services and orders without having to contact a salesperson or customer service. So your website, or an app like Hines’ app, becomes a major part of that front line. The technology piece has to be precise as customer-focused as your people are.
Over time, the Hines app is a living record of the trust customers are building in Hines. Its convenience shows customers that Hines understands their needs, and its updates on orders and deliveries reinforce Hines’ ability to keep its promises.
These are not all the ways that Hines has managed to become more innovative. The company has diversified its offerings and invested heavily in leadership training. Some of their showrooms offer virtual reality versions of homes, based on architectural drawings.
By continually looking for new sources of creativity, inspiration and innovation, Hines is pushing back on gravity. They constantly remain furious with the status quo. If you’re looking for ways to get mad at the way things are and start moving toward an innovative future, download my e-book, “Distribution Is Dead.”