LUMBERYARDS

84 Lumber: Meet the Rookie

BY Ken Ryan

In an effort to recognize the contributions of the company’s young talent, 84 Lumber recently instituted a Rookie of the Year award. The inaugural Rookie of the Year winner was Al Whitehead, co-manager in North Charlotte, N.C., who started as a manager trainee in June 2015.

In many ways, Al Whitehead is fulfilling a lifelong passion for building things. His passion was developed and nurtured as a child who spent hours designing structures with colorful, plastic Lego bricks.

That passion for building — and for Legos — never let go. But his building materials have grown considerably in size and value.

“I have always liked to construct things,” Whitehead said, referring to his Legos. “So it is kind of uncanny that that’s what I have been into and am still into today.”

Whitehead began his career in building materials, but left for five and half years when he worked as a personal trainer and sold off-road vehicles. It turned out, building materials was in his DNA, and when he got the opportunity to join 84 Lumber, he said he jumped at the chance.

“Seeing what we sell turn into structures is the best part of my job,” he said. “I get no greater high than when I go to a job site and see the progress being made with the materials that we supplied and witnessing it during the building process.”

Whitehead received the company’s Rookie of the Year award in 2016. And like any thoughtful award winner, he credited his teammates and managers at 84 Lumber who set the stage for his performance. “They really give you the tools you need to be successful,” he said.

Specifically, Whitehead hailed the company’s Lumber Camp, in which new management trainees participate in a rigorous two-and-a half days of training, with top executives on hand to provide guidance. Whitehead explains it this way: “It is like college in a way; you network with the guys—it’s something special and I don’t think anyone else does it like 84 Lumber does. If you run into an obstacle, you can handle it because of the training you went through.”

In addition to structured training, there’s no shortage of informal mentorship within the 84 Lumber ranks, he said. And Whitehead feels that culture of support begins at the top of the privately held company, with Joe Hardy and Maggie Hardy Magerko setting the tone. “We are all 84 members,” Whitehead said. “From the top down I have received mentorship, and it continues to inspire me and drive me to dream bigger. Everyone has played a vital part of advancing my career and everyone around me has given me the motivation to succeed and push harder and keep going.”

As a co-manager at 84 Lumber, Whitehead routinely comes into a wide variety of projects and problems with any combination of contractors, suppliers, homeowners, as well as others. With so many moving parts, the manager of a building supply dealer is in a position that requires talent. No two situations are exactly the same.

To Whitehead, success comes down to respect, patience and effective communication. “Those are my three keys in terms of working with every customer,” he said. “You have to have a level of empathy to put yourself in a customer’s shoes. There are plenty of times in my life when I had issues as a consumer. So you try to work together with the customer to find a solution. In the end you have to be able to listen to the customer—and the issues that come up and be able to resolve them.”

Whitehead has worked for big box lumber building materials suppliers so he has some perspective on what 84 Lumber brings to the table.

For others starting out in the building supply industry, Whitehead offers the following career advice: keep an open mind, have a plan, and stick to it. For himself, he enjoys serving customers and chasing his goals at 84 Lumber. “And I mean that with all seriousness. There is no shortage of opportunities, no shortage of possibilities, if you put your mind to it.”

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See more coverage of 84 Lumber in this special issue of HBSDealer.

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Builders FirstSource sales rise 7.6%

BY Andy Carlo

Builders FirstSource (BFS) reported third quarter 2017 net sales of $1.9 billion, a 7.6% increase from third quarter 2016 net sales of $1.74 billion.

The Dallas, Texas-based pro dealer also reported a third quarter net income of $39.8 million compared to a net income of $125.5 million for the third quarter of 2016. Net income for the third quarter of 2016 was weighed down by a tax valuation allowance of $117.6 million against BFS’s deferred income tax assets offset by $53.3 million in debt issuance and refinancing costs.

2017 year-to-date net sales were $5.3 billion, a 9% percent increase over net sales of $4.8 billion for first nine months of 2016. For the first 9 months of 2017, BFS reported a net income was $81.5 million compared to a net income of $137.9 million during the same period a year ago.

“We proved our agility to respond to unexpected challenges, including two major hurricanes and commodity inflation,” Floyd Sherman, BFS CEO. “The company is positioned to capitalize on the growth opportunity from our national footprint, our strong customer relationships and our end market diversity. We continue our commitment to investments in strategic growth initiatives, including building our sales force and expanding our manufacturing footprint to grow shareholder value, while making further progress in paying down debt and reducing our leverage ratio on a year over year basis.”

Sherman has lead BFS for the past 16 years and will step down as CEO, effective Jan. 1, 2018

“The outlook for Builders FirstSource for the balance of 2017 and the years ahead is very promising,” said Chad Crow, BFS president and chief operating officer. The new residential housing market continues to show steady growth in demand.  Against this backdrop, we continue to invest to further leverage our scale, to broaden our product portfolio, and expand our geographic and end market diversity to capture growth in the coming years.”

Builders FirstSource is one of the nation’s largest pro dealers with more than 400 locations in 40 states. 

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84 Lumber: Meet the Owner

BY Ken Clark

“I only know one business, because I started here when I was 5,” Maggie Hardy Magerko said. 

The owner and president of 84 Lumber took over leadership from her father, Joe Hardy, in 1992 at the age of 26, and she led the lumberyard through both the go-go building boom and a devastating housing downturn, and now the industry comeback. 

In a forward-looking, wide-ranging interview with HBSDealer, Maggie talked passionately about the importance of technology, her admiration for her “guys” (a term that applies to both men and women who work at the company’s more than 260 stores), and the biggest adrenaline rush of her career. 


What’s the next big story to come out of the company?

One thing about us here at 84 Lumber: It’s never business as usual. If everything around us is business as usual, that’s when it’s time to disrupt things and cause some chaos. That’s where the biggest opportunities are. You don’t sit around and wait until things are bad. I like to disrupt things when things are good to make them even better. 

In 2018, operational efficiency and technology are going to be the key for us. And that’s where my money is.  


How do you describe your leadership style?

I’ve been doing this since 1992. And it’s up to me as the leader and the owner, to remove obstacles that prevent our people from accomplishing their goals. Information technology is just one area. I want to do anything I can to make things smooth, to grease the works. I am the grease, and that’s my mission. We come together and make a decision. We hope it’s the right decision. If it’s not. Oh well, we screwed up. Let’s make the right decision next time and move forward.

As far as going out and opening another 100 stores, that’s not very fun to me. Fun is going to be making our stores more efficient, and a better experience for our associates and our customers. 

We talk a lot about giving tools to our people and making 84 Lumber much better as a company, and today a lot of those tools are in the technology and IT world. And I’d be a hypocrite if I didn’t try to be the leader that makes that happen for my people.


Does that mark a change from the early days of 84 Lumber? 

I guess the biggest difference is that I don’t really care who screwed up. I really don’t have time for it. I really don’t. I want to focus on the positives and move forward. My dad is 94 years old, and in his era, it was management by intimidation. I manage by encouragement.

I don’t necessarily go around and shake hands and kiss babies and go on to the next facility. I’m not on a campaign trail. I go where I’m needed. And unfortunately, it’s not always a pleasant situation. I like to work with people, especially when times are tough. It’s very guttural, very real, very personal. 


What about the physical stores? You can’t help but notice how those have changed from the early days of 84 Lumber. 

That’s great because I helped design them!

So, yes, we need facilities. I didn’t want to go around and build little tin cans. We listened to our customers and we designed facilities for our customers. And yes, they’re absolutely very different from before. 

In the old days, we would buy an eight-acre lot and build on four of them. And then we would say, ‘if you can hit these benchmarks, then in two or three years, you’ll get more resources.’ But after the depression — and I call it a depression — we’ve become more aggressive. We want to go into a market with all of our guns loaded — not only with our people, but with the EWPs, the mill shops, the kitchen design showrooms, installed sales. All of these services that make us ready to compete.


There was huge interest in the 84 Lumber Super Bowl commercial, both in the industry and outside of the industry. What did all of that teach you?

I learned just to be me. The whole experience was humbling and empowering. I had no idea the impact it would have, from all walks of life. I was in Manhattan the next day (Feb. 7), and I had strangers come up to me and start crying. The thing with the wall, with Trump, with politics and immigration — it all came to a head. That wasn’t planned. And what I find is people have a tough time talking about it, even to this day.

I had no idea it would be that enormous. It rocked my world. And it’s opening doors in a way that I never would have expected. It was an adrenaline rush that I never experienced in my life. I really wanted 84 Lumber to get known, in a big way. The time was right, and we did it. 

The moon and the stars lined up for us. I was really angry at first when I found out that Fox censored our commercial, but from a marketing standpoint, it turned out to be an advantage. We had lightning in a bottle.


What’s the best part of your job?

I have to tell you, when I walk into a store, and I see the manager, and their families tell me ‘thank you for allowing us to be part of a company to better our lives,’ there is no better high, and it’s still that way today.

If I’m able to touch somebody in any way, to be able to affect somebody, I take that in a very humbling way. The older I get, it’s what life’s all about. I hope we make a positive impact with my company and with our people. 

It’s fun. I love my guys. When I’m down in the dumps, all I think about are my guys at 84, and I get the biggest smile on my face.


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See more coverage of 84 Lumber in this special issue of HBSDealer.

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