In their words: The US LBM story
The mailing address for US LBM Holdings is Green Bay, Wis. But don’t be fooled. The CEO lives in Ohio. The HR chief in Boston. The COO in New Jersey. And the marketing director is in Chicago.
The system of a permanent, floating headquarters is by design. “I don’t want to be handcuffed to a building,” says CEO L.T. Gibson. “One of the ways to avoid a big corporate culture is to avoid a big corporate office.”
The non-corporate corporation is one of the themes that emerged repeatedly as HCN spoke to several of the US LBM executives for their take on what makes US LBM Holdings the kind of company that can grow from a standing start to No. 14 on the HCN Pro Dealer Scoreboard in a mere four years.
US LBM executives showed a remarkable similarity in their description of the company culture. Three key ideas were repeated: local autonomy for the eight operating companies, clear lines of communication and the desire for continuous improvement. And on top of it all are the buying power and synergies that come with eight operating companies.
US LBM Holdings is growth-oriented in two ways: It continuously looks to make acquisitions, as it did in April with the acquisition of Shelly Enterprises. And it seeks to bring its resources to the local markets to help the operating companies achieve their individual growth strategies.
“Our companies have leading positions in their markets,” said CFO Rick Kolaczewski. “We expect them to grow faster than the competition.”
Here’s what else we heard that paints a picture of the 2013 Pro Dealer of the Year:
• “When I look at our business, I think part of what makes us work is the mix of the personalities. There are people with long histories in the business. Then Randy Aardema [EVP supply chain] and myself come from the vendor communities, and we see it with a different perspective. It makes for some good conversations.”
— Rick Kolaczewski, CFO (formerly with Fortune Brands)
• “I think if there’s a misperception, it would be that we buy a company, give them some money and leave them alone. Actually, our goal is to give them a lot of guidance. And we share best practices. And that’s the fun part — the part that leads to growth.”
— L.T. Gibson, CEO
• “If there’s a decision on credit underwriting, that’s handled right here by me and Greg [Belcher]. And we can make decisions very quickly. In my previous two companies, the underwriting took two or three days. And sometimes you don’t have two or three days. It’s the same with purchasing decisions. If I have a customer who needs a preferred supplier, I can act quickly. “
— Doug Jones, president, Edward Hines
• “We want our operating companies to be able to act like independents in the local market, reacting to market changes and customer preferences. And we don’t dictate any product lines or brands to our operating companies.”
— Jeff Umosella, COO and president, Universal Supply
THE “NEED TO KNOW” OF US LBM
►Its entire model is built on speed, providing lean efficiency to its subsidiaries and customers.
►It’s currently eight operating companies strong and is concentrated in the Midwest and Northeast.
►US LBM Holdings provides corporate oversight — IT, human resources and financial clout — to its divisions.
►It’s the 13th largest lumber and building materials distributor in the United States, and it’s only been around for four years.
►Its subsidiaries operate virtually independently, with their own management structures, brand identities and capacities to serve their local markets.
►There’s little in the way of a political hierarchy; indeed, the company motto is “together, we are building momentum.”
US LBM Holdings will accept the HCN 2013 Pro Dealer of the Year award at the Oct. 23-25 ProDealer Industry Summit in Nashville, Tenn.
Exceptionalism, as pertains to US LBM Holdings, begins with its growth. As one of the fastest-growing building materials distributors in the country, HCN’s 2013 Pro Dealer of the Year boasts year-over-year revenue growth of 15.7%, stands tall at 55 locations nationwide, and ranks 14th in sales on the HCN Pro Dealer Industry Scoreboard — all just four years after its inception.
There’s no secret, but there are principals. US LBM’s growth runs on the combined strength of eight autonomous companies, a focus on local knowledge and the ability to provide speed in the marketplace. And, most importantly, according to executives, it’s the people.
“We try to keep it very simple,” said CEO L.T. Gibson, describing his company’s structure. “There are synergies on the administrative side. And we have a local market focus. We think that local brands are very important. At the same time, we’re very disciplined as a group.”
Gibson, a former Stock Building Supply VP, oversees a culture that some might call the anti-corporate corporate culture. US LBM Holdings has 16 employees, while some 2,000 handle the day-to-day as employees of the various operating companies.
Karen Charielle, VP human resources at US LBM Holdings, added: “We have a wonderful team. We’re great partners together. Our success is driven by our employees, and showing that on the executive level drives [that ethic] down through the organization.”
The company has a healthy appetite for new acquisitions, associates and customers, said Charielle. And so far, the divergent identities of its individual yards seem to be a source of positive development.
“I don’t see it as a challenge — I see it as an opportunity,” she added. “Each company may have different customers and markets, but we all have the same philosophies and take part in a strategic plan we develop each year. We share best practices, and that creates synergy.”
The company has its sights set on paving the way for sustained progress in its company culture. Specifically, this means strengthening its human capital through a new in-house training and development program by the name of US LBM University. Charielle and her team will identify key successors and take them through the curriculum, taught by executives at the company. At the moment, they’re looking to partner with universities that stand out for their Lean, distribution, sales and leadership training.
“We’re passionate about our associates,” said Charielle. “If we’re giving them respect and guidance, that’ll return back to our customers.”
EIGHT AND GROWING
US LBM’s operating companies:
- Bellevue Builders Supply, Schenectady, N.Y.
- East Haven Builders Supply, East Haven, Conn.
- Edward Hines Lumber, Buffalo Grove, Ill.
- John H. Myers & Son, York, Pa.
- Lyman Lumber, Excelsior, Minn.
- Shelly’s Lumber, Telford, Pa.
- Universal Supply Co., Hammonton, N.J.
- Wisconsin Building Supply, Green Bay, Wis.
Without leaving, vinyl siding makes a comeback
By the best estimates of the Vinyl Siding Institute, last year was the first year since 2004 that shipments of vinyl siding and soffit have shown a year-over-year increase.
For all that time — and longer — vinyl has remained the nation’s leading choice for exterior cladding. Census Bureau reports show that 110,000 out of 368,000 single-family homes sold in 2013 were built with vinyl siding as the main exterior material. Wood? A mere 11,000.
The strength of vinyl is no surprise to Jonathan Wierengo, VP marketing for the Tapco Group, who sees improved technology combining with customer tastes working in the favor of Tapco’s The Foundry division.
There are color options — more than 300 for vinyl — and a low-maintenance story that are gaining converts among younger (in other words, stylish and busy) homeowners. Also, siding technology has advanced to make more realistic grain patterns and better butt edges, he said.
“It’s not the vinyl siding I used to see on my parents’ house in the 1970s and ’80s,” Wierengo told HCN.
For instance, The Foundry’s Weathered Collection Shakes have been built with darker hues in deep grooves and lighter shades on the ridges and high points, to better imitate the real thing.
“Our goal is to make realistic products that replicate nature,” Wierengo said.