In Depth: ProBuild's regional game plan

By Brae Canlen

Paul Hylbert, CEO of ProBuild Holdings, has an aversion to "salary sucking overhead folks," a term he used facetiously during a recent interview. The head of the nation's largest pro dealer much prefers his ground-level executives to get out in front of customers.

Describing the company’s market-centric structure, Hylbert explained how smaller regions and fewer back-office duties will enable his regional presidents to do just that. Two of these regional presidents, Joe Todd in the Northeast and Jim Cavanaugh in South Central, agreed to discuss how their jobs have changed under the reorganization, which went into effect five months ago.

Joe Todd President, Northeast region

Unlike the other regional presidents, Joe Todd has worked with Hylbert and the other C-level executives at the Denver headquarters, where he served as senior VP market development. The 42-year-old executive came to ProBuild from Strober, which purchased his company, Haddonfield Lumber, in 1998. Strober then merged with Lanoga to form ProBuild in 2006.

At first ProBuild put Todd in charge of its strategic accounts division, which served the nation’s top builders. But the market has shifted since then, and each region now has someone who also works with strategic accounts. Todd was given the Northeast region and moved back to New Jersey, establishing its headquarters in Morristown, N.J.

Todd said he is fully on board with the changes from the top. “Building is always a local business, and we want to be driving market share gains through the local market,” he said. As the regional president, Todd believes he is best able to decide the optimum number and location of stores and manufacturing plants in his territory -- same goes for staffing and rolling stock decisions. “I have the authorization to move equipment and [personnel] around,” he explained.

Todd is an integral part of ProBuild’s push into the Chicago market, which involves taking over some of the leases abandoned by Stock Building Supply during its Chapter 11 filing. The expansion involves opening “several” lumberyards and a truss and wall panel manufacturing plant. According to ProBuild, the property is owned by the Seigle family, who operated Seigle Home & Building Centers until Stock purchased them in 2005. Todd said he is working “to bring some of their folks over to ProBuild.”

Denver has also left some purchasing decisions up to its regions -- for instance, the type of exterior siding (but not the vendor or the terms). Installed sales is also a regional decision.

“It’s the job of the presidents to figure out where it makes sense,” Hylbert said.

Todd explained it this way: “We really don’t go and try and impose our will on a market. [Instead], we look at how the permits and starts get applied.” In the Washington, D.C.-Baltimore area, for example, “We install just about every product we have,” Todd said. But in Chicago, or Upstate New York, “not much at all.”

Todd still spends about 20% of his time interacting with national accounts and still retains the position of president, market development. (“Certain large customers won’t let Joe go,” explained Hylbert.) Being a regional president is still new to Todd, but the time he spent at the company’s Denver headquarters has come in handy. “You can take advantage of big without letting big get in the way,” he explained.

Jim Cavanaugh President, South Central region

When Jim Cavanaugh was appointed president of the South Central region at ProBuild, he already had three decades in the industry. The former president of Hope Lumber, a regional chain of 49 lumberyards that ProBuild bought in 2006, Cavanaugh knew how to run a $1 billion company on his own.

The Tulsa, Okla.-based pro dealer was always a big proponent of decentralized operations and empowered field staff. Now he belongs to the nation’s largest LBM chain, one that is trying to strike a balance between its new theme -- “The Power of One” -- and its long legacy of successful, but independent, LBM operators.

Hope Lumber made its name by supplying some of the nation’s largest builders in Houston, Dallas-Fort Worth, Tulsa and the Rio Grande Valley. It provided framing services, trusses, door assembly -- in short, turnkey packages. But Cavanaugh, who built much of his success on serving the production builder, said he likes having more time to hobnob with the local guys.

“A big part of our opportunity is with the regional and custom builder,” Cavanaugh told Home Channel News. “We’re focused on every single customer.”

Cavanaugh estimated that he once spent 20% of his time on IT infrastructure, supply chain tasks, accounts payable and other corporate chores. A ProBuild reshuffling of the divisions, coupled with a mandate to increase customer face time, has freed him up to visit local builders, Cavanaugh said.

With a territory that now covers Missouri, Oklahoma, Arkansas, Texas, New Mexico, Kansas and Colorado, Cavanaugh may need more than just a few extra hours each week.

Cavanaugh is a firm believer in the “6S” strategy of workplace organization and safety, which is based on a Japanese methodology of eliminating waste and improving workflow. Hope Lumber began implementing 6S prior to the ProBuild acquisition, and the idea is catching on at ProBuild manufacturing facilities, according to Cavanaugh.

“If it’s good for a component facility, why not a lumberyard?” he asked. Cavanaugh would like to see the concepts behind the six 6s -- Safety, Sort, Set in Order, Shine, Standardize and Sustain -- become part of the company fabric. The intent is to operate in a lean environment, but the ultimate goal, Cavanaugh said, is improved employee morale and customer service.