Today I was cleaning up my desk, in an attempt to organize it, and I found an article that I pulled out of a Reader’s Digest a few months ago. At the time I had no blog and no place to write about this article, so I kept it, in hopes of some day having a place where I could give it the attention it deserved and needed.
The article was titled, The Roofer’s Son, and it starts off talking about Ken Hendricks and how he dropped out of high school to work for his dad and became a billionaire. It sounds like the start of another rags to riches generic story, about a guy with luck and did something that no one else could do, right? Wrong. Ken Hendricks gives some amazing advice about how to run a business, from the single employee business to the 1000+ employee business. The insights about how and why his business, ABC Supply, is worth billions, is priceless in terms of value.
A little back ground on Ken Hendricks
Ken Hendricks does not come from a blue collar family, it is true that he is a roofer’s son, who dropped out of school in 11th grade. When he dropped out, he became a contractor and found out that the business owners of supply companies didn’t understand their customers business, they just wanted to sell something and didn’t care if it worked or not.
Sounds like a lot of businesses now a days doesn’t it? They forget about the people that made them what they are, and would rather spend an insane amount of money on the annual salary of a new CEO, in hopes that this person may solve their problems, instead of recognizing what their customer needs are. After all, this simple principal is so easy to overlook, that many companies write it off as being something unnecessary.
Hendricks, After 20 years of running his own roofing business, had the finances and experience to make a move. He heard of 3 supply centers that were for sale, and in 1982 he went with the best loan he could get, which had a 22 percent interest rate. The worse part was that each supply center was losing money. In four years time, the company acquired or opened almost 50 stores and had $183 million in sales.
25 years later, Ken Hendricks is the CEO, chairman, and sole owner of ABC Supply, which is the nations largest wholesale distributor of roofing, siding, windows, and gutters. In 2006 they had over $ 3 billion in sales. But as Hendricks says, not long ago he was only making $10,000 dollars a year working two full-time jobs. This man, who you probably have never heard of, in 2006 was 107th on the Forbes list of the top 400 richest people. In 2007, he was the 91st richest on the list, at least, he was until his accidental and untimely death on Dec 21, 2007.
The reason for this amazing success is some of the best advice you will ever find. Here is some of his advice, in Hendricks own words,
"One thing we’ve done differently from most companies is to always keep the people in place. It’s a fact that employees have a lot to offer. When I buy a business-and this is a business that might be failing-I talk to the forklift operator or the warehouse guy, and I’ll say, "If you were running this business, what would you do?" And he tells me 95 percent of what has to be changed for that business to be successful."
"Don’t let money be a motivator," he says to people who are starting a business. Instead, he says, "understand what the customer needs and how you, as the business owner, can help him improve his company. When you help your customer grow, you grow. Very few businesses understand that. They try to extract as much money from their customers as they can. But if that hurts their customers’ business, the customer goes broke, so who wins? Nobody."
An Example of two of the Q & A’s
What’s the most overrated secret to success?
Intelligence. Success is about how you take care of your employees and customers, and how sincere you are about that. You don’t have to be smart to treat people well. Swallow the ego and hire somebody who’s good at what you don’t have knowledge to do.
What’s the most importang you’ve learned in business?
That people have the right to fail. Otherwise, they stop thinking, and then you need more management to manage them because you have to think for them. But if they figure out why they failed, and if they correct it, they the failure has real value.
I highly recommend reading the article from Readers Digest, If you are only interested in the rest of the advice he gives during the Q & A, you can follow the second link.