An Indian reservation near South Dakota’s Black Hills and a chain of lumberyards set amid Maine’s Eastern White Pines seemingly have nothing in common. But both of those vast places—plus a rare medical condition—figure not only in the life of Kevin Hancock but also help explain why Hancock Lumber Co. is 2017’s ProSales Dealer of the Year.
Lots of past DOYs owed their success to a gifted individual or a talented family. Hancock Lumber may be in its sixth generation and 50-year-old Kevin might be a big reason why, but circumstances and personal philosophy make Hancock Lumber’s accomplishment much more of a group achievement.
Hancock’s culture embraces team huddles and bottom-up solution-finding. About the only meetings Kevin leads are with his outside board of directors (he believes in that structure even though the company is family-owned), and executive team. “The whole idea is more about pushing power out from the center rather than collecting it here,” he says.
“Kevin’s a great strategist, a great visionary, and a great motivator,” says Paul Wainman, a native of England who joined the company in February as chief financial officer. “He doesn’t stand over me. He lets me go on with it. There’s huge empowerment. We’re allowed to make decisions.”
A Voice in the Wilderness
Kevin already was moving toward a group culture when his vocal chords went awry from a condition called spasmodic dysphonia. When a person with this condition tries to speak, involuntary spasms in the larynx’s muscles cause the voice to break up. The ailment made it painful for Kevin to speak any length of time, and today he can get only temporary relief by receiving Botox shots into his voicebox.
He had to learn how to run what now is a 14-location, 475-employee, $155 million company while talking less. His solution, he says, started defensively: “In 2010, I was right in the middle of trying to help the company through the downturn, so I got really good at answering questions with a question. ... What started as a defensive mechanism [to spare my throat] became something more. People already know what the answer should be. It was really powerful to hear people propose actions. Then it was their idea, not mine. So we kept building on that.”
Kevin started creating lists of things to address at meetings but then would hide his list under a blank sheet of paper. More often than not, he says, people at the meeting not only raised the issues Kevin wanted to cover but also “provided the answers to the test:” their own recommendations for what to do.
“People will let the supervisor or manager gobble up whatever work the boss wants to do, and they’ll do whatever’s left,” he says. “If the leaders hold back from grabbing every problem, challenge, or opportunity and have the courage to leave it out there, 99% of the time the people will scoop it up.”
Ideas reach Hancock executives via other sources as well. One important conduit is employee survey that an outside firm conducts to select its annual list of Best Places to Work in Maine. Kevin believes having an outsider run the survey produces more honest answers. He also believes doing the survey year after year provides key data to track what’s working. So far, the results have been as encouraging as they are informing: Hancock has been named a Best Place to Work in Maine for three years running.
“Leadership has evolved,” says Harland Storey, general manager of Hancock’s store in Yarmouth. “They understand that the good ideas come from the people doing the work.”
It’s easy to think Hancock Lumber succeeds because Maine is a place apart, and not just because you can buy lobster compost there. Hancock has been around since 1848, holds strong market share in a state that big dealers and builders avoid, and taps an ethnically homogenous population known for working hard and living frugally. Kevin also cautions that his team-oriented management style doesn’t work well in a recession, when quick decision-making is vital.
Still, much that Hancock does can work outside of Maine. But if you wish to copy this dealer’s business style, note how its leaders channel individual freedom by setting extensive ground rules and expectations. These come in two forms: values and metrics.
Rarely will you find an LBM operation in which heavily trafficked consumer areas have as many signs extolling a company’s customer promises—and employee expectations. For instance, a sign near the Yarmouth store’s front door commends “The Road to WOW Differentiation” by celebrating qualities like focus, discipline, and engagement. A circle chart urges staff to “guard every intersection”—that is, take care as a transaction passes through multiple staffers before reaching the customer, who presumably is reading the same sign. Close to half of the company’s marketing budget goes toward what other dealers would regard as internal messaging.
Along with the drumbeat of values and expectations, Hancock also is fanatical about metrics. And rarely will you find a dealer that shares its numbers so freely.
Customer brochures report such typically private numbers as Hancock’s On Time-In Full (OTIF) percentage, which measures the share of all deliveries that arrive by the time promised with everything requested on board. Most dealers that launch OTIF start with results in the 70s. Hancock’s been running a sterling 94.3%. And when sales reps meet with specific customers, they hand out sheets showing not only what that customer buys from Hancock but also what the typical customer purchases.
In showrooms, the company keeps track of how much time per linear foot it takes to do a design job. Hancock has even figured out differences in design times based on the cabinetry product to be used, thus helping both it and customers know how much time and effort will be needed to do a job.
Meanwhile, load-pullers and sales reps both strive to improve “journey value,” the total dollar value of goods on a vehicle when it leaves the lot. Hancock wants each truck to carry the maximum possible number of dollars’ worth of materials because that maximizes resources and promotes efficiency. It also cuts the risk of errors and injuries.
Ruth Kellick-Grubbs, who has worked with Hancock Lumber for more than 20 years, says lots of other dealers don’t embrace those metrics, thinking their job is to jump up and deliver goods as soon as the customer calls. “Everyone says that’s a competitive advantage, but is it really?” she asks. “We’re changing that model and delivering service.
“If you want to be like Hancock, you have to decide if you’re going to run your business differently than in the past,” Kellick-Grubbs adds. “Others haven’t focused on what drives value, drives cost, how to make things different. The first question is, ‘How do we help builders be successful?’”
One of the best ways efficiency and customer service come together lies in how Hancock deals with special orders, which represent close to half the company’s business. As soon as a truck carrying special orders arrive, the on-site inventory manager prints out a set of customized stickers that detail numerous things: who gets the product, where the product will go, the item’s number on the invoice, its place as part of a bigger collection of items, and more. There’s also a bar code for easy entry into the computer system. Creating a tag for each incoming item helps staff spot whether a product is missing. And the tag has a color strip at the top that changes every six months, making it easy to tell if a product brought in a long while back was never delivered.
Once the special order is received and stored, the logistics manager launches a delivery process that includes sending a notice to the customer. Formatted so it can be read easily on a smartphone, this Special Order Notification tells what will be delivered on what day within a wished-for time slot. That gives customers an opportunity to adjust what’s to be delivered (if they want an extra box of nails, for instance) and request a better delivery time.
One Click, Many Readers
By doing all this, Hancock handles special orders faster and more accurately and stands a better chance of achieving an OTIF number that leaves builders happy. “We’ve had customers who told us they can’t leave us because of the communication and the value it brings,” says Mike Hall, manager of retail operations and IT. It also helps execute one of Hancock’s core philosophies: “many to many” communication. Sharing information—such as automatically notifying the account manager as well as the customer when special orders arrive—helps avoid bottlenecks and reduces errors.
Improving metrics typically requires creating processes. Processes typically make a company more efficient, and thus more likely to generate profits. But the drive toward efficiency also has a personal objective: helping staffers live a more balanced life.
Kevin believes one of his signal achievements has been reducing the number of hours his employees work. “In LBM, people work 60, 65, 70 hours a week,” he says. “I remember years having to rest all weekend just to get ready for Monday. I wanted to try to put the workweek back in its place.”
That goal was doubly difficult in Maine, where historically the base pay was low and so working overtime was vital to getting by. Kevin says he wanted to make efficient productivity, not working more hours, the motivation that produced higher pay. That led to the creation of a program called Performance Gold, in which monthly and quarterly incentives are tied to corporate goals and metrics.
As a result, the average hourly staffer now works about 42 hours a week, down from 48, even as that person’s average take-home pay has risen 5% per year. Meanwhile, the typical senior manager’s workload has fallen to 50 hours per week.
“This doesn’t make work easy, and it doesn’t make people rich,” Kevin says, “but if you can work a little bit less and earn a little bit more, that’s the right expectation you should be facing.”
Human Resources Director Wendy Scribner, a 30-year veteran at Hancock, says the company has long promoted a family atmosphere. But there was lots of room for improvement, particularly after Hancock Lumber suffered during the housing crash. In 2009, when Hancock first took part in the Best Places to Work survey, “the results were eye-opening,” Scribner says.
That experience led to employee focus groups. Not long after, improvements started: Hancock severely limited last-minute schedule changes, instituted a formal recognition program, and began celebrating safety milestones. All employees got email addresses, team huddles began, and job openings were communicated better. There’s an organizational chart, but it’s not viewed as an invitation to dictatorship.“Even when Kevin has an idea, he runs it by the group,” Scribner says.
It’s a challenge to win over the state’s famously persnickety builders, who staffers say disdained the arrival of pneumatic fasteners and laser levels. Then again, “It rains uphill here in the winter, so it takes a skill set to be able to build here,” Hall says. Asked to describe Mainers, Kevin replied with four words: proud, independent, feisty, and neighborly. But even in a state that people love to visit for its unchanging attractions, Kevin knows that employees expect to be treated differently than they were a generation ago.
“It’s a global idea,” he says. “How do we make people who are doing all the work and providing all the value feel even more appreciated, important, and in charge? ... If your organization has strong values so that people know what your brand is about, then anybody can make quick decisions.”
Learning the Lakota Way
It might seem ironic, but Kevin says these things started coming together once he began worrying less about what other people needed to do and focusing more on what he needed to do. One striking element in Kevin’s book about his visits to the Indian reservations is that he didn’t go to South Dakota to solve the tribe’s problems or to find some medicine man who would cure his throat. He went far from home to help find himself.
“When the voice [problem] first happened, was it a turning point? Absolutely,” Kellick-Grubbs says. “Kevin’s a charismatic speaker. When he lost his voice, he had to change. Is it a factor now? No, not as much. ... People want to tell you [how best to run things]. The challenge is, can you be quiet? That’s a really big leadership challenge—can you listen?”
“It’s letting go of the idea that there’s a single truth that’s happening,” Kevin says. “The truth is the collective voice of the organization.” His goal is intimacy—employee intimacy, community intimacy, customer intimacy—in a way that hits the sweet spot in which “work-life is about as good and stable as it can get.” Hancock Lumber has found its center.
Read More About Hancock:
Soul Food: How Maine's Kevin Hancock Found Himself by Visiting a South Dakota Indian Reservation
Steal These Ideas! A collection of Hancock's best practices in marketing and key takeaways in operations.