Bill Hayward, President, CEO, and Chief Sustainability Officer, Hayward
Robert Houser Bill Hayward, President, CEO, and Chief Sustainability Officer, Hayward

Ensconced by an award-winning, environmentally friendly showroom design center, the world's only solar-powered truss and wall panel plant, and the first full-line lumberyards in California to stock Forest Stewardship Council (FSC)–certified lumber, it may be surprising that Bill Hayward isn't one to immediately push the sustainability button. "Sustainability is a background value," says the president, CEO, and—yes—chief sustainability officer of Monterey, Calif.–based Hayward, the 2003 PROSALES Dealer of the Year. "It's something to talk about after a builder is already there, it's something that, all other competitive aspects being equal, we can bring to the table to set us apart."

Not that Hayward needs to differentiate itself too often. In fact, most of the time the company is already enjoying a competitive advantage with builders in Central California at one of its seven lumberyards, three design centers, and door and truss manufacturing plant that collectively accounted for $130 million in 2003 sales. "They have branch penetration and are the biggest supplier in town in our markets from North Santa Barbara all the way through Paso Robles," says Shawn Reed, construction services manager for Dallas-based Centex Homes' operations in Central California. "There's nobody that can really compete with them on the supply side in scale," Reed says. "They are so there. They are so available."

Vertically integrated and progressively minded, Hayward has been making itself available not only to California builders but to the LBM supply industry at large since the company's founding in 1919 by Bill Hayward's great grandfather Homer T. Hayward. Four generations and 85 years later, the company still prides itself on the vision that "the right people, given the right resources and freedom, will achieve greatness." From state-of-the-art facilities to a sustainable business approach unique to the construction industry to a competitive zeal coupled with initiatives to share best practices with their peers, Hayward truly enables the quest for greatness, in its own markets and beyond.

"Part of what turns us on on a daily basis is that we don't want to just do the same thing, we want to add to it, we want to grow, we want to make it different," explains Hayward. "We don't want to operate just like another lumberyard. Building green and embracing sustainability is an opportunity to demonstrate and to learn and to think about building in a more responsible way."

Environmentally friendly, yes, but don't count Hayward out as some left-coast softy—that's when they catapult right past you in the market. In the late 1980s, for instance, California fell into a deep recession triggered by a lapse in federal defense spending, and Hayward responded by devoting almost all of the '90s to getting leaner, meaner, and greener. "We have been both patient and predatory," Hayward says. "We had 24 LBM [competitor] stores close in our market between '92 and '98. It was inevitable. It was either us or them. And it wasn't going to be us."

California LBM margins in 1992 were around 30 percent, but with the recession beginning to bear down, company executives led by then president Homer M. Hayward sensed a high watermark and began preparing for the downturn by preemptively operating the company at a 20 to 23 percent margin range. "It was a huge jump," says Bill Hayward of the adjustments to business operations, felt most notably at product price points. "We put our head down, restructured our business and endured the pain and suffering. But we predicted that when the recession ended there were going to be a whole bunch of companies that were gone, and we would be in a very strong place to compete with the remaining players—and that played out."

The scenario unfolded so perfectly that Hayward emerged from the ashes of the California recession garnering lumber market shares ranging from 60 to 80 percent from market to market. But it wasn't all about the dollar signs. With Bill Hayward's ascension to the president's chair in 1993 following a brief illness of his father Homer, the company also has used the past decade to direct itself to a mission of sustainability and create an economic model that benefits the stakeholders of today—customers, vendors, employees, and the public—without jeopardizing the prosperity and profitability of the stakeholders of tomorrow. According to Bill Hayward, the key to unlocking the sustainability side of that business model relies on profitability and corporate health as much as on environmental awareness, and he believes that fact can help to sell sustainability to the construction industry and in other types of businesses.