Far left: Peter Ganahl, president of Ganahl Lumber. Top middle: Peter inspects lumber with Jim Taft (center), manager of Ganahl's headquarters yard in Anaheim, Calif., and John Ganahl (right), CFO. Bottom middle: Four Ganahl family members–(left to right) Mark, manager of the Corona branch; Pete, an outside salesman; John; and Peter–ride bikes around the 20-acre Anaheim yard. Photos: Tim Rue / www.timrue.com We all know that construction supply companies aren't all alike and that there are important differences between LBM companies in how they are organized, which market segments they target, the ways their goods are handled, and how much money they make. But how different are the people running those yards? Can they becategorized as easily as their companies, or is one rose of a CEO pretty much like another? Could the CEO of a small operation step in and run a giant company? What about vice versa?

Seeking answers to those questions, ProSales spent a day apiece with the heads of three construction supply companies of vastly different sizes operating thousands of miles apart. Our conclusion: Their operating styles do vary markedly, but not in the ways that stereotypes would lead you to think.

Peter Ganahl

As efficient as a CT scan, Peter Ganahl was picking up all sorts of readings from the job candidate sitting a few feet away.

Tell me about the person who grew the most at your last job, Ganahl Lumber's president asked the prospective facility manager. What leadership skills did that person lack? What role did you play in developing his skills?

Peter nodded regularly and paid lots of attention as the candidate–obviously comfortable with the interviewer–spoke freely about his achievements. But while seemingly passive, Peter wasn't a pushover; he probed when he heard vague responses or detected something between the lines on the man's resumé. At another point, not long after hearing the candidate recite more successes at his last job, Peter asked with a smile: "How did you get so lucky to pick all the things that worked?"

All told, Peter spent close to an hour that day with the would-be facility boss, another hour with an internal candidate for a branch management position, and a third hour conferring with a senior executive on the two open jobs. It also was a day that saw Peter drive to personally welcome the Buena Park branch's new manager, stop by the desk of a salesman to acknowledge his 25th anniversary with the company, and grab lunch with his two sons. In many ways, Peter Ganahl isn't in the lumber business so much as he's in the people business.

Peter with his two sons on the job, Pete and Mark. Photo: Tim Rue / www.timrue.com "When it comes to running this company," he says, "I'm an adviser."

Simple Gifts

Since its founding in 1884, Ganahl Lumber has grown to nine locations in Orange County, Calif. (eight of them sales facilities), 800 employees, and $291.5 million in sales. Ganahl is in the minority among ProSales 100 members because it doesn't offer installed sales or construction services. Rather it focuses on, as its motto suggests, "Doing the ordinary things extraordinarily well."

When employees ask Peter what it takes to be a leader in such an operation, he gives them an eight-page collection of notes, citations, and newspaper clippings devoted to the subject. One is 20 years old and comes from management legend Peter Drucker. Another was penned 500 years ago by that Renaissance-era management adviser, Niccolò Machiavelli. Peter Ganahl's own thoughts are only a decade old but just as timeless.

"Leadership is a form of service ... a commitment to your people," he wrote. "Leaders must have a vision of where they are going. Leaders articulate their visions. They make their mission known and get people to follow."

Also: "Commitments will be kept regardless of their cost to us in money, overtime or inconvenience. We say what we do and we do what we say."

And: "The customer is KING. It is management's job to serve those who serve the customer. How our customers are treated will be derived from how the leaders of our company treat the people inside the company."

Culture Club

The qualities implicit in these ideals color all the management and team-building actions that Peter takes. During one branch manager interview, Peter told the candidate that he had had three people in mind for the job but eventually dropped one "because I'd rather he get more Ganahl culture."

"One of my goals is always to be a small company–not small in numbers or revenue, but in feel," Peter says. He believes he can recognize at least half his workers on sight, and the company's 10-page telephone directory still is alphabetized by staffers' first names. One-third of the workforce has been on staff at least 10 years.

Such loyalty doesn't come through low expectations, though. The yards are kept immaculate. Branch managers are compared against each other as well as against their own past performance. Sales staff (Ganahl ranked eighth on the ProSales 100 list of sales per outside salesperson) are judged by how well they deal with four different grades of customers.

Peter demands as much or more from himself. Trim and energetic, he starts his work day at home at 6 a.m. by reading e-mails and going through news reports, and he typically doesn't finish work until 6:30 p.m. He regularly examines and occasionally updates a list titled "I would be more effective if..." Goals currently on that list include being more diligent, spending more time with the sales staff, writing articles in the employee newsletter emphasizing certain parts of the company culture, and practicing his Spanish.

Future Plans

Another task involves planning his own succession. Two of the leading candidates to succeed Peter when he retires are his two sons. One, Pete, is the most successful commissioned salesman in company history. The other, Mark, has been general manager of Ganahl's operation in Corona, Calif., since 2001. Peter is getting both ready through leadership training.

The next transition will be quite different than the last one. Peter took over the company in 1973 when he was just 27 years old and only five years removed from his forestry studies at Oregon State University. In those days the Ganahl family owned the whole company, but in 1976 an Employee Stock Ownership Plan (ESOP) was formed. Now the ESOP owns 30% of the company's shares. Even though the Ganahl family and a few executives hold the other 70% and thus have no problem controlling the company, Peter speaks regularly about the fiduciary duty he feels running Ganahl for the benefit of all.

"Look at the work environment you provide," Peter's leadership pamphlet says. "See if it meets these standards: Is it safe? Is it comfortable? Does it inspire?"

–Craig Webb