Craig Webb Photo: James Kegley This is budgeting season for LBM dealers, and by now it's clear that next year's plans should avoid any expectation that home building will recover before October 2008. Between now and then, tough times will require tough decisions. "We're about to see," one veteran observer told me, "which dealers really have the means to survive and which that we thought had money are going to have to sell."

This month's cover story seeks to help assure you'll be among the survivors by bringing you advice from many of our industry's leading consultants. These experts concentrate on external stuff, like watching your inventories and analyzing your revenue reports. But I also suggest you do this: Stop being the "big man."

That's a real term, used by anthropologists when they discuss tribal cultures. In such groups, the big man–often the descendent of previous big men–isn't just a community leader but also a major bringer of wealth into the tribe. He is expected to share his success with the group, and when someone in the tribe has problems, he feels a responsibility to go to the rescue.

Experts saw the big-man philosophy at work when African members of the International Olympic Committee took bribes from organizers of the Salt Lake City Winter Olympics in the form of scholarships and jobs for fellow tribesmen. These truly big men were supporting entire villages.

But such behavior isn't restricted to tribal chiefs. I've heard numerous stories of lumberyards, usually in small towns, with swollen payrolls. Sometimes the extra weight is a relative, sometimes it's a neighbor who's fallen on hard times. More than once, you'll find the worker is a deadbeat.

Why employ such folks? Ask the executive who writes the checks, and you will hear the kinds of phrases a big man would say. Like: "This town (or family, or business) depends on me." Or: "If I fired that person, everyone in town would know." And: "What would happen to that person's family?"

While you don't hear the big-man term bandied about lumberyards, you will hear a lot of executives tell you they run a family business. Usually this means they don't operate it like a public corporation with a fixation on quarterly profits, or as a billion-dollar LBM would with personnel decisions made far away and the baLane sheet ruling over all. That's reasonable; the family is mankind's oldest operating unit, after all.

This system has worked so long as the company stayed modestly sized and serious competitors remained far away. Family quirks and inefficiencies could be tolerated because enough money was rolling in to cover up potential problems. But then in came the big boxes and out went a lot of retail customers. Lumberyards that couldn't adapt shriveled and died.

Today, it's fair to say the survivors are more focused and better run than ever before, but that doesn't mean they have the skills or mind-set to survive tomorrow's challenges–or even get through today's slump. Operations run by big men are particularly at risk, but I'm guessing that even practitioners of the family model of doing business are going to be tested.

Robert Lane, CEO of Deere & Co., has changed his company's philosophy as it strives to build the iconic John Deere farm equipment amid pressures from foreign competitors and unions. "For years, we talked about Deere as a family," Lane told The Wall Street Journal. "The fact is we are not a family. What we are is a high-performance team. If someone is not pulling their weight, you're not on the high-performance team anymore."

Such talk might strike some of you as cruel, but perhaps Lane is just being realistic. Companies like Deere routinely were the big men of their towns, providing hospitals and housing and a wealth of other services along with jobs. The big men of LBM might have operated on a smaller scale, but their style was the same.

These days, that philosophy might still work if you lead a tribe, but not if you run an LBM dealership.

Craig Webb, Editor 202.736.3307
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