Companies that recruit and hire the most talented employees will naturally wind up with a workforce that’s diverse in every way – including age. Bridging the gap between generations is one of the challenges to creating a cohesive, dedicated work culture.
In nearly 20 years with Specialty Building Products (SBP), Jeff McLendon has served as CFO, President and COO, and now he leads the business as CEO. SBP has earned a reputation as a great place to work for employees of all kinds, regardless of their ages: Boomers, Generations X and Z and Millennials; they all feel at home and work together effectively under McLendon’s leadership.
McLendon and his executive team are dedicated to building the next generation of leaders and using their industry influence to impact the lives of the people around them. In this interview on the Wholesale Change Show, McLendon talks about building culture, the importance of connecting with employees on a personal level and how happy, purpose-driven employees are the foundation of company growth and success.
Distribution Strategy Group: Will you start by telling us about Specialty Building Products and your time with the company?
Jeff McLendon: I’ve been here for almost 20 years. The platform company is U.S. Lumber. In the last five years or so, we’ve made a lot of acquisitions and decided that branding all of them “U.S. Lumber” wouldn’t make sense for several reasons. So, instead, we integrated them under the umbrella name of Specialty Building Products.
I met the founder of U.S. Lumber more than 20 years ago in Atlanta. We were in a business group together. The founder, Lawrence Newton, had grown an entrepreneurial and successful business, but he felt stuck.
So when we met, I was looking to do something longer-term than technology, which was the industry I was in at the time, and Lawrence wanted to move his family home to Alabama. So, I came in, and kind of succeeded Lawrence in the business, although he’s still actively engaged and involved.
DSG: You’re known for your ability to build a strong culture across generations. Can you talk about your philosophy and how you unite teams regardless of age?
McLendon: Culture is the most important thing we work on at SBP. When people ask me, “What causes you to lose sleep?” or “What are you worried about?” I always say culture. If you lose control of your culture, you lose motivation and good people.
Culture’s not something you can actually work on – it’s an outcome. Think of it like earnings. You don’t work on earnings; you work on the things that lead to earnings. Building culture is like that.
I think culture is made up of three things: what you value, how you’ve agreed to play together and who you allow to stay. If you get all of those things right, everything else will work itself out.
DSG: Tell us a little more about those three concepts: what you value, how you play together and who you allow to stay.
McLendon: So, having consistent values you believe in sets an organization’s moral and purpose tone. For instance, one of our core values is “Give credit where credit is due, most of the credit is not due to you”. If you’ve got someone who wants to make sure that they get credit for everything or have a spotlight on them, that violates a cultural rule, and it’s pretty easy to address.
Another of our values, which is closer to our purpose, is that we want to “Use our influence to make a uniquely positive difference in the lives of the people we touch”—that kind of captures the purpose statement of the company. So the reason I, and the rest of our senior teams, do what we’re doing and focus on growing a successful business is that that gives us a platform of influence that we can use to make a difference in the lives of the people we touch.
That’s a value statement that has a lot of purpose behind it. Growing your earnings, income and position are all important, but those things don’t have any value in and of themselves. The real value is how you use that influence to make a difference. Values like the two I just described are things the human heart will rally around. It’s attractive to people. People want to be about something bigger than themselves – bigger than the dollar. That starts with core values.
The next thing is agreeing on how you play together. I think that’s an underestimated aspect of running a business. When I think about my biggest job, it’s making sure we have the right people on the right strategy and that we’re playing well together. As we’ve grown, we’ve done better at articulating the expectations around how we play together.
For instance, we say that when you interact with someone, communicate in person whenever you can. Use a phone call if you can’t meet someone in person, and only use email as a last resort. It’s fine if someone wants to send me a meeting agenda or financial report via email, but if somebody tries to start a conversation with me that way, I won’t respond. None of our leaders will. Instead, we will walk into the person’s office or pick up the phone. That’s a rule about how we play together.
When leaders feel passionate about something, and everybody understands the rules of the road, that creates a coherent culture.
Then, once you have agreed upon values and know how you will play together, it’s the leadership’s responsibility to decide who gets to stay. If you say, “You’ve got to play like that. You’ve got to live like that. You’ve got to believe like that to stay,” then the culture becomes self-perpetuating. When you develop a strong culture, it will expel things that don’t fit.
DSG: How do your beliefs on culture affect your business and acquisition strategies?
McLendon: It definitely makes things more complicated. For instance, when we’re working on an acquisition target, we have to feel like it’s fundamentally culturally compatible, or we won’t move forward.
We’ve learned two big things: One was obvious, and one wasn’t as obvious. The obvious thing we learned is that you have to build trust – trust comes before change. We’re not going to show up after acquiring a new business and give them a playbook and say, “Here’s how you do things because you’re a part of SBP now.”
Before anything, you have to build a relationship and figure out who’s who and what they care about. We’re obviously trying to figure out the core business stuff, like the value proposition and how teams interact with their customers, but that’s not the real stuff. The real stuff is the people on the other end being heard, known and fully seen, and us building trust. Then, we can start talking about change and how we’re going to grow the business faster.
The second thing we learned, which is something we’ve gotten better at, is that if something doesn’t fit from a cultural standpoint, we’ve got to deal with it fast. This is especially important if you have a leader or person who is self-serving or a bully.
If you’ve got someone in your environment who doesn’t fit, especially if they’re in a leadership position, and you won’t deal with it, then you’ve lost all your credibility. This becomes really complex in the real world, but you’ve just got to deal with it and not be scared of it.
DSG: I’ve always believed that influence is earned and power is granted. You don’t necessarily trust someone because they’ve been given authority over you. Instead, the influence they’ve earned by creating trust among the people in their organization enables them to drive change.
McLendon: That’s right. When you think about bigger organizational things, most of our leaders aren’t motivated by mathematical outcomes. This is true whether it’s earnings growth or, frankly, even compensation. People want to be compensated fairly and want to be rewarded for what they do, but real motivation is deeper.
At SBP, we have a purpose behind what we’re doing. Our motivations are aligned, and we’re committed to the same things. If you can tap into those deep motivations, then you’ve got something you can drop strategies into and get predictable results. We have plenty of things to deal with as a business but ensuring our people’s hearts and minds are aligned is the ultimate key.
There are a lot of generational differences to consider when you’re getting everyone aligned. In particular, our younger employees (the Millennials and Gen Zers) want an authentic relationship in a way that my generation didn’t. So whereas a Gen Xer or a 57-year-old is hoping I don’t drop in (because only bad things can happen if the boss shows up), a 24-year-old is hoping I will stop by. They want to know me.
DSG: We’ll often hear the question, “What do you put first, the shareholder, employee or customer’s interest?” The answer is all of the above. Happy employees lead to happy customers, which results in happy shareholders. How has your focus on culture impacted your business?
McLendon: The degree to which we see the impact externally is surprising to me. Our customers can see the difference. They say, “Hey, there’s something different about that crew. There’s something different here.” Sometimes people can articulate it, and sometimes they can’t, but I’ll tell you this – we’re about something bigger, something intentionally personal and human.
Our platform is building materials distribution, that’s what we do, and it’s really important. We have been serving our customers well, serving our suppliers well and growing earnings, so investors are attracted to our business. That’s all really important; it grows our platform, but in the end, what’s more important is how we’re touching people.
I mean, I’ve played ultimate frisbee with employees until 1 a.m. and had a bunch of laughs. So I’m investing time with them. They’re surprised that the COO and the CEO would take that time to play with them, but now, they’ll listen to what we have to say. We’ve got a chance to make a difference in their lives and define how they lead later when they become leaders here themselves. That’s where we’re finding purpose.
We’ve talked mostly about people, but defining the business and what it does and finding our voice on the business side has been an interesting journey. There’s a divisive narrative in the media and our culture that companies are choosing profits over people.
People have hopes and dreams for their careers and earnings; what’s really important to SBP is the difference we’re making in people’s lives. So we make everything work together by growing the earnings of the business, which makes us stronger and safer in the marketplace and gives us a more strategic position. It attracts investment. As we grow the business, we create opportunities for the people who work here and who don’t work here yet.
So these concepts aren’t working against each other – they’re working for each other.
Watch our full interview with Jeff McLendon:
Ian Heller is the Founder and Chief Strategist for Distribution Strategy Group. He has more than 30 years of experience executing marketing and e-business strategy in the wholesale distribution industry, starting as a truck unloader at a Grainger branch while in college. He’s since held executive roles at GE Capital, Corporate Express, Newark Electronics and HD Supply. Ian has written and spoken extensively on the impact of digital disruption on distributors, and would love to start that conversation with you, your team or group. Reach out today at email@example.com.