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Salvage man Hendricks held on, and on

by on
in Profiles in Leadership

He seemed like such a regular guy that, at first, it’s difficult to understand how Ken Hendricks rose from nothing to become richer than Croesus (or Oprah, in today’s dollars), with personal wealth estimated at $2.6 billion.

The principles of his success don’t explain it, either, because they were gigantic: Create jobs; eliminate waste; preserve value.

But a close reading of Hendricks’ story yields clues to his leadership. Besides operating ABC Supply, the nation’s largest wholesale distributor of roofing, siding and gutters, Hendricks bought and started companies pretty much nonstop, and took on Beloit, Wis., as his personal home-improvement project, gradually restoring 3,500 jobs dumped by the town’s major employer.

A few insights about Hendricks, who passed away in 2007:
  • He offered a square deal. “My whole life is about trying to treat the working man fairly and give him a good opportunity,” Hendricks said. “If you’ve got a job, you have pride.”

  • He saw opportunity everywhere. When he was shopping for acquisitions, Hendricks never assumed that the seller was telling the whole story. So, he sought it out.

    “Walk in the back room,” Hendricks advised, “and talk to the warehouse guy or the forklift operator and say: ‘If you were running this business, what would you do differently?’ I guarantee if you fixed what they tell you, 95 percent of the time, that would be a successful business.”

  • He hated throwing anything away—especially people. Hendricks let nothing go to waste, even industrial molds. He started out by streamlining the roofing industry’s patchy, wasteful supply chain.

    Later, besides restoring jobs, Hendricks invested 0.5 percent of sales in training and development, and devoted 51 percent of the after-tax net income to bonuses. About half his managers started out as roof loaders, warehousemen or drivers.
That’s the short version of Hendricks’ story. Even more to the point, you can take his advice: Trust your gut, learn from your people and don’t throw anything away.

—Adapted from “Create Jobs, Eliminate Waste, Preserve Value,” Leigh Buchanan, Inc.

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