The toughness meter
“There are no sissies left in this business.”
That’s the official Home Channel News quote of the month, from Rick Frost, the CEO of Nashville, Tenn.-based Louisiana-Pacific.
Frost’s statement, delivered during the Q&A segment of his company’s fourth-quarter earnings call, was one of several executive comments in recent weeks with a true-grit flavor. Something about managing through the tail end of a stubborn downturn has generated a tough-get-going attitude in public and other utterances of our industry executives. In other words, it was a strong month for straight talk.
When Builders FirstSource CFO Chad Crow described something of a return to normalcy in margins in certain markets, he packaged his point in the rhetoric of dog-eat-dog Darwinism. “You don’t have as many starving people out there fighting over what small amount of business is available.”
Anyone who buys stock knows that past performance is not an indication of future performance. Ace Hardware executive VP and CFO Dorvin Lively said that theory applies to retail. “You have got to get better, get smarter, every year. What worked last year doesn’t necessarily mean it’s going to work this year. Whether it’s big-box competition, the Internet, social media — I mean these are things that we didn’t even have to think about 20 years ago.”
Times are changing. And the burning desire for constant improvement is also found in Orgill CEO Ron Beal’s sound bite. “It’s hard to hit home runs,” he said. “But if we can be 1% or 2% or 5% or 10% better, the cumulative impact of that is very significant.”
Even Berkshire Hathaway CEO Warren Buffett is fired up. In his annual letter to shareholders, Buffett wrote: “Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born.”
I wouldn’t want to mess with him in a boardroom. (For more on Berkshire Hathaway and its home-related business, see page 6.)
But it was Louisiana-Pacific’s Frost’s comment that takes the cake. The editors suspected it would generate some website hits, and sure enough, “LP CEO: No sissies left in business” was one of the most viewed stories of the month.
Frost was responding to a question from an analyst about why there was so little consolidation in the industry, given the conditions. Here’s his elaboration. “It’s over-simplistic and you’ve heard me say it and everybody laughs at me when I do, but there aren’t any sissies left in this business. Nobody wants to give up their shop and let somebody else own them. It’s my opinion.”
You might choose your words differently, but it’s hard to disagree.
— Ken Clark
Correction: An article in the February “Made in the USA” issue of Home Channel News incorrectly described Bemis Manufacturing CEO Peter Bemis. He is the grandson of the founder Albert Bemis.