Speaker Name: Robert Niblock
Speaker Title: Chairman and CEO
Speaker Company: Lowe's Companies, Inc.
Lowe's Companies, Inc. Website
Good afternoon and thanks for inviting me to speak with you today.
Hopefully most of you are familiar with Lowe's, but let me start with a brief overview. Lowe's is a 61-year-old company. And no, I've not been with Lowe's for 61 years. I just look like I have!
Lowe's began operations in North Wilkesboro, NC with a significant focus on new home construction and the housing boom that was taking place after World War 11. In the late '80s we changed our vision and our format, moving from small stores with lumber yards focused on building products, to a big box retailer focused on Do-it-Yourself and Commercial Business customers.
The prototypical store we build today has 117,000 square feet of net selling space plus a 32,000-square-foot garden center, and typically sits on 14 to 15 acres of land. Our average store costs approximately $19 million dollars and has annual sales volume of approximately $38 million dollars. Each store has approximately $5 million in inventory.
In total, Lowe's is a $50 billion retailer with over 1,400 locations in 49 states. To put this in context, to achieve $50 billion in sales we must average $137 million dollars per day in sales.I mentioned that we're in 49 states. The remaining state is Vermont and we're currently under construction and expect to open our first Vermont store later this year.
We employ over 200,000 people and process over 750 million customer transactions per year. We're currently opening approximately 150 stores per year, which combined with our distribution network expansion and other capital investments, results in an annual capital budget of over $4 Billion. And in December of this year we'll become an international retailer as we open stores in Toronto, Canada. We'll continue our international expansion in 2009 when we open stores in Monterrey, Mexico.
Hopefully that overview provides you with an understanding of the breadth of Lowe's operations.
As many of you contemplate your careers and the challenges of leadership, I thought you might be interested in hearing:
- my thoughts on leadership
- what's worked for me during my career
- a few lessons learned along the way
- and some challenges CEOs are facing.
Before I delve into thoughts on leadership, I'll provide a brief overview of my background.
As a child, I grew up in a very conservative but supportive family environment. Looking back on our lifestyle and income level, we were definitely on the lower end of the socioeconomic scale. In other words, if it weren't for families like ours there wouldn't be an upper class in America. But because of a great family environment and friends who were similarly situated, I never felt underprivileged.
However, being raised in an environment where every expense was tightly budgeted shaped my values. Don't get me wrong. I enjoy a very comfortable lifestyle, but not an extravagant one. So lesson number one - don't lose your sense of value. We all ate macaroni & cheese and cold pizza in college. Sometimes I still do! Twenty-four years ago, I was in your position - young, ambitious and looking forward to graduating and making a difference in the business world. I worked hard and studied hard during college and, given that I was performing near the top of my class, I was certain that I had a lot to teach the world. Once I entered the business world I quickly discovered how much more I had to learn!
Lesson number two - the learning process never stops. You may graduate at the top of your class but you're entering a work place that is changing at a rapid pace. After graduating from college, I spent nine years with Ernst & Young initially in audit and then in the tax area. As a staff accountant I sometimes felt like I spent more time making coffee, picking up donuts and moving work papers than I did performing audit procedures. But whether I was making coffee or auditing bank reconciliations I was paid the same salary. I never complained about the tasks I was asked to do. I maintained a great attitude and considered myself a vital part of the team. After all, it's a lot easier to go to work on Saturday or Sunday morning knowing that you have hot coffee and fresh donuts waiting.
As a staff accountant I worked hard, and I began to advance with the firm. Public accounting was a great training ground and a great place to start a career. I was working with young, bright professionals who had similar interests and I was getting great experience. It was a demanding schedule with significant overtime and weekend hours, but I enjoyed it and I was advancing in the firm.
Lesson number three, to be successful there will generally be sacrifices.
- Most of us aren't born with a silver spoon in our mouth.
- Whether you're an athlete or a successful business person, there will generally be trade offs and sacrifices along the way.
- Keep in mind, there are only so many Paris Hiltons in the world.
I left E&Y to accept a position as Director of Tax at Lowe's. And I quickly discovered how little I knew about the various tax issues large retailers face in the numerous jurisdictions where they do business.
Lesson number four - when you join a new organization, you never know exactly what you're getting into. Do your homework and learn as much as possible, but in the end it's still somewhat of a leap of faith! Twelve years after joining Lowe's as the Director of Tax, I became Chairman and CEO, which is probably not a typical career progression. I held a number of different positions along the way to becoming CEO including:
- VP & Treasurer
- SVP of Finance
- CFO
- and President
I accepted every responsibility and new position that Lowe's asked me to do.
I've been with Lowe's for nearly 15 years and, if I had to pick a defining moment or decision in my career at Lowe's that had the biggest impact, it would be in 1997. I was VP & Treasurer and accepted the additional responsibility to head up Lowe's Investor Relations function. The company asked me to do it and I accepted.
After accepting the position, my boss (the CFO) immediately notified me that he had commissioned a survey of Wall Street analysts and handed me a notebook which detailed what Wall Street thought was wrong with Lowe's IR function. My job was to fix this and I was also told that I was not getting a raise for taking on the added responsibilities. I didn't like it, but I didn't let it deter me either. Keep in mind, I had no formal IR training or prior experience.
Shortly after accepting the position I was participating in Wall Street conferences with Lowe's management "telling the Lowe's story." If anyone was ever thrown to the wolves, I was, when I accepted the IR position. Not only did I lack specific IR experience, like most Americans, I was horrified of public speaking. But other than lack of experience, a fear of public speaking, and no additional compensation, things were looking pretty good.
Even though I lacked specific IR experience, I believed that my knowledge, skills, ambition, and business experience would serve me well as I pursued this new challenge. In addition, I was surrounded with a great team and great mentors who quickly taught me how to be effective with Wall Street. And I was getting great exposure to Lowe's executive management who observed how I was performing. With each presentation I gradually became more comfortable with public speaking. So, lesson number four - don't be afraid to accept new challenges even if it moves you out of your comfort zone. As long as you have the fundamental knowledge and skills necessary to succeed.
In other words - with my experience and skill set, it made sense to consider a position in Investor Relations. It wouldn't have made sense for me to accept an engineer position on the space shuttle program.
Often times, people ask me, "When you started at Lowe's did you ever envision that you would be CEO?" The short answer is "No." The long answer? Absolutely Not! I firmly believe that if I had joined Lowe's with the expectation of being CEO it probably would not have occurred. Why? If I had arrived at Lowe's as Director of Tax and spent my time trying to become CEO, I wouldn't have given adequate time and attention to the job I was hired to do. I firmly believe that the best way to advance in an organization is by doing a great job at the responsibilities you're hired to do.
Don't get me wrong. You should be ambitious. You should be a dreamer. But don't get out of balance to the point that you're not adequately performing your primary job responsibilities. So, as you think about embarking on your professional career, I'll share a few thoughts - 10 to be exact - on things that have worked for me.
First, find something you enjoy. Life's too short and if you're not happy you won't perform to your potential.
Second, recognize that reward and advancement don't usually occur without sacrifice, so be prepared to give 110% if you expect to advance.
Third, take on new roles and responsibilities, even if it makes you a little uncomfortable. In other words - embrace change.
Fourth, learn to accept constructive feedback. As I said earlier, there are a lot of smart people in the world. But keep in mind these are business issues, not personal issues, we're dealing with. Seek advice and feedback to help you grow and succeed.
Fifth, learn to overcome adversity and defeat. It happens to everyone. I don't know any successful leaders who haven't had to deal with adversity. When I made my "cold call" to Lowe's to indicate my interest in the Director of Tax position, I was told "point blank" that I was not qualified for the job. However, I was persuasive enough to get an interview and a couple days later, I was offered the job.
Sixth, worry about what matters and let the other issues go. In business as in life, there will be inequities. Some are worth fighting for, others aren't. Pick your battles carefully or you'll spend your life trying to overcome things that won't matter in the end.
Seventh, Work-Life Balance is important and it's different for everyone. You have to determine what works for you. My Work-Life Balance probably would not work for most people, but it works for me. Remember it's Work-Life Balance not Life-Life Balance.
Number eight, don't take problems home from work. Note, I didn't say "don't take work home"! There is a difference. I take work home every night. However I don't burden my family with the daily issues that I encounter at work. This makes family time much more enjoyable.
Number nine, develop a comfort level with public speaking. Whether you're presenting a business plan to co-workers or strategies to Wall Street, you'll perform better and your message will be more effective if you're comfortable speaking to an audience.
Finally, being in the right place at the right time helps. As I look back across my career, I'm certain that a little luck accompanied the effort I put forth.
I'll wrap up with a few additional thoughts on leadership. As you advance into roles of greater responsibility it will be important to hone your leadership skills.
First of all, keep in mind that leadership comes from within. Your employer can give you a job and a title, but they cannot make you a leader. I believe that success occurs when great leaders surround themselves with great people and create an environment that fosters great execution. Leadership doesn't just happen. You have to decide you want to be a leader.
So now that you've decided that you're going to be a leader. I'll share six traits that I think all great leaders possess.
First is, understand what drives your business and make it your number one priority. For example, retail concepts don't exist without customers. So retail leaders always put customers and customer service first. If you understand the details of your business and can relate to the challenges that employees face across all levels, you'll make better decisions.
Second, Teamwork. To be successful, you must surround yourself with great people and work as a team. At Lowe's we like to say "none of us is as good as all of us". In building a team, be aware of your own strengths & weaknesses and be sure to complement your abilities. Once you've surrounded yourself with a great team, celebrate and recognize your teams successes. In life as in sports, people love being on a winning team. Why? Because winning never gets old and there is nothing more motivating than beating the competition!
Third is Attitude. As a leader all eyes are on you. You set the tone for the team. Keep in mind organizations take on the characteristics of their leaders. If you have a winning attitude, your team will have a winning attitude.
Fourth is Passion. To be successful you your team have to be passionate about your purpose. If you're not passionate about what you're doing, find something else to do.
Fifth is Respect. Respect is required to become a successful leader. As you progress to positions of greater responsibility this becomes more difficult but more important. Why? Because more people are watching. If you have the trust and respect of your team, they will understand and support your decisions, including the tough ones. Remember, respect is earned not granted! To earn respect:
- Treat others fairly and consistently.
- Show that you care about their future and their development.
- Follow through on your commitments.
- and display honesty and integrity.
Which leads me to number six, which is Integrity. Integrity and ethical behavior have always been important for business leaders. But with today's avalanche of accounting scandals and ethical breaches. It's more important than ever. I don't think you can legislate integrity and ethics. Those come from within.
Yes, enhanced legislation will help punish fraudulent activity and deter certain behaviors. But it doesn't necessarily lead to ethical behavior. Are you doing what is ethically correct? Or are you seeing how much you can get away with? Think about it. There is a difference.
Most of the scandals you read about are not the result of honest mistakes or a CEO who was too far removed from the business. Most of them result from business leaders who failed to differentiate appropriate from inappropriate actions. In other words - key values of ethics and integrity were breached. In some situations these individuals assumed they were entitled to utilize corporate assets as personal assets. Other cases involved aggressive account tactics designed to achieve quarterly earnings estimates.
But in all cases the common theme was poor judgment. And in the end all of us will suffer from the transgressions of a few as we face more scrutiny and regulations, which diverts attention from managing the businesses we're entrusted to run.
Don't get me wrong. I believe the overwhelming majority of CEOs are great business leaders who display the values I've discussed and conduct themselves in an appropriate manner. But because of a few high profile cases involving inappropriate actions, the next decade will be challenging for CEOs as we face additional scrutiny and governance.
Over time I hope the negative public image of corporate America will moderate and we can return a higher level of dignity to CEOs and business leaders. As you embark on your careers and become the leaders of tomorrow, hopefully some of the thoughts I've shared today will help you conduct yourself in a manner that improves the image of corporate America in the future.
Once again, I appreciate you inviting me to speak with you today. I hope you've found my comments useful and I wish each of you great success and prosperity.