Tim Baucom is succeeding Vance Bell as CEO of Shaw Industries on April 5. We had the opportunity to sit down in person with these two leaders at their headquarters in Dalton, Georgia, to discuss the state of business and their outlook for this year.
Q. What’s the state of flooring right now?
Baucom: I think one of the biggest challenges— in a good way—is the residential businesses is really strong and will be really strong for the next couple of years. We're dealing with some short-term hyperinflation; flexed muscles we haven't had to exercise for a while, and it's sort of the perfect storm—no pun intended—because the Houston storm demand is surging for raw materials. It’s surge in the inflationary pressure that’s not on the commercial side, and we are starting to see some green shoots come up. Certainly, education and healthcare are still pretty robust because people are having to adjust to the impacts of COVID-19. But I think designers have concepts and ideas—they just haven't been able to come together yet to idealize them. I think the worst is over. So, I think we'll get back to ‘19 by next year.
Bell: There has been such a surge and a tremendous inventory rebuild. If you look at a lot of mass retailers—whether it be the Walmarts and home centers, the large retailers—and it really filters down to even smaller specialty stores—there were certainly some stoppages in second quarter of 2020. And then all of a sudden, the residential building product sector came surging back in the fall and has continued to surge. A lot of those inventories at retail were low. You’ve got not only a true surge in demand like we hardly ever seen, you're coming from a very low inventory base at retail. So, the retailer is trying to build their inventories, buy and get prepared for this continued wave of demand.
There's a lot of inflation coming through the economy, and, ultimately, all or most of that will end up being passed onto the consumer. To me, the central question over the next 12 months, 18 months, is what impact will all that inflation have been passed on to the consumer? What will that do to the economy and business?
Q. How has the pandemic changed your business going forward?
Bell: One of the great things that we've found is that in a virtual world, you can connect with not just the owner, but the RSA. Being connected all the way through and telling those stories.
Q. Has it changed your approach to product innovation and roll outs?
Baucom: A lot of what our research says is that consumers love our products, but they get overwhelmed because of how much variety there is. A great example is LVT. There is a reason for WPC and SPC. They each have a reason. I think that we need to help the consumer understand, as we create more variety, how they fit what's best for their circumstance. Sometimes we get so technical because we're proud of the accomplishments and the innovation, but we’e got to understand what part of that is empowering to the consumer and keep it from being overwhelming
Bell: For the customer, for the dealers, it is very confusing. People bring out all of their annual introductions in that time period of January, February. You just cram so much through the system that a lot of people get confused and a lot of things get left behind. We’re going to take the approach where we're going to stagger it more through the year and not overwhelm customers with so many introductions.
Q. Looking ahead, what advice do you give to future leaders who are planning their careers post pandemic?
Bell: The first thing they have to find is their passion so that they can become truly invested. We tell people that if this is not your passion, if this is not a good fit, if you can't abide by our values, it’s probably best that we part ways. So find your passion, build relationships—laterally and vertically—so that you have influence and people know who you are. You get a better understanding of other people's roles and how the company works together. Take opportunities when there's an opportunity to go into another assignment, or take a new role—get out of your comfort zone. Take some risks in terms of your career when that opportunity shows itself within the company so that you build that broader portfolio of experience.
Q. What makes a good leader?
Bell: Leadership is a blend of different characteristics. A main characteristic of leadership is humility. And the humility is that it's not just about you, it's about the team, it's about others, it's about the enterprise. Humility provides what I call—and I think is another important characteristic—emotional steadiness. You can't get way too excited because people need to know that if they bring you a problem, or they bring you a bad situation, you're not going to shoot the messenger.
I think you have to have tremendous amount of curiosity as a leader. And even with that emotional steadiness, you also have to have a high level of impatience. You're gonna hear them, you're gonna assess it. And then you're going to rationally decide what's the best approach to fix that. That emotional steadiness of going through downturns, upturns, great business, bad business, bad situations—they need to know the leader is steady and calm and will work with them.
Q. Can you talk more about impatience?
Bell: Speed is one of the most important assets for a company. That's speed of action and hitting due dates and finishing projects on time. You don't have a good business unless you can do those things.
Q. Tim, what are your priorities in the first 90 or 180 days as CEO?
Baucom: We have tremendous momentum as a company. Because of inclusion and the kind of leadership I've been at the table with as we formed all the different priorities—as I've told some people internally—if I had a different strategic direction, we'd already be debating it and doing it. It is really just passionately execute, which we're doing. Now is the time for reemphasis. One of the things I'm always passionate about is to really make sure the customer is at the center of everything we do. You've got to make sure that you're constantly letting people come in to say is the consumer still where you and the customer where you thought they were when you started the project? Because sometimes those can shift a little.