A GREAT STORY FROM CRAIG WEBB AT PRO SALES. I ADDED A FEW LINES THAT ARE IN ITALICS.
How This Soccer Legend Relates to the ProSales 100 … and You
Keep Johan Cruyff’s advice in mind when you scan this year’s list, ProSales’ editor suggests
The fact that this month’s issue of ProSales is devoted to LBM’s giants–the soon-to-be-released 2016 version of ProSales 100–strikes me as an especially good time to enlist as a guest analyst Johan Cruyff, universally acknowledged as one of the five greatest soccer players of all time.
Unlike others atop that legends list, the recently departed Cruyff also was one of soccer’s best coaches. And he was one of the most quotable; this was a man whose head was as talented as his feet, and whose advice is asworthwhile in LBM as it was in soccer.
For instance, Cruyff believed that mastering soccer’s basic motor skills does little good unless you think about how to use those skills to maximum effect. “Technique is not being able to juggle a ball 1,000 times,” he said. “Anyone can do that by practicing. Then you can work in a circus. Technique is passing the ball with one touch, with the right speed, at the right foot of your teammate.”
That quote blends well with another that The New York Times liked so much it included it in Cruyff’s obituary in March: “Quality without results is pointless. Results without quality is boring.” I LOVE THIS LINE. QUALITY IS HOW WE TREAT OURSELVES AND OUR CUSTOMERS…AND RESULTS IS NET INCOME. WE MUST HAVE BOTH.
Keep those words in mind when you look through the 2016 edition of the ProSales 100 list. It shows that all the mega-mergers from last year—most notably Builders FirstSource with ProBuild, BMC with Stock, and Beacon Roofing with the Roofing Supply Group—mean the top 10 firms now account for 69.1% of the entire ProSales 100’s revenues (up from 61.3% in 2015) and 65% of all the facilities (up from 56%). Revenues for the top 10 rose 11.3% last year. For the other 90, it was 8%.
To the top 10, I say congratulations. You’re generating results, certainly on the top line and sometimes on the bottom line as well. But keep striving for quality, too. You have it within you to take LBM to the next level.
To those outside the top 10, be concerned but don’t despair. Big revenues are no guarantee of big profits, nor do they assure that the giant will win every time. As Cruyff put it: “Why shouldn’t you beat a richer club? I’ve never seen a bag of money score a goal.” The World Series champion Kansas City Royals can tell you what’s true in soccer applies to baseball. And in construction supply, I’ve seen a slew of companies with operations that don’t match big dealers in size but far exceed them in terms of generating results that profit their stores and their communities.
At the same time, I’m not going to subscribe to the small-is-beautiful mindset when I also see so many dealers struggle to generate even a 3% net profit. DREXEL IS JUST A HAIR ABOVE 3%… WE HAVE TO REMEMBER THAT NET INCOME IS KEY… BEING EFFICIENT (PAYROLL IS BY FAR OUR LARGEST COST, AND PRICE INTEGRITY IS OUR BEST OPPORTUNITY TO ENSURE A WORLD CLASS NET INCOME. WHEN WE SELL SPECIALTY PRODUCTS IT TAKES A LARGE TEAM, WHICH MEANS WE NEED TO HAVE MARGIN.) They might feel good about the quality they deliver, but Cruyff is right: Claiming you’re a high-quality operation might make you feel good when you see a big rival’s truck drive by, but without also producing results, you’re not really in the game.