Kevin Hancock, CEO of Hancock Lumber | Leadership & Americas Oldest Private Company

Welcome to the success story podcast, I'm your host, Scott Clary. On this podcast, I have candid interviews with execs, celebrities, politicians, and other notable figures, all who have achieved success through both wins and losses, to learn more about their life, their ideas, and their insights. I sit down with leaders and mentors and unpack their story to help pass those lessons onto others through both experiences and tactical strategy for business professionals, entrepreneurs, and everyone in between, without further ado, another episode of the success story podcast. Before we start today's episode, a quick note from our sponsor, Enthrown, a fully comprehensive equity management platform. This is what they do. Business owners, are you looking to raise capital and unlock shareholder liquidity? Before hiring expensive consultants or brokers, you need to know about Enthrown. Private businesses use Enthrown to unlock liquidity without bloating costs. With Enthrown's equity management suite, you'll be able to create liquidity, engage with shareholders, and control your company's destiny, all in one secure platform. Get your free guide to liquidity, go to enthrown.com slash liquidity. That's enthrown.com slash liquidity. Thanks again for joining me. Today I am sitting down with Kevin Hancock, who is the CEO of Hancock Lumber. This is one of the oldest companies in America, and it is a six time recipient of the best places to work in main award. In 2010, at the peak of the National Housing and Mortgage Market Collapse, Kevin acquired a rare neurological voice disorder called Spasmodic dysphonia when his own voice became weakened. So he developed a new leadership style based on strengthening the voice of others, keeping mind he is dealing with running one of the largest privately owned companies in the US while going through this. He is now a champion of work culture where everyone leads and every voice is trusted respected and heard. His new book, The Seventh Power, One CEO's journey into the business of shared leadership, shares the philosophy, values and strategies, Hancock Lumber Company was embraced, has embraced on its journey towards becoming an employee center company where leadership responsibilities are broadly shared rather than just power coming down from the top. So I am really honored to be sitting down with the CEO of one of the largest and oldest privately owned company in the States. I am very excited to hear your story, your journey, some of the struggles that you have obviously had to go through and endured. But thank you very much. I appreciate it, Kevin. Scott, hello, thank you for having me. I'm happy to be with you today. No, it's my pleasure. It's my pleasure. So let's get right into it. This is a very short summary and it doesn't do you justice. So walk me through your story. What's the story of you and Hancock Lumber, the family story, your personal story. I'd love to hear it all. Sure. So our company began doing business in 1848. So before the first cannonball was fired in the American Civil War company was in business here in Maine and we've been doing business uninterrupted ever since and the company has been owned and cared for by the same family that entire time. So I'm part of the sixth generation of my family to work for the company. And today we're an integrated company. So we own Timberland and we grow trees and then we have some else that manufacture lumber that we ship all over the world and then it made a new hamster. We have a series of lumber yards that supply building materials to homeowners and contractors and there are approximately 550 people who work at the company who are part of the team. So to the story you mentioned in 2010 right at the peak of the housing and mortgage market collapse, I began to have trouble a bit of trouble speaking and it turned something I always take it for granted, never thought much about and got a lot of you know as a CEO really your tool is your voice and suddenly I couldn't really use mine very much. I've recovered a good bit since but at the time I would not have been able to do this with you know I it wouldn't have been possible. So I turned out I'd required a rare voice disorder called spaz modic dysphonia and in a hurry I had to figure out how to lead differently without really speaking a lot and when I started doing defensively, initially really triggered all the change that followed someone would come up to me at work with a question or a problem and I knew I wasn't going to be able to give much of an answer so I started saying things like, geez that is a good question. What do you think we should do about it? And this was not a management strategy at first it was just a voice protection tool designed to put the conversation right back on the other person but what really struck me Scott after doing this hundreds of times was that people actually already knew what to do. This is what really struck me they did not actually need as it turned out a management centric taught down solution to the problem they faced they actually already knew what to do what they really needed was the encouragement and the confidence and the safety to trust their own voice and take their own actions and lead the area of the business that they were working in. So that was actually the trigger that really got me thinking about the traditional leadership model of power to the center and the potential for a new model of distributing power and strengthening the voices of others and sharing leadership broadly. So I think that you it's funny how you accidentally stumbled into into one of the most effective ways to lead somebody or lead a team and it's not it's not a fun journey to go through this it must have been extremely stressful I'm just I guess you know I love to know more about how you how you recovered since then and and the steps you took even I just want to know more about this this whole story because that's there's a lot to it I think but um did you find that as as you as you were unfortunately hit with a condition that forced you to act and be a certain way as a leader what what were the impacts on the company as people were forced to come to their own decisions where they're tangible improvements like KPIs like what a culture what did you see come out of that yeah so good good question so I kind of stumbled on this idea and then really got serious about how a company would institutionalize a structure of dispersed power and shared leadership or everyone felt like they had a voice so we we went to work really resetting our core systems to be more inclusive and to create more space for dialogue essentially patience for process so that everyone could have an opportunity to participate in discussions around the most important choices the company was making and and we learned pretty quickly that the real key to making that work was to change that the purpose and nature of listening and I write about this in my book that that listening needs to be for understanding not judgment so when I was a younger manager as I reflect on my own career I think I spent a lot of time listening to people in the company to see if I was pleased with or agreed with their view and if I didn't I would then start speaking to try to correct or change or adjust their view but we've since taken a bit of a different approach and really kind of it breaks the idea that there aren't really very many wrong answers when someone says something they're just saying what they honestly feel are are experiencing at that moment in time so the big focus in summary was has been to try to create a work culture where everyone feels trusted respected valued and heard now the concern a lot of people might have with this as well what about systems and discipline and efficiency and best practices and all of those things what we found really I think is fundamental human common sense and that is that people are much more active support that which they've helped to create so in this period where we've tried to create space for all voices to lead our efficiencies improved dramatically our accuracy is improved dramatically our rework has gone down our productivity has gone up and the companies performance really took off I'll put it in perspective this way we ended up earning more money the company from 2010 to 2020 then we did for 1848 to 2009 so the time frame I am the time frame within which we we made this cultural shift to really focus on the employee experience chorus ended with a just a taking off of the companies of the companies performance but what I'm quick to say there is that improved performance in this kind of new model is really the outcome an important outcome of a higher calling it's not really the mission it's a result the mission is to try to create a workplace where the employees are having a meaningful valuable experience and one of the outcomes of doing that is the performance of the company is going to improve as a result now I have a I have a question and I would like to just do a little bit more on on how you are experienced dealing with this and and some of the struggles that you you dealt with within your family because if you are one of the oldest companies in the US you have done things a certain way quite literally for for for years like there's there this is like this is literally quite we've done this forever honestly so we've done things a certain way we're we've we've we've always led a certain way we've built our business a certain way incident happens you are no longer in you can no longer manage in the same capacity is what you were managing in before how does how does that family business dynamic that hundred plus year business dynamic impact you what what are you going through and how do you overcome that because if I was say I don't know I don't know the whole family situation you were leading when you had this issue and obviously somebody else in your family was leading before you I'm assuming what was the conversation not just maybe we should hire somebody maybe we should bring somebody in so how did you how did you sort of overcome that yeah those are great questions so I initially wondered if my voice condition was going to limit or even prevent my ability to keep doing my job that you know was uncertainty I phased and scared me but I laugh about that now I said to myself at the time what possible good could a CEO be who can't talk all the time and today I see that in a very different light so it definitely created some uncertainty and it took a good bit of you know courage in the way that all humans are called to face but the other party question that I think is really interesting is the whole question of entrepreneurship my favorite definition of an entrepreneur I forget who said it but the definition that I love is someone who create someone who takes a risk to create change so when you look at industry we always look at startups or new ventures as entrepreneurial in nature which they are but especially any company or organization that's going to survive generationally is constantly going to have to reinvent itself so one of the big challenges for a multi-generational company is exactly this point that you're getting at which is how do you respect your past and honor your traditions and yet constantly be being disruptive with your own with your own model I've worked for our company now for 30 years and we have changed in so many ways that had not changed I don't know that we would be here today so in my view every generation of a multi-generational institution has to be entrepreneurial by definition in order for that institution to continue to grow and be relevant that's a very good a very good takeaway I also saw one other one other point I'm just I'm reading I'm reading a few points that I took down from your book because it sort of walks through it walks through your story and then it sort of delivers some lessons and and I appreciate the the entrepreneur by nature even like within your organization where you're respecting your past but you're still trying to be disruptive now you mentioned that you were you mentioned that you were disruptive in the sense that you were learning a new way to lead so you were learning a new way to communicate with your staff you're giving them a seat at the table so to speak but you are also when I when I read through a couple points in the book I'm going to read this quote and then I want I want to just double down on this so I could spend 65 hours a week at work but this would not make me a better human or a better manager the purpose of work is to support not thwart the meaning of life companies must create pay systems work schedule and human missions that put time back into the hands of employees the objective is to help everyone get out of their lane and to broaden their lives so this is this is a step further this is more of a work life balance so when you shifted the focus to employees did your mindset about what work is meant to be also shift is that something that came in tandem with it just because you were working in a different capacity because it seems like even though you you adopted this mantra you're still saying that you saw increased returns and I'm just wondering why something like this came out of a communication issue it's still a good thing but walk me through that point because I thought that was very interesting right I love that subject I'm really happy that it came up Scott I've become very passionate about the idea of putting the work back in its place as important super important but not all consuming and serving a larger balanced life for the people who do it which really comes to the very premise of this question in the 21st century what what is the purpose of work you know the purpose of work ought to be among other things to advance the lives of the people who do it and so then you have to actually start to ponder that in answerable question what's the purpose of life and we can't answer all of it but we can answer a piece of it it's not just economic everyone can relate to that there is an important economic component to life but economics is not the purpose of life it's a means to a higher set of ends and so you know you think about productivity and how it continues to advance so of course we can use some of that productivity to make an our case or lumber but we could also use some of that productivity to just plain work class you know there aren't many people in America North America Canada that are a part of that two-job economy working part-time and that's a challenge in and of itself but in our case all of the jobs in our company are full-time and historically people in our industry work 55 or 60 hours a week and you kind of went home Saturday afternoon it was hosted and if you've got enough rest on Saturday at Sunday you could go back at it on Monday and we've really tried to adopt a bit of a different model where we're trying to work a bit last not a bit more and still grow and advance and improve not having it be one or the other and but the other thing I'll say about that is when you take that goal on you're really tackling some deeply entrenched systems like the overtime pay system which I think is actually if you set out today to invent the worst possible pay system for the 21st century you'd invent overtime overtime rewards one thing the longer it takes before you get paid when really what we want everybody on our teams to do right is to figure out how to make the work more accurate more efficient and take less time that's what should be rewarded so we ended up taking our average well let me give you some data we have doubled our sales this decade and reduce the average work week from 48 hours to 40 and significantly increased the take home pay of our employees by increasing the base pay rates and by building a brand new set of incentives we call it performance goal that pays for accuracy efficiency safety productivity things that reduce time not things that take more time now can I ask why it's it seems like that is not the norm yet a company that is what literally one of the oldest companies is is now adopting these forward looking policies you have any ideas to why companies don't change is it just a status quo I think that I do I don't know that I have the answer but I have an idea and it's a simple one I just don't think people are thinking enough about the purpose of work and I don't think there's enough focus on mission and mission really matters if mission you know and there's a lot of talk about this right now in the business world which is very healthy but if the only purpose of a business is to maximize profit in the short term that's going to create a set of outcomes but let's say like in our case the mission is different our mission we chose to adopt is one that I talk about as being employees it employee centric excuse me where the first mission of the company is to be valuable to the people who work here and to have their job advance their life in more than just economic ways so now if that's the mission suddenly a whole new set of priorities and thoughts and outcomes start to emerge everybody in that model that is not about kicking the companies worth to the curb everybody in a company understands the well-being of the company is a super top priority and what we've seen and again I think this is common sense if the people who work at the company feel like the company is making them a priority what are those people likely to do the answer is really obvious right they're going to make the company a priority and so serving others this is just an obvious life lesson being applied to business serving others often enhances the lives of those who do it far beyond what they feel they've given and that same thing holds true in a corporate setting so answer your question I just think it's not enough thought given to what actually is the mission and purpose of this company and a slight twist to think about profit as an important outcome of a higher calling as opposed to the as opposed to the only driver or the only metric I like that a lot and I think well listen it's always nice to say oh that would be so nice if we ran our business like that we always want to focus on people but you know we have shareholders we have stakeholders we have to but now you're you know over the past decade you have a you you're a use case you're you're a you're an actual example of how of how servant leadership of of how this type of sort of forward-looking leadership I wish I didn't have to call it forward-looking leadership but you know let's call it what it is not not every company considers that to be the benchmark and I think that they should so that forward-looking leadership and doing things a little bit differently that's actually paid off in spades so it this is a perfect use case of showing how it actually how it actually can benefit a company now can I this is a really great topic I don't want to to dive off and and divulge but I do want to just understand I was just curious because I didn't it wasn't clear to me when I was reading about you know I when we first when we first connected I was looking into the book that you wrote called obviously the seventh power and you know what is the seventh power I want to know what that piece is because I don't actually know what that is yeah so there's a second part to this or a the first part is my own voice condition which we discussed the second part is two years later beginning in 2012 I began traveling from my home in Maine to the Pine Ridge Indian Reservation in the southwest corner of South Dakota on the northern plains that reservation is the biggest most most most traditionally that's enfranchised and to make poorest of all the Sue reservations on the northern plains so and I've now been there over 20 times they are Scott I discovered or met an entire community that didn't feel fully heard so I was kind of traveling out to the plains a couple times a year searching a bit for my own voice on a on a literal and spiritual level ended up doing so amongst an entire community that felt as if their voice had been pushed to the side I putting those two experiences together I concluded that there were lots of ways for humans to lose a piece of their voice in this world and that perhaps even again back to the question of the purpose of life perhaps it was to self actualize to find your own voice and to be comfortable in it to own it and to live it and share it with humanity but then across time leaders of established organizations had probably done more to restrict or limit the voices of others than to free them and that's what I started to think about my own voice condition not as a liability but maybe an invitation to lead differently now to the question of the seventh power the the Sue let coat symbol that's most cherished by them is the medicine wheel and the medicine wheel honors what they talk about is the six great external powers the power of the west the north the east the south the sky and the earth at the center of that wheel however I had someone show me one day that those who know the old ways of the Sue know that a seventh power exists and that seventh power is you it's me it is the individual human spirit so this whole approach of dispersing power giving every one of voice sharing leadership is really tapping back into a piece of long standing indigenous wisdom which is celebrating and honoring the power of the individual it would be a bit like that iconic line from Rudyard Kipling's the jungle buck the strength of the pack is the wolf and that you create strong communities one individual at a time and just to wrap that up when I got looking at empire building historically whether it was corporations or nation states or religions I really felt that humanity has been building an empire centric model where the individual was taught to sacrifice and make themselves small for the good of the empire but there's a reason today why say engagement at work or confidence in government is so low and that is in the 21st century in the aquarium age more and more individuals are waking up to their own sacred in a power that you are an empire within your into and of yourself and my approach and the and the entire mission of the book is to reinvent organizations tap into that power so that's a bit of a long answer sorry but that's it's good it's it's it's it's it's it's it's the title yeah that's that's what the 7th power represents understood and and that makes a lot of sense and I think that in terms of finding your own voice owning your own strengths building your own personal empire I think there's a lot of powerful things you could take from that but let's let's look at tactically in an organization when you have an open communication style when you have a servant leadership style when you have everyone owning their own I guess they're owning owning their own success owning the company's success how have you seen this type of behavior benefit your company and perhaps hinder some companies during the pandemic when all of a sudden commerce is flipped on its head businesses flipped on its head everyone has to go work from home entire organizational structures are having to revamp digital transformation all these things in a very short period of time so what have you seen with your company what have you seen so good good example with your company perhaps some poor examples with other companies you've seen what what a lovely question and I think so timely for many reasons when you think about combating the virus who has to lead that effort everybody every single human in North America has to lead that effort because the virus moves one person at a time think about some of the other major issues facing humanity or the planet today take global warming or the planet's health who has to lead that everybody take social or racial equality who has to contribute to that change everybody we're living in a world today where the big the big opportunities require everybody the big opportunities require everybody so I believe this model of dispersed power is the the optimal model for the 21st century an internet connected 24-7 transportation enable world to the specific case of this virus our company was in a quote quote essential industry so we never closed during the virus and if you think about our business we um well we've not figured out how to be able to make lumber from our couch and our sweatpants so that's a good point everything everything we do we either have to be at work to do it or it doesn't happen so not only if we work the entire time we've worked on sight the entire time and we do have a few administrative jobs that could be done from home but we decided to all stand together and we've all been coming to work every day uninterrupted since the middle of March we've not had a single virus case among our 550 employees we've not had a virus case among our customers and in our shared leadership model we've simply asked everybody to take responsibility for what they're doing outside of work for the cleanliness of themselves in their area at work and then we put a big emphasis on spacing I never would have thought this was possible but we can do every job in our company from the forest to a construction job site in six foot increments and the other thing we found once we've spaced out a little more is some of our subnetrics started getting better safety got better productivity got better so we feel like we've stumbled on some things that make sense permanently and we have not found operating during the virus to be rocket science developing a vaccine might be closed to rocket science but running a business and staying spaced and staying smart and staying clean is not that complicated and I appreciate the opportunity to talk about that because I'm hoping it may help give others of confidence who haven't been working remotely or haven't been at work about the ability to come back and do that safely do you think it's you think it's too far of a stretch and forgive me if I'm reading but do you think it's too far of a stretch to say that when you do have a workforce that that that feels like they're empowered that cares about the business do you think that they would take an extra I don't know an extra step of caution if they if they feel like I don't know if that's too far I'm just wondering if when you when you enable a workforce and they feel like they're they're contributing something that they want to actually contribute to do they take an extra step of caution knowing that they now feel aligned and and and really just on board with the team and they're all going through this together like I feel like there's an added sense of camaraderie which can which almost can augment the individuals um carefulness uh in their in their outside of work interactions just because there's that there's that there's that pressure to to not let the people down that you're that you're with every day that you feel almost not indebted to but like grateful for um I don't know if that's too much of a stretch I'm I'm just thinking it allowed because it seems like the the team is really taking the precautions and and they feel like you know if if they're going to put anyone at risk they're they're not going to do it they're not going to come into work or whatnot because you have 550 people with no cases it just seems like an uncommon metric across other businesses that are still in business so I love the question and and when you think about our approach uh here is a key thing that happened first I was not interested in making anybody work and with this hit I didn't know we didn't know how people were going to feel about working so we asked them we said what do you want to do here should we take some time off or should we try to work and figure this out we took the time to have that dialogue and in our case the answer was a resounding no we want to work but think about the subtle difference in that step versus skipping it so now everything that happened next was something they were of their own free will helping to create and that I think made all the difference for us so it's really again um using your mission at every critical juncture in your companies decision-making you know we have uh ten ten stores and four manufacturing facilities and I was like well if if half the people really want to work we get we'll run half of them it's three-quarters of the people want to work we'll run three-quarters of the facilities if nobody wants to work we'll wait till people feel better or if everybody wants to work we'll we'll go figure this out and they and they and they chose they chose to they chose to work they they owned it they own the circumstance they own the the requirements needed to make that to make that change into a working environment that was safe while you're still you know in office even even people like you mentioned like the admin people uh we're choosing to come in and be part of that team effort which is which is very um very inspiring because it just shows you hear so much negativity in the news about all my goodness so much negativity in general but I mean people that are essential businesses that are still open I think there was something uh there was a huge story I can't remember the name of the meat packing plant it's a huge enormous organization uh probably provides like a x percentage of meat across all of North America where there's just tons of people uh getting sick they're not being offered sick leave um they're being forced to work like this just all these negative stories about people working during uh pandemic when uh four essential services so it's really just nice to hear a positive story for once because there's so much negativity uh all all these people being forced to work and not you know they don't have a choice they don't have sick leave they don't have benefits what do they do they need to provide for their family so the company doesn't shut down now like you know you get 50% of the employees are sick with with COVID it's just all this negativity so it's nice to hear a positive story I appreciate that a lot um what I wanted to I I always have some closing questions um to just tf like your your life experience but I also I also wanted to give you um the floor for anything that we didn't discuss that you wanted to bring you wanted to bring on to the podcast uh was there anything in in your career at the tf your story or in in the book that we didn't uh going to thank you uh no we've covered a lot but there is one um question for the future that my book contemplates and it's simply this what if everybody on earth felt trusted respected valued heard and safe what might change I think everything might change where can that uh occur I think the place of work is an exceptional candidate to create that kind of feeling within individuals you know uh where where where to add adults get to continue to grow and find themselves school ends when we're when we're 18 or 22 or whatever but we still got so much growth to do we all know that that never ends so we need institutions that can foster that and I believe the place of work is the prime candidate in part because so many people work and second because the place of work becomes stronger when you take that approach of serving the individual uh voice so when we think about change on this planet I think when we look to governments or big bureaucratic institutions with all due respect I think we're looking in the wrong place I think change needs to happen on a souls level one individual at a time and the power of making people feel trusted respected valued and heard I think can transform humanity that's a very strong statement and I and I agree with that because we always look to the other to fix our own problems but let's let's let's start at home let's start in our own selves but also where do people spend most of the time where do people get influenced the most what has the biggest impact well my goodness work it's what we do for a living it's what it's what it's what we live we spend more time at work with our colleagues and peers than you know we do with our spouse and our family in most cases so let's let's optimize that environment and build and and a facilitate growth in that arena because when we don't that's that's that that it just ruins it ruins people's lives when when they are just stuck in an environment with a company but doesn't think the way yours does I think that that's the number one place that we can start and and all of it is just shifting that lens and like I love I'm so happy you brought out some actual KPIs and some actual some actual data points that sort of back up what you're discussing because there's a lot of talk about leadership but I don't think that I don't think I have a ton of I have something don't get me wrong there's a lot of great companies do a lot of great things but I don't I don't enough are are sort of preaching the data points that they've seen in relation to some of the and to some of the I guess the the forward-looking sort of improvements they made in their culture and how they manage how they lead and how their employees sort of engage with with the upper executives right and I think that that balance of power is very important I wish more people would sort of speak to that and speak about the the positive benefits like just exactly like what you did because there's a there's a really strong story for switching the way that we work and the way that we manage and the way that we lead and the way businesses conduct it and it doesn't have to always hit the bottom line just because we're we're thinking a different way it doesn't mean that we're reducing our margins or our shareholders are not getting the same return or whatever you know your excuse may be for not trying to switch things up anyways I really appreciate I really appreciate the conversation I want to ask a few just insight life lesson questions because you've gone through a lot so one one one question I like to ask is if you were going to tell your younger self one lesson anything what would it be let me take a second if you want it's a load of money now I love it it would be to become the change that I caught it quote from Gandhi to learn to look inward for growth and progress that the external world it can't be all-consuming but the real truth that we're seeking in the opportunity for growth that we're seeking lies within so I tell myself to start looking at in the right place for change which is at me not at anyone else but me that's a good lesson that's a very good lesson I think that if more people looked inside themselves and and actually focused on themselves first that would start to accomplish some of those utopian goals that you're you're listing out which I can only help we try and we try and you know move towards achieving there a lot of social change happening right now too so I think that a lot of that introspection can be a very good thing another another question what is one one resource that you would recommend that you that you've learned from it could be a book a podcast an audible a person that you would suggest somebody go read go listen to go look into yeah I'd say my favorite business on there is Jim Collins who's got a bunch of books out but my favorite is two favorites are built to last and good to grade and within the book built to last my favorite idea that he writes about is the power of the end versus the tyranny of the war I thought about that a lot with respect to work and this pandemic so in one model the it would be framed this way we can work or we can be safe in the other model that's framed with this connector we can work and we can be safe a whole new set of possibilities emerge so the possibilities often derive from how the question or the proposition is framed and he talks about the tyranny or the limiting of the word or the limiting power and the liberating power of the word and so Jim Collins very good and last question a most important question where do people go to find more about yourself your journey your book is there LinkedIn website all those resources sure thank you so you can see our company at Hancock lumber dot com and then you can specifically connect with me at Kevin D Hancock dot com D is in David and there on that site there are a bunch of resources including my books that you can order there or you can access this book and my first one on Amazon or anywhere that books are sold that's all for today thanks again for joining me on another episode of the success story podcast you can download or stream this podcast wherever podcasts are available including iTunes Spotify Google Stitcher I Heart Radio and many others you can also watch this podcast on YouTube if you haven't already please subscribe and share this podcast with your friends family co-workers and peers please leave us a rating on iTunes it takes about 30 seconds as it allows other people to find our podcast and let's our amazing guests reach even more people with their message and remember any rating is fine as long as it contains five stars I'm Scott Larry from the success story podcast signing off