Why Good LBM Dealers Sometimes Struggle to Be Great
One of the most influential business books ever written is Jim Collins’ “Good to Great.” Its opening premise is both simple and uncomfortable: “Good is the enemy of great.”
Collins’ point was not that being good is a failure. A good company may be marginally profitable, respected, and filled with capable people. The danger is that mediocre success can remove the drive to improve. When results are just acceptable, it becomes easier to tolerate outdated practices, avoid difficult conversations, and postpone changes that could move the organization to another level.
I was reminded of that idea while reading about the PGA’s Ryan Fox’s recent victory at The Open Championship in England. The night before winning the biggest tournament of his career, Fox reflected on his journey and told his team that if someone had offered him the career he had already enjoyed, he would have gladly accepted it. He was appreciative and understandably proud of what he had accomplished.
His caddie, coach, and manager saw something more. They challenged him: “Let’s dream about winning The Open. This could really happen.” The next day, he did.
As I read that story, I couldn’t help but think about independent LBM dealers. Our industry has many strong, okay-run companies. A dealer may reach $30 million, $100 million, or $300 million in annual sales. Margins are okay, customers are loyal, employees are experienced, and the company has built a solid reputation. Those are meaningful accomplishments.
But moderate success can quietly become the justification for maintaining the status quo. We have always done things this way. Nothing is badly broken, so nothing receives immediate attention. Etc., etc.
That is often where good companies stall.
The dealers that consistently outperform their markets rarely think that way. They question long-standing practices even when those practices are still producing okay results. They look for opportunities to improve customer experience, increase productivity, grow wallet share, strengthen gross margins, develop leaders, use technology more effectively, and execute more efficiently and consistently. They are not chasing change for the sake of change. They are refusing to confuse past results with future security.
Another Collins principle is confronting the brutal facts while never losing faith in the ultimate outcome. LBM leaders need both sides of that equation. Optimism without facts becomes wishful thinking. Facts without confidence create paralysis. Great dealers are willing to dive deeply into declining margins, inconsistent pricing, weak prospecting, incorrect inventory levels, mediocre or poor on-time, in-full (OTIF), lack of future leaders, etc. They do not explain away every disappointing result by blaming the market. They identify what they can control and take action.
This requires better questions. Are salespeople growing profitable businesses or simply satisfied with the status quo? Are we measuring sales only by revenue, or are we also examining gross margin, account retention, prospecting activity, and share of wallet? Are managers truly coaching, or are they spending most of their time putting out fires? Are we developing successors, or hoping the right people will somehow be ready when needed?
Collins also wrote about the flywheel: the idea that lasting success usually comes from many disciplined actions repeated consistently, not one dramatic breakthrough. That certainly describes the LBM business. A dealer rarely becomes great because of one thing. Progress comes from doing hundreds of important things a little better, day after day.
It may be by improving the professionalism of all salespeople. It may be having sales managers spend more time in the field. It may be reducing delivery errors, improving product knowledge, improving communication, training inside salespeople to ask better questions, making sure salespeople follow up in a timely manner, etc. Each improvement may appear modest by itself. Together, they build momentum that competitors find difficult to match.
One of Collins’ most important findings was that great organizations are often led by what he called “Level 5 Leaders”: people who combine personal humility with intense professional will. These leaders do not need to be the smartest or loudest people in the room. They give credit to others when things go well, accept responsibility when they do not, and remain determined to do what is best for the long-term health of the company.
That leadership model is especially relevant in a relationship-driven industry like ours. Many LBM companies have strong personalities, proud histories, and leaders who grew up in the business. The best leaders respect that history without becoming trapped by it. They listen to employees and customers, remain willing to change their own minds, and make difficult decisions when the organization needs them. Their objective is not to protect their personal legacy. It is to leave the company stronger for the next generation.
That is also what Ryan Fox’s team provided. They helped him see something bigger than what he had already accomplished. Owners and managers must do the same for their people. One of the most valuable things a leader can provide is belief—not blind optimism or unrealistic expectations, but a conviction that the organization and its people are capable of more.
Of course, dreaming bigger cannot mean simply setting an aggressive sales target and announcing it at a meeting. A meaningful vision must be supported by priorities, measurements, resources, training, and accountability. If we want more profitable growth, we must define what that looks like by market, branch, salesperson, and customer segment. If we want stronger leaders, we must give people opportunities to lead before a position becomes vacant. If we want better customer experience, we must examine every handoff from the initial quote through delivery and collection.
Jim Collins wrote that “good is the enemy of great.” I believe that is especially true in the LBM industry. Most dealers do not fall short of their potential because they lack good people. Many simply become satisfied with being just “okay.”
The best dealers I have worked with around the country are different. No matter how strong their performance becomes, they continue asking, “How can we serve customers better?” How can we develop stronger leaders? Where are we accepting results that should no longer be acceptable? What must we begin doing to remain successful five or ten years from now?
Like Ryan Fox standing on the doorstep of a major championship, they never stop believing another level is possible. The journey from good to great does not begin with a slogan, a retreat, or a new strategic plan. It begins with the courage to look honestly at where we are, the discipline to improve what we can control, and one deceptively simple question: Are we dreaming big enough?
Mike McDole has 40+ years of actual LBM experience, including being SVP of a large regional pro-dealer, and is the principal of Firing Line LBM Advisors. He’s also partners with Greg Brooks of the Executive Council on Construction Supply and his LMS. Mike can be reached at 774.372.1367 or Mike@FiringLineLBM.com.
