It is a structure that keeps Hen-dricks close to the people who directly serve ABC's customers--sources of critical information that he uses to do his "real" job. He still spends at least an hour every day speaking directly with store managers, and he calls the office in which he works the "service center" rather than "corporate headquarters"--a prosaic but more accurate description of how he defines its role and his own. For if the service center is supporting store managers, and the store managers are tending customers, then Hendricks is free to do what he does best: find ways to grow the business.
"Somebody in the company has to think about what this industry is going to look like in five years and get ahead of that," he says. So he has kept close tabs on satellite technology and is now ready to link all his stores to a videoconferencing system that will enable store managers to keep in touch and help solve one another's problems. His wife, Diane, started an insurance company that saves his customers up to 40% on workers' compensation costs. And he's developing a recycling program that will enable contractors to remove and dispose of asphalt shingles safely and cost-effectively. It's the kind of conceptual thinking that ABC, a commodity business, needs as fuel to differentiate itself from its competitors, and that Hendricks can continue to provide because his ingenious structure has allowed him to carve out that space for himself.
"I would describe myself as the visionary," he says. What CEO doesn't? But what sets Hendricks apart is that he's a full-time visionary.
assuming you're intent on continuing to grow your Inc. 500 company, there's one last question you need to think through: Why?
Yes, building a big company will give you a tremendous sense of accomplishment. And expanding into new areas will offer greater opportunities--financial and otherwise--to your best employees. But those who saw their Inc. 500 ranking of a decade ago as just a start viewed growth in another way: as an essential part of their business strategy.
Entrepreneurs do sometimes grow businesses simply because the option presents itself. But when that happens, they often end up in a tug-of-war with what the business has unexpectedly become: "It isn't fun anymore," they'll say. "I don't know my employees like I used to." Growth becomes an overwhelming distraction.
When Dennis Bakke and his partner, Roger Sant, cofounded AES Corp. (#12 on the 1986 Inc. 500), in 1982, they openly set out to create one of the leading independent power producers in the world. The larger AES grew, the better a vehicle it became for another goal they had: proving, as Bakke puts it, that a successful company could be built on "certain principles." On the surface Bakke sounds like a New Age management guru. AES was founded, he says, on the assumption that "people are thinking, creative, capable of making decisions, and trustworthy. They're unique, fallible, and accountable, and they want to be part of a group that makes a contribution to society." Sounds lofty, not unlike the rhetoric in corporate mission statements. But Bakke and Sant, well, they mean it.
Over the past decade, they've created a system of what Bakke calls "radical power sharing" at AES. There's virtually no office staff, no finance or legal department, no head of human re-sources, no safety or engineering department. Multidisciplined teams at 31 plants and project-development teams in 35 countries make their own decisions. An engineer might handle a billion-dollar coal purchase, or a mechanic might help invest part of a plant's debt reserve. And to make sure people understand why they're working in this "radical" way, they take part in educational programs that focus on the company's values, fill out surveys that gauge how well AES is living up to those values, and may even spend time with Bakke discussing philosophy.
So tenacious were Bakke and Sant about their values that when the company first went public, in 1991, the Securities and Exchange Commission required the founders to state in their prospectus that given the choice between profit and principle, the latter would rule the day.
And it has, though not always smoothly. In 1992 workers at an AES plant in Oklahoma were caught falsifying waste-water quality reports--an incident that resulted in a $400-million loss in the company's market value in one day. "I was very close to being let go," says Bakke. There was pressure from the board and shareholders to switch to a more conventional management structure, but Bakke and Sant resisted and eventually prevailed. The stock has since rebounded impressively. "Right now everyone thinks we're geniuses because the stock has gone up 35% this year," says Bakke. "But I tell our people not to get too giddy. Even when things are bad, from a financial standpoint, we're going to stay the course, and that's hard when you're getting pelted inside and out. But it's our struggle, our experiment."
Bakke spends much of his time visiting company plants, meeting with employees in groups of 10 to 100. Given the company's sprawl, that requires him to be a globe-trotter. In just the last six months, he has touched down in Argentina, Pakistan, India, Hungary, Northern Ireland, England, Australia, Taiwan, Kazakh-stan, and China. "I'm not talking about what kind of gas-fired burners they're going to install," he explains. "We're talking about philosophy. That's the nuts and bolts of the business as far as I'm concerned." As hectic as his job sounds, Bakke seems to feel perfectly comfortable in it.
It is, of course, the role he's always had.
