The Sky’s the Limit

For 84 Lumber, the nation’s largest privately held building materials supplier, there’s nothing but success ahead

It‘s the name of the town.

Eighty Four, Pa., is an unincorporated village about 20 miles south of Pittsburgh, and that’s where 84 Lumber got its name. Now here’s what really matters: 84 Lumber is the nation’s largest privately owned supplier of building materials, manufactured components, and industry-leading services for single- and multi-family residences and commercial buildings—and one of the best large companies to work for in America.

Just ask Frank Cicero. He was an applied math and computer science major when he signed on with the company 37 years ago. Today he’s 84’s Chief Operating Officer, and as excited about the company as he was on Day One. We recently spoke to Cicero and his CIO, Paul Yater, about 84’s enviable position as a market leader.

84 Lumber is first and foremost a family company, founded in 1956 by Joe Hardy. An engineer by trade, Joe became attracted to the lumber business, and together with his two younger brothers and a friend, built a cash and carry lumberyard geared to the needs of builders in Pennsylvania, Ohio, and West Virginia.

Joe’s daughter Maggie Hardy Knox took the reins in 1992 at just 26 years of age, transforming the traditional legacy lumber company into a vertically integrated enterprise at a time when game-changing reorganizations were rare to see in the industry, particularly in family owned companies.

Knox reworked the operation to serve the needs of the professional market, driving the company to over a billion dollars in sales in 1993, and doubled that figure the next year. She shepherded the business through the hellscape of the 2008 market and the years of pressure that dogged the building industry. Now, the certified women-owned business enterprise is one of the most respected in the industry.

“Maggie changed the whole direction of the company,” Cicero recalled. “She steered it in an era when the industry was changing, and changed its entire culture. She did that by really listening to customers and associates and taking a fresh look at the company and charted a new course for 84 Lumber.

“She’s always had the ability to listen to customers and associates,” Cicero recalled. “And then in very difficult times—the housing burst and recession of 2008 and 2009—she was a fearless leader. Never once did she think about herself; she always thought in terms of our associates and made decisions based on people and family. Because Maggie puts people first, 84 is the company it is today.”

Getting Better All the Time

Today, that means an impressive national footprint. 84 boasts 250 individual profit centers serving 100,000 customers in 126 of the country’s hottest markets. Four divisional vice presidents, 24 area managers, 250 store managers, 1,000 outside salespeople, and 5,600 associates are constantly servicing customers in stores and at the company’s team headquarters. 84 also operates nine manufacturing facilities for creating roof trusses, wall panels, doors, moldings and millwork, and engineered lumber products.

“We've also got an installed sales component of our business,” Yater noted. “We provide turnkey services, so if you want to buy the lumber from us for custom framing we can do that scope of work. If you want to buy insulation or siding, we can install it, and the same goes for doors, windows, and trim. We can get you whatever product you need and manage the installation as well.”

The company also offers a range of projects and plans ranging from home plans, kitchen and bath redesigns, garages and carports, outdoor living and recreational spaces, and more.

Cicero estimated that the country’s top 20 homebuilders represent roughly 17% of their local and regional business. They also handle a tremendous amount of national business, and there’s a division that is focused on multifamily building aspects as well.

84’s annual revenues have been on the rise for a decade, and over the last several years, have reached $4 billion annually. According to Yater, the firm’s steady growth is attributable to Maggie’s approach to culture.

“84 is still firmly about the people, and that comes from the leader,” he said. “Maggie’s willingness to listen and be involved and really care about people is what drives this company, and deep in this culture is a continuous improvement attitude.

“We’re always trying to find a better way. Is there something else we could be doing? How can we get better? That mentality runs deep. It's based on the spirit she built, and by that I mean, yes, we are built on our stores, but we’re also built on our people, our managers and leaders of our stores and how they drive their business. Maggie is always there to support them and give them what they need to be successful in everything they do. That’s how we think, how we act, and who we are.”

Propelled by Passion

“I have a saying,” Cicero confided. “If you find someone's strength, it is certainly their weakness. Our strength is being able to adapt to each individual customer. We have to seize the opportunities no matter what it is to help small builders become big builders. We watch them grow along with us, and that’s where the strength is. The challenge this brings is maintaining this singular culture that we have, keeping everybody between the same guardrails while giving them the ability to shift to meet the needs of their individual market.

“That’s where you see the true ‘secret sauce’ in the company,” he continued. “If you're in Fort Myers, Fla., and you're the general manager in that store, and the bulk of your business is installing windows, installing trim, and manufacturing doors, you are able to set yourself up to service those customers and each individual market. That’s how we seize the opportunities with the flexibility in a large organization.”

Yater added, “We give our managers the flexibility—free rein, quite frankly—to find solutions to help customers solve problems and service them however that makes sense. We find ways to do it locally and nationally, and we create processes by which we can scale those services. That’s a big part of the way we seize opportunities.”

Since starting at 84 Lumber in 2017, Yater has been leading an IT transformation to further fuel the organization’s success. He spent his first 90 days with the company on a nationwide listening tour to establish where the company was in terms of tech, and what the demands of the digital age would be going well into the future.

“We created an innovation cycle around a couple of different things,” he explained. “We give our associates the tools that they need to do a great job and serve our customers. As a distributor-building materials supplier, we strengthen our vendor relationships to make sure we can get products to our customers in the best possible, most optimized way. Those are the pillars of our innovation.”

From automated ordering and scheduling to maintaining inventory levels, 84 uses state-of-the-art tech solutions to keep their employees and customers at peak efficiency through every phase of a building project. Yater views the firm’s technological progression as getting repetitive duties out of the way to make room for increased speed, accuracy, and efficiency in all corners of the organization.

“Paul and Frank have been key players in helping me build a strong foundation for whatever our associates need to be as successful and productive as they can be,” Hardy Knox said. “When I promoted Frank and hired Paul, they both set out to do the same thing I did when I joined the company: Figure out where we can improve, then make it happen. Technology has been a big part of that. For example, we have some new manufacturing capabilities we’re creating. Our installed sales component is growing, and now, thanks to Paul and his team, we have a great way to manage it. We've given our associates ways to more effectively integrate with our customers through an automatic purchase order system and other innovations.”

Those technical inroads come in very handy for 84’s supplier partners. The company very nearly takes a contractor’s all-consuming view of each project to help understand their customers’ needs and meet their goals.

“It’s a simple thing to say you're going to do what's expected every day,” Yater mused. “If you’re on a job site and doing walkthroughs or inspections and something needs to be addressed right away, you can take a picture with a tablet, send it back to the store, and we get working on it right away. We have always been responsive to customer needs, but this helps us take it to the next level.

“Viewing the job schedules and keeping resources on track is incredibly important for our customers’ productivity wherever they are in a phase of a project, ‘Did electrical go in? Was the concrete poured? Are we ready to go with framing? Where do we stand?’ We keep up with flexible schedule changes and with the people who need to get answers in real time. We upgraded the platforms and services in the store, and getting accurate information went from several minutes to seconds. Building on a strong foundation for whatever our associates need to be as successful and productive as they can be is the foundation, and that’s what we focus on as we innovate.”

He added, “No matter what, somebody in our company will find a way to make something happen, move mountains and then work miracles for our customers. That way, the next time you need something, you're going to come back to us because we did exactly what you needed, when you needed us to help. We think what makes a great customer experience is that there’s somebody here to help you every day so you can be successful. We're committed to doing that inside-out, upside-down, and twice on Sundays.”

“Paul is right,” Cicero confirmed. “When you start at a company, the first thing you're taught is customer service. Let’s say you're a key leader in a homebuilding company that’s acquired by a large national firm, and you decide to leave and start your own business. For example, we have a customer that started his own company all by himself with two people, and because of our past relationship, 84 Lumber supported him. He’s probably the second biggest builder in Pittsburgh today, building $800,000 homes. We were able to help him start his business and grow together. From serving the smallest customer in the store to helping someone start and grow a company is where we can go any day of the week.”

At 84 Lumber, there’s room for every employee to excel too. That’s one of their bedrock beliefs, and it's paying off.

“Our culture creates an environment where if you're a competitive individual that wants to come to work in an organization where you work hard, care, and check your ego at the door, you can do anything you want in this company,” Cicero stated. “We have lots of great stories. For example, our Vice President of our Western Division, Jorge Espinosa, started as a manager in training and now takes care of that entire division. If you’re an individual that likes to get out there and be competitive and succeed, you can make a great mark in this company.”

“The sky's the limit,” Yater enthused. “It’s all about attracting the right people. Finding that person who is willing to bet on themselves is wired into the culture. There's a competitive nature, there's a belief in yourself, there's a drive to get better. If you focus on continuous improvement, you know that there’s an entrepreneurial spirit somewhere in there.

“I would argue that we have the best training programs in the world, with lumber and sales camps and leadership training, courses and teachers and components of the company that can build any person into whatever they're willing to commit to being at 84.”

Maggie chimed in, “Hard work and dedication have to come with it, but if you're willing to put that in and care about others, you can be successful. We are a 64-year-old, second-generation family company. I’m 54 with a 25-year-old son, and I am committed to keeping the company privately held to protect the family aspect of the company. That is important to us, and it ensures we can continue growing our business and our associates the way we know works best.”

For the 84 Lumber team, that’s the name of the game.