11 Business and Life Lessons from the Career of Bob Maricich
11 Business and Life Lessons from the Career of Bob Maricich
By Clint Engel, Editor in Chief, Home News Now
On June 6, during the next High Point Market, International Market Centers CEO Bob Maricich and four other industry icons will be celebrated in High Point as the Class of 2020 inductees into the American Home Furnishings Hall of Fame. Like so many things this year, the celebration was delayed, impacted by the pandemic, which has forced businesses and other organizations to reexamine their operations, rethink how they do things, when they do things and adapt to new challenges and new ways of operating in uncertain, changing times.
With that in mind, Home News Now recently interviewed Maricich to gain insight into the business and life lessons he’s picked up along a 46-year career centered in the home furnishings industry. There have been seven stops along that path, and with each one, Maricich came away with at least one core learning that has informed him for the next stop, and the next. We start at the beginning:
Texaco, Port Arthur, Texas, 1973
“If a job isn’t energizing, get out quickly.”
This is, perhaps, the simplest lesson from the shortest stint on Maricich’s career track (also, the only one that had nothing to do with furniture). The first person to go to college in his family, Maricich became an engineer because, well, he was sitting around the fraternity table, noticing how many of the guys just a few years older were securing these great jobs in the field. So why not?
Maricich, who went to Montana State University on a basketball scholarship, graduated in 1973 and went right to work for Texaco, one of the largest companies in the world at the time. He worked in a giant office in Port Arthur, Texas, surrounded by about 5,000 technical types and quickly learned this wasn’t for him.
“It was unbelievably bureaucratic and overwhelming, in terms of protocols,” Maricich recalled.
“I’m not that guy who can sit in an office, look down the hall and say, ‘If I do this for five years, I can move down to that end of the hall. It was boring.”
Six months in, he told his wife this wasn’t for him. He left after nine months and took a pay cut to move on. During the course of his career, whenever he looks back at decisions like these that seemed difficult, his first thought is, “Gosh, I wish I had done it sooner.”
R.S. Bacon Veneer, Dubuque and Marshalltown, Iowa, High Point, 1974-1981
“Get experience in as many business disciplines as you can; build competencies”
With his engineering background, Maricich originally joined the company to help solve a pollution problem at a sawmill and veneer mill, but the job turned into so much more. He oversaw construction of a factory. He ran a factory of about 100 employees.
“I was the engineering manager, the purchasing manager,” he said. “I learned how to schedule production. I learned how to manage a workforce.” He even got involved in labor relations and in the selling process. R.S. Bacon’s customers included Herman Miller and the biggest names in office supply.
Over the course of seven years, Maricich got experience in every aspect of the business with the exception of accounting.
“It was a small environment, and I was a learner,” he said. The payback would become obvious about a decade later.
Flexsteel, 1982-1989, Dubuque, Iowa
“Take a risk to try something new,” and
“The importance of leadership caring about you.”
Maricich jokes that he’s the only living human to pick up and move to Dubuque twice, but in 1982, he did just that, returning to the city to join upholstery producer Flexsteel on what would become a quick path to the position of national sales manager. Then in 1987, he came up with the idea that Flexsteel should get into the contract/hospitality business. He sold the company’s leadership on it, but, personally and professionally, Maricich was taking a big risk, leaving a secure position for the unknown — to start a business from scratch.
And it was extraordinarily successful, “like a rocketship,” he said. In 18 months, Flexsteel’s hospitality business went from an idea to $28 million in annual sales.
“A big part of it was being in the right place at the right time,” he said, “and having the support of the company.”
That brings us to that second lesson on this stop, perhaps best illustrated by a final act. During Maricich’s eight years with the company, Flexsteel had an incredible culture of inclusiveness, he recalled. “Senior management really cared about people, individually, about me,” he said.
Maricich’s success in starting the contract business for the publicly-held Flexsteel got him noticed by LADD, which recruited him away to lead its American of Martinsville operation, then the largest manufacturer of furniture to the hotel industry. As he was getting ready to go to work for a competitor, something happened that Maricich will always remember.
Flexsteel had granted him stock options over the years. Typically, when you leave a company, any options that aren’t exercised are forfeited. Flexsteel’s CEO, the late Jack Crahan, wanted to know what Maricich intended to do with those options. Maricich figured he really couldn’t do anything with them since he had already turned in his resignation.
But Crahan wouldn’t have it. He had earned them. He deserved them, which led to the next problem. He would need to invest a lot of money to exercise those stock options in order to turn around and sell the stock for still more money, and Maricich — still early in his career — just didn’t have the money. But Crahan, his soon to be competitor, didn’t let it go.
“He personally lent me the money for a week so I could exercise those options,” he recalled. It’s one of those lessons in leadership — in fairness, in taking care of your people — Maricich said he’ll never forget.
LADD, president of American of Martinsville, president of American Drew, 1989-1996, Martinsville, Va., High Point
“The importance of investing in growth and not just cost-cutting,” and…
“Never ever, ever be a victim.”
The leaders at LADD in those days were “incredible optimizers,” Maricich said. “They could buy these small companies and put in financial disciplines. They were unbelievable cost-cutters.” They knew how to wring out value.
But the flip side was this: They never made a significant investment in marketing and growth and, ultimately, “it got to a point, where virtually none of the business they owned were growing.” Maricich ticked off the list. Pennsylvania House, out of business; Daystrom, gone; American of Martinsville, out of business; Brown Jordan, sold off.
He came away recognizing it’s important to be financially prudent, but not at the expense of growth. “If you’re not growing your top line, you cannot financially cut your way to success.”
The second lesson, “Never ever, ever be a victim,” has been one of Maricich’s mantras for years. He doesn’t know who said it first, but he does know it was reinforced during this period, because he was fired from American Drew and he felt the victim, maybe for a short while.
“I thought I was a wonderful guy, a talented executive,” he said with a laugh. “And being fired is a gut punch. It’s a character check.
“You’ve got to realize you can’t be a victim. You pick yourself up and you go on to what’s next. No one is feeling sorry for you, and the killer is if you are feeling sorry for yourself.”
Century, 1996-2007, Hickory, N.C. (Maricich may also be the only human to move to Hickory twice.)
“The incredible and durable power of an aligned strategy.”
Maricich started working in Century’s hospitality business as a sales manager, and in short order, he became president of the high-end home furnishings manufacturer.
“We had an incredible run. It was a decade where the company grew dramatically, profits grew dramatically. We set the foundation for a great company that’s a great company today.”
He looks back with great pride on this period of his career. He thinks of the head-on competitors in the space — Henredon, Drexel Heritage — and how they’re gone, how Century is the luxury home furnishing producer still standing.
“I had a little part to play in that, but a big part is (having an aligned strategy),” he said.
“It’s aligned factory people. Your sales force is aligned. Your executives are aligned. Your board is aligned.” And then there’s the power of culture. With Century, it happened to be a multigenerational Shuford family culture and it was built on those values.
“The combination of the aligned strategy and a great culture led to retaining great people, attracting great people and, really, a decade of incredible success.”
World Market Center, 2008-2010, Las Vegas
“Leadership in really tough times; operating in foreclosure,” and
“If it’s to be, it’s up to me.”
As 2007 was drawing to a close, Maricich, who was 57, was itching to try something new again. He was proud of what he and his team at Century had accomplished, but now, it was more of a matter of “maintaining,” than building or innovating.
“I really wanted to do something different. And I really wanted to get involved in something with private equity, something with growth orientation, something with an equity opportunity, real estate,” he said.
He started looking for other opportunities, and one that came around was with The Related Cos, a large New York developer that owned half of World Market Center. It had opened for furniture for the first Las Vegas Market in July 2005 and already had run into financial trouble.
“I knew it was in trouble,” he said. “The thought of going somewhere, being part of a turnaround, working with really smart people and trying to figure out what’s next there was just intriguing to me.”
Meanwhile, a lot of people thought he was crazy. How could he leave a phenomenal job with a phenomenal company to join a struggling market that, sure enough, would be foreclosed on by lenders shortly after he arrived?
That first year and a half, operating in foreclosure was challenging to say the least. By this time, his kids were now in college, and whenever Maricich dared wonder aloud what he had gotten himself into, his kids would recall one of his mantras, the words he had framed for each of them years back.
“They’d look at me and say, ‘You’re not being a victim, are you, Dad?’”
Maricich has another mantra he’s been reciting for years, too, and this one is more appropriate: “If it’s to be, it’s up to me.”
Again, he doesn’t know who coined it, but he recognizes the words as absolutely true. “Whatever you do in life is up to you,” he said. “You have to have that personal ownership.”
Maricich went to work for World Market Center, looking for creative ways to not only survive but to build on the properties in Las Vegas, to turn the venture into something more, something bigger. “The idea that we could buy these assets in High Point, merge them with the assets in Las Vegas and form IMC was, to my amazement, something no one else had ever articulated or thought of.”
Those “High Point assets” were the International Home Furnishings Center, Showplace Properties and IHFC Properties, with 16 market buildings between them. With the help of the owners of WMC, Maricich and his team put together what was to become International Market Centers. They did it with an infusion of capital from private equity firms Bain Capital and Oaktree Capital, merging WMC and the three High Point companies into one. All but IHFC were either in bankruptcy or foreclosure, but that doesn’t stop shrewd risk-takers like the billionaires behind these private equity firms from moving on opportunity when they see it. And that takes us to the final career stop in this story.
International Market Centers, 2010-present, Las Vegas, Atlanta
“The force multiplier of Strategy + Culture + Capital,” and
“Aligned A-players take a company to new levels and heights.”
“Effectively, it was a startup,” Maricich said of IMC. “And overnight we were a $1.5 billion enterprise. We had to put in all new systems (because none of the four pieces has systems capable of supporting something as large as IMC). I recruited a new management team, many of which are still with us.
“It really culminated in something that I knew but never really had articulated and that’s the force multiplier: If you have a great strategy and can build a great culture and you have access to capital, you can do incredible things.”
Maricich had read about something similar, but it was always articulated the opposite way, the negative way. Companies that fail do so for three reasons. It’s usually a matter of bad strategy (or in today’s environment, a failure to be agile and adaptive), a lack of access to capital, or a failure to execute or a combination of the three. Maricich was just turning this idea inside out. And to him, the “execution” part of the formula had everything to do with people and culture.
“So we checked all three boxes,” he said, “or had things underway that did, and we’ve done great things (since).”
In 2017 Bain and Oaktree exited IMC and Blackstone, the world’s largest real estate investor and one of the world’s largest private owners of equities, acquired a majority stake. A year later IMC would grow by nearly 70% with the acquisition of AmericasMart.
HNN asked Maricich for one more life or business lesson, one to take away from 2020, clearly one of the most trying years on record for the industry and for the world. He found it in his past.
“On the business side, it’s the importance of having access to capital and a strong balance sheet so you can weather your way through it,” he said.
“It kind of goes back to the (force multiplier) of strategy, culture and capital. Something like this was inconceivable to model. In a recession, you may decline 30%, but it’s doesn’t go down to zero. So having access to capital or a fortress balance sheet is really important.”
And there’s one more:
“Tough times are the mettle and the measurement of great leadership at all levels of an organization,” he said.
He recalled an old saying about how “great sailors are not made on calm seas,” adding, “It’s pretty easy to do the right thing when the wind is at your back.
“I think something like this calls for incredible leadership and fortitude.”
Over the course of his career, Maricich said he’s developed a deep appreciation for courage. “The courage to move on, the courage to make changes, the courage to do something very different from what maybe other people would do.”
“This is a time for great leadership and courage and, hopefully, having the foresight to have the capital to get to the other side.”