Hobby Lobby CEO and founder David Green
This is the stuff retail legends are made of.
In 1970, 28-year-old David Green, who worked full-time at a retail store, noticed that women who came in looking for picture frames often couldn’t find what they were looking for. Armed with a $600 loan and a bit of rented garage space, Green and a partner started making their own frames. Forty years later, Hobby Lobby – which now sells everything from arts and crafts to fabrics and, of course, those legendary picture frames – has over 450 stores in 39 states, carries no long-term debt, and saw same-store sales rise six percent in 2009 (yes, the same year retail industry sales declined by 2.7%). Clearly, these folks in Oklahoma are doing something right.
To kick off an NRF blog series featuring retail executives during the holiday season, we reached out to Hobby Lobby founder and CEO David Green to talk about holiday trends, why the company remains closed on Sundays, and what he’d do if he had to start all over again.
An NRF survey conducted last holiday season found that one in six consumers planned to make more gifts as a result of the economy. As an arts-and-crafts retailer, did you see that trend play out among shoppers, and do you expect that trend to continue?
That trend will certainly continue. Because of layoffs across the country, people may have more time on their hands so they are using that time to make crafts and turn them into gifts for the holiday season. During weak economies the crafting industry usually does well. In addition to people making their own gifts, there is a group of people who will also sell their crafts and projects to supplement their income.
In spite of the economy, Hobby Lobby surpassed $2 billion in sales for the first time last year, and saw same-store sales rise 6% year over year in 2009. The company also has no long-term debt. To what do you attribute this success?
We try to honor the Lord in all we do. I think he has brought us the best employees and I would contribute a lot of our success to our great people. We’ve also learned from our mistakes, we listen to what products our customers want, and we strive for growth without rushing into expansion.
Your company has made news by instituting a starting wage of a least $11 an hour for full-time employees and $8 an hour for part-time employees. What was the rationale behind this decision, and what has been the employee response?
We are a very successful company and we feel like we should share that success. It is just the right thing to do. It’s also good business. We have loyal employees because we try our best to be loyal to them.
Hobby Lobby is very much a family-run business: one son serves as company president, your daughter is VP of the art and creative department, and another son heads up Mardel, a Christian bookstore and Hobby Lobby affiliate. What advice can you offer other business owners on how to successfully work so closely with family members?
When you are dealing with your family, I think the main thing you should do is not decide where you want to place them. Put them where their strengths are even if it is totally different than what you had in mind for them as they grew up. I think each one of my children – and now grandchildren – work in positions that highlight their strengths and passions. We are hoping that their places in the company will continue to reflect their passions and the gifts that God gave them.
Of course, not all of Hobby Lobby’s 18,000 employees are family! So, what do you look for when hiring new talent at your headquarters?
What we are looking for most are employees who have integrity. If they have integrity, we can teach them what they need to learn in most positions. We want to have employees who have a sense to serve and not to be served. Hopefully, that attitude stretches from the very top to our newest employee. We should serve our employees just as much as we serve our customers.
Hobby Lobby is one of the only national retailers that remains closed on Sundays. Talk about your philosophy behind this decision.
It has really been a key to our success. Closing on Sundays and giving our employees time to worship or be with their families has been a real positive for us. It really allows us to recruit the very best people.
Which area of retail do you enjoy the most?
Without question – merchandising. I always tell people that I am the vice president of merchandising. I spend most of my time with the merchants. We would like to be the greatest merchants ever. I think our buyers do a phenomenal job and we put together a tremendous selection of product. We have about 100,000 items going to our stores within a 12-month period.
Your company is celebrating its 40th anniversary this year. What accomplishment makes you most proud?
Probably the thing I am most proud of is our minimum wage policy. Before we increased the full-time hourly wage to $11 an hour this year, we instituted a $10-an-hour policy in 2009. I think that gave me more joy than anything that I have ever done. The employees received it well. It’s not good to make people cry, but we made a lot of people cry with joy when they received their raises.
As an Oklahoma native who chose to keep the company’s headquarters there, give me your best sales pitch for visiting The Sooner State.
Oklahoma has four beautiful seasons and one of the strongest economies in the nation. It is a great state and we are just proud to be here.
Complete this sentence, “If I had to do it all over again, I would…”
I would not grow as fast during the beginning. In our initial years, we experienced some difficult times because we grew too rapidly. Because of the impact the 80s oil bust had on Oklahoma’s economy at that time, our positioning really hurt us. We learned a lot from that period and we are positioned much better now. For example, we carry no debt. But back when we first started, we had expanded too quickly and had a debt load. If we had just expanded a little slower and minimized our debt, we would have done a lot better during our infancy stage.
8 Comments
Great Q&A with Mr. Green. Amazing he had a 6% increase in sales in 2009. He seems like a very humble man who has accomplished quite a bit. I enjoyed his views on hiring and employee integrity. It’s always a breath of fresh air to hear about ethical big business. Thanks.
While I believe Mr. Green is sincere, as a former employee of Hobby Lobby I can say from personal experience that the ideals and the reality are 2 different things. I was employed there for over 6 years, and I and the other employees were “asked” by store management to work all day on a number of Sundays (notice on bulletin board said mandatory, employees who wanted to attend church were to come to work in the afternoon). The store I worked in had 8 managers in 6 years, some good, others not. The current manager of the particular store I worked in cut several full-time employees down to part-time (causing them to lose their benefits) so that he could hire his friends to fill the full-time positions. There was also a District Manager who believed in “Management by Intimidation”–he decided which employees in each store he liked, and which ones were on his “hit list”. I always tried to help customers in my department as well as in other departments, worked over and above the hours I was asked to (without going into overtime), and had built up 72 hours of comp time that I was not able to take and did not get paid for when my name came up on the “hit list”. As I said, I believe Mr. Green is sincere, but perhaps out of touch with the reality of how things work in some of his stores.
This could have been an interview with Chick-Fil-A’s founder S.Truett Cathy. Both companies are God honoring, do it right because it’s the right thing to do companies and benefit from the enormous good will it provides and the loyal following of customers turned fans. I always enjoy these kind of interviews and look forward to reading more.
I love Hobby Lobby. But please explain why a retailer would be PROUD to say they raised full-time wages to a minimum of $11.00/hour? At that rate, a full-time employee working 40 hours/week for 52 weeks would earn a total of $22,880 in a year. The 2010 Federal poverty guidelines for a family of four is $22,050. So hopefully no employee is actually trying to support their family at that rate of pay. Or maybe most full-time employees at the store earn more than the minimum. Do retailers assume an employee is working only to supplement their family’s income?
In my personal dealings with David Green’s sons, I have found them to be individuals of extraordinary integrity who are deeply committed to living their lives in accordance with Biblical principles. So I am strongly inclined to believe David Green is exactly who he says he is, a Christian man striving to do what is right and treat people right, despite being human and, therefore, imperfect – just like the rest of us.
In my interactions with one higher-level, headquarters executive at Hobby Lobby, I have not experienced the same commitment to integrity and respect toward others that I expected given David’s public and vocal commitment to hiring and retaining employees of integrity.
To help ensure that his employees conduct themselves with the same degree of integrity that David espouses, I recommend he begin conducting confidential surveys of his “rank and file” employees asking them to evaluate their supervisors on the basis of the values and principles David espouses, then start holding these supervisors accountable to those principles, with performance reviews and compensation tied to their actually conducting themselves in accordance with those principles.
I also recommend that David begin conducting confidential surveys of vendors and suppliers to Hobby Lobby, asking them to evaluate Hobby Lobby and their primary contacts within Hobby Lobby on the basis of the values and principles David espouses — again tying the performance reviews and compensation of Hobby Lobby personnel to their actually conducting themselves in accordance with those principles.
Doing these two things will help reduce the gap between David’s espoused values and the conduct of his employees, thus improving the character and performance of his employees, making Hobby Lobby a more enjoyable place to work and conduct business with, and improving Hobby Lobby’s “organic” reputation in the world – something increasingly important in this day and age of blogs, social media, and viral communication.
The majority of retailers don’t care at all about what the employee needs to survive. Most people working retail at stores like that are high school or college students just trying to scrape up a few bucks. The ones that have been working there for a few years and are in management positions are able to earn more than that. Those are the people that are more likely to be living off that pay. I worked at Justice selling little girls clothes for a while and their company policy is to start you off at whatever the state has set for minimum wage. I wasn’t supporting a family, but $7.15 and hour isn’t too fantastic in any situation. I love $11/hour.
It’s great to read comments by a Christian leader, and particularly in retail. I believe one should keep in mind that David Green’s comments about Hobby Lobby reflect his own personal drive, and are not necessarily dictated to, nor even believed by, his management. One real test is whether those below him honestly believe in what Hobby Lobby is all about, or do they choose to “create” their own company within a company. Staying with the Christian theme, you only need to remember all of the differing points of view Moses faced while leading the Israelites to the Promised Land.
This is a great glimpse at someone who makes us proud in Oklahoma.
I love to see this kind of attitude from a company. Profit is paramount – sure, but many companies are learning that employees are customers too. A great way to make raving fans is to start with your employees. Help other people get what they want and you’ll get what you want.