WE GO BEYOND THE HEADLINES
Each week, Sunday Business Editor Henry Unger has a candid conversation with a local leader as part of our commitment to bring you insightful coverage of metro Atlanta’s business scene.
Dan Hendrix has spent 30 years at Atlanta-based Interface, first as a numbers-cruncher and now as its CEO. In the interim, he's seen the carpet tile manufacturer grow from $57 million in annual revenue when it went public in 1983, to $932 million today, as sales expanded globally to more than 100 countries.
Hendrix, 58, learned his craft from Ray Anderson, the company’s late founder known for promoting the use of recycled materials and cutting the manufacturer’s emissions, beginning in the 1990s — long before the word “sustainability” became fashionable in the corporate suite.
Over the years, Anderson entrusted Hendrix with more and more responsibilities — experiences that helped the trained accountant become CEO in 2001. Hendrix discusses how he grew into his leadership role.
Q: After graduating from Florida State University, you went to work for an accounting firm in Atlanta. What happened there that led you to Interface?
A: When you look at the profession of accounting, there's really not a lot of teamwork. It's all individual efforts to climb up the corporate ladder. How you succeeded in the consulting world was that you really had to find the right mentor, the right sponsor who will actually pull you up the ladder with them.
I learned how important it was to have the right sponsor to get the right clients, so you could get promoted quicker. I met some really good clients like Interface. I did the company’s audit for five years and was the audit manager when they went public in 1983.
Ray Anderson had a vision that it was going to be a $1 billion company in 10 years — from $57 million in revenue then. He was going to use the proceeds from going public to bring carpet tile global. Right then, I realized that there was a huge opportunity.
One of the lessons I’ve learned is that when the opportunity presents itself, you gotta take it. You gotta walk through the door.
So, I walked into the CFO’s (chief financial officer’s) office at Interface and said, “It’s about time you hired me.” I had turned him down twice before.
Q: You were quickly challenged at Interface with unfamiliar assignments. What happened?
A: There was a lot of opportunity because the company was going to grow. We only sold in two countries and now we sell in over 100.
I got presented a lot of things that I never did before. There were only five people on the top executive team. I went in as the financial manager, but Ray quickly entrusted me with raising capital and doing mergers and acquisitions that doubled the size of the company. I also got responsibility for HR, planning and scheduling, and other functions.
You make a lot of mistakes and you learn from them. When you’re entrusted with a job that’s bigger than you are, you have to go out and seek advice.
You talk with people who are doing HR in other companies. With mergers and acquisitions, I learned a lot from the lawyers. And the investment bankers taught me how you go out and raise money.
One investment banker helping us raise capital on Wall Street told me, "You can't be Danny any more. They're not going to give you any money. New York is not going to trust a Danny from Georgia. You have to change your name to Dan."
So right on the fly, before going on the road to raise capital, I changed my name to Dan.
Q: Aside from shortening your name, what else did you learn about mergers and acquisitions?
A: As the CFO of Interface, I bought 29 companies. We got into other businesses, including installation.
As the CEO starting in 2001, I bought none. When I took over the company, we were only 40 percent carpet tile. I remember telling our board we’re going to become the carpet tile company and get out of these other businesses.
I either shut down or sold $500 million in revenues from 2001 to 2007. I made the acquisitions as CFO and got out of them as CEO. Ray did not want me to do that, but I followed my own footsteps.
What I learned was that we held on to those acquisitions way too long. There’s a time when if they’re not part of your core business, you should get out of them. All but one of the acquisitions were standalone businesses that had very little synergy in the marketplace with our (carpet tile) customers. Acquisitions have to be core to your business and create value for your customers.
Q: Business experts are split about whether CFOs make good chief executives? What’s your take?
A: The transition from CFO to CEO is a real hard one. If you come from a financial background like I did, marketing and sales is not intuitive. It's not your comfort zone.
You really have to learn it by hanging out with sales and marketing people. You have to get engaged — not delegate that work, which you could do as a CEO.
I think I’m a natural salesman — you can’t raise money on Wall Street and not be a salesman.
But you have to learn — what’s a brand? What’s marketing? You have to go out and appreciate all the intangibles. You have to go out and talk with customers and sales people.
Q: What’s your best advice for college students today?
A: One of the things I learned in college was that grades count. A lot of kids today don't realize that when they go into their college life. I have two of them. One of them made really good grades and one of them didn't. They don't take it as a job. They don't take it as seriously as they should.
If you’re going to be successful, you’ve got to get that first break, that first interview. A lot of that has to do with whether you’ve got the right grades or not.
Grades are not an indication of how bright you are. But they are an indication of how committed you are and how committed you’re going to be down the road.
Also, the one thing I look for in an employee is the person who can see in three dimensions. They can see the problem and the other side of the problem. So when you give somebody a project, they come back with a bigger solution. They give you other possibilities that you didn’t ask them to explore.
Those people are rare. But when you find them, they are really important for your organization.
