In 1982, Ken and Diane Hendricks purchased three branches and founded ABC Supply Co. Inc. Their goal was to provide roofing contractors with the products and services they needed and treat them with the respect they deserved. The concept was simple, but the business plan was ambitious: They wanted to set up a nationwide distribution network that would fundamentally change the supply chain in the roofing industry.

Today the company has more than 450 branches in 45 states, nearly 7,000 associates, and approximately $4.8 billion a year in sales. Headquartered in Beloit, Wis., ABC Supply is still privately held and family-owned. On the company’s 30^th anniversary, Diane Hendricks, ABC Supply’s co-founder and chairman of the board, and David Luck, its chief executive officer and president, looked back at the history of the company as well as at the road ahead.

Filling a Need

Ken and Diane Hendricks were operating two successful companies in Beloit during the 1980s — International Roofing and Hendricks Real Estate Properties. As roofing contractors, they had two major frustrations: They couldn’t always find the products they needed, and to top it off, they felt they weren’t treated with respect by their suppliers. It was something Ken Hendricks had experienced firsthand growing up with his father, a roofing contractor who taught him the trade, and it persisted when he ran his own roofing business.

“Throughout our history as contractors, we didn’t feel we were respected,” Diane Hendricks said. “If you said you were a roofing contractor or a roofer, there was just that perception — that roofing contractors were uneducated, unskilled — and it was the wrong perception. It’s a hard job. It’s a dangerous job. And it wasn’t a highly paid job. It really got to us — that stigma we just couldn’t get rid of.”

At the time the roofing industry was highly fragmented, and it was often difficult to find materials that were specified. “It was basically a broken supply chain,” Diane Hendricks recalled. “Many products were supplied by the manufacturers direct to the contractors. It was just the wrong way to put together a supply chain, especially when something went wrong and the solution or alternative was not available in the local market.”

As Ken and Diane Hendricks explored ways to solve those problems, they realized the situation posed a huge opportunity. “We’d been together for about 15 years before we started talking about the need for a distribution chain,” said Diane Hendricks. “I remember looking at a map — I wish we had kept it — where we sat and we looked at populations and put circles around cities across the nation. That’s how it started — real simple. We were going to build a distribution chain, and we were trying to do it independent of the manufacturers.”

They faced numerous challenges. Foremost among them was acquiring the capital they needed to make acquisitions. “Our confidence in our plan and our passion for our plan was worth so much, but the challenge of coming up with the capital and putting together a business plan that could finance the aggressive growth we wanted was by far our biggest challenge,” she said. “For years we were changing banks like we changed our suits. We scared the banks. ‘Entrepreneur’ was a word people were just getting used to.”

Somehow they found a way. “We had a mission, we believed in ourselves, and we had that passion,” she said. “I believe passion is one of the biggest values that people must have in order to go after something and then to be able to persevere through all of the negatives you’re going to be faced with. That’s how you end up winning — with passion and perseverance. And Kenneth and I had a lot of that.”

Balancing Business and Family

In the early years, Ken and Diane Hendricks were running several businesses while they were raising a family. “They might have been the best years because they were so exciting,” she recalled. “They were gut-wrenching, but they were exciting. We had fun. And it was rewarding because we knew we could make a change — a positive change.”

Both had been married before. Ken had four children from a previous marriage, and Diane had a child from her previous marriage. Then they had two more children together. Five of their children later joined the company and they all hold key positions today.

It was difficult to balance work and family life, said Diane Hendricks, but they simply had to do it. They had no choice. “We ate dinner as a family every single night,” she said. “It’s kind of the old-fashioned way, but I’ve got seven absolutely beautiful, responsible children that lead beautiful, responsible lives. I don’t know how we did it. We wanted it to turn out like that, with structure and setting an example of hard work and still setting aside time for family.”

About 10 years after founding the company, Diane Hendricks felt ABC Supply was beginning to earn the respect of the roofing industry. More manufacturers began to approach them and ask them to handle their products so they could concentrate on what they did best — manufacturing. She points to that subtle change as one of her most rewarding moments. “It was definitely when we went from being considered a flash-in-the-pan to being respected by the industry, by the manufacturers and our competitors,” she said. “And they quit calling us a flash-in-the-pan. Suddenly people were coming up and asking ‘How did you do it?’ and people wanted to come to work for us instead of being afraid to come to work for us. Hiring became a joy instead of a pain.”

“It was like we had finally made it — finally realized what we had set out to do,” she continued. “We had gotten to the top of the first little mountain. We had finally built a company that was respected — two uneducated, hardworking Americans with a passion, and we had made it.”

The Next Phase of Growth

By 1998, the company had achieved a national footprint and reached $1 billion in sales. Ken and Diane Hendricks then hired David Luck to lead the company and take it to the next level.“We put together a long-term strategic plan and determined that the next stage of this plan was to change the focus from getting ‘big’  to the idea of being ‘best’,” he recalled. “To accomplish this, we put together a plan to improve our business systems, infrastructure and organization to catch up with our growth.  We also needed to change the way we thought about and conducted our business. Most important, we had to shift our thinking and stop thinking that we are a ‘products’ company and start thinking as a ‘service’ company – a company that is an extension of our customers’ and our suppliers’ businesses.”

Luck found that the company culture, the quality of it associates and its readiness to change exceeded his expectations. “All great companies have to adapt and change or they will die,” he said. “Our approach was to lay out a plan that honored and built on the past success as well as changing what was necessary for our next stage of growth. Quite honestly, ABC has always been a remarkable company in its ability to change, and that was a pleasant surprise.”

Hitting the first billion and then $3 billion are memorable events, but Luck points to the “strategy” devised to improve the bottom line. “This strategy was to invest in our people first by giving them the knowledge and tools to do the job and empowering them to do what it takes to provide the best service to our customers,” he said.  “We believe that this has driven our growth, and today our bottom-line performance  is probably the best in the industry.”

Additionally, this employee-first approach  has paid off by helping the company thrive  in the current economic downturn. It also helped finance the acquisition of Bradco Supply in 2010. “We’ve found ways to grow,” he said. “Certainly the Bradco acquisition was a major milestone. It’s had an extraordinary payback for us. The people that were with Bradco were even better than we had anticipated. We thought they were good, but they were even better. We’ve been blessed to have them on our team. The synergies that we identified during the acquisition process have been exceeded and today we continue to discover even more opportunities. It was one of the easiest integrations we’ve ever done. It was accomplished six months ahead of schedule and there were virtually no hiccups. The payoff for this has been very quick and it has just been a pleasure.”

A Tragic Loss

The company persevered through its darkest hour — the death of Ken Hendricks in an accident in 2007. “Losing my husband was devastating,” Diane Hendricks said. “Losing my business partner was a dimension I couldn’t even fathom. I’ve just lost my husband, and then there is the realization that I still have a business to run. I had to make decisions within a week.”

She says she never thought about selling the company. “A lot of people thought that I would fail, that I would fold it up, that I would sell it within a year,” she said. “But that wasn’t ever something that I wanted to do. I had been involved in building a company with Ken, and I am still building a company.”

Diane Hendricks credits her entire team for helping guide the company through this difficult period. “Ken and I have always surrounded ourselves with great people,” Diane recalled. “We knew what our weaknesses were and our children brought a lot of skill and education and ability when they came on board, and we hired the best we could hire. I still believe in that. I’m not afraid of hiring people who can do everything better, and so I had a lot of great people around me that I still rely on daily.”

The recent recession has added its own set of challenges that made the loss of Ken Hendricks even more difficult. “But we’ve survived. ABC is strong,” she said. “It’s been difficult not only for me, but for every one of my associates, all my family. It’s been tough. It still is tough. But the results are that ABC has absolutely persevered. We’ve more than doubled in size in those four years. So it’s been challenging, but we are persevering.”

An Enduring Legacy

Diane Hendricks and Luck recalled how ABC Supply looked back on the wisdom of its co-founder to find direction after his death. As they spoke to associates throughout the company, they realized that when Ken Hendricks spoke, he had concentrated primarily on the core values of the company. “He seldom talked about the numbers or the results, but focused on the vision of the company,” Luck said. “And then we realized that we had never documented those core values because, quite frankly, we’d never had to. We had Ken.”

They decided to try to put the company’s core values into words. “Most people believe in the same core values that Ken and I believed in, but we took the time to put them into simple words,” said Diane Hendricks. “And they are: Respect. Opportunity. Work Hard — Have Fun. The Entrepreneurial Spirit. Family. Give Back. And American Pride.”

At the next national managers’ meeting, the focus was solely on these core values. “In effect, we had to transfer ownership of these core values from Ken to each of us,” Luck said. “Today, in everything we do we lead with our core values.”

“Ken’s legacy in this industry is really key for contractors to try to grasp onto,” said Diane Hendricks. “If you incorporate those values into how you live your life at the workplace and in your private life, it’s going to make a difference in your life.”

After all, those simple words ultimately helped reshape the roofing supply chain, said Diane Hendricks. “We wanted to change the industry. We wanted to bring respect to it. We wanted to give the roofing contractor the tools to be able to do his job more safely, more efficiently, more professionally, and to go home at night and feel good about what he had done — and, to make money! I believe every small contractor today is glad the have a partner in ABC Supply, or a competitor that is like an ABC Supply. I think they go home at night and they’re proud, and they’ve made a good living. The plan – our vision for our industry – has worked.”

 Luck recently announced that ABC Supply’s next phase of strategic growth would include goals of $7 billion in sales and 700 locations. He also expressed his gratitude for everyone who has helped make the vision of Ken and Diane Hendricks a reality. “I want to thank all of our associates, all of our people over the years for their amazing support and dedication to the company,” he concluded. “I want to thank our customers for their support and loyalty in business. And I want to thank all of our suppliers for allowing us to represent their products in the industry. It’s been a great ride. We hope we’ve been a good partner, and we are really humbly appreciative of all of them.”