An Interview with Mr. G. Richard Russell, President of Millard Lumber Inc.
By Travis Van Dyke & Michael Morrison, Creighton University MBA students
In 1948, Millard Lumber Inc., was founded by George Russell as a lumber and grain company. Over time, the company has evolved its product and service offerings and is now under the leadership of Rick Russell (George Russell’s son). Today, the company operates in three Midwest communities and employs over 200 associates. In 1999, Millard Lumber Inc., was recognized with the prestigious Better Business Bureau’s Integrity Award. To this day, the company still maintains a highly ethical organization and challenges their employees to consistently exceed customer expectations. We had the opportunity to discuss ethics, family and Midwest values with Rick Russell in a showroom floor boardroom in the Millard Lumber Inc., headquarters.
The first thing Mr. Russell stated is that Millard Lumber is a “family business.” He started doing small jobs for his father even as a child. Rick was a pre-med major in his undergrad studies but changed his major his senior year to economics. His thought was, at some point, he may come work with his father at Millard Lumber. After school, he worked in the banking industry for a small period of time before finally joining Millard Lumber. The family atmosphere of Millard Lumber is further seen as his two sons now also work for the company.
Ethics in Omaha
Mr. Russell explained that Millard Lumber primarily operates in a 200-mile radius of Omaha. And, although he went to graduate school at Northwestern, his primary business experience has been in Omaha and surrounding areas. When asked, “What moral values typify the Omaha business community?” Mr. Russell said, “Keeping your word and following through,” are very important in this area and in his business. He thinks that these traits may even be stronger in the smaller communities, than the city itself. When asked, “Why does this happen?” Mr. Russell explained that “in a smaller community, younger people may be more closely connected to their parents and their work environments.” This tends to lead to higher accountability for a young person’s actions. He
also stated accountability in smaller environments is more important. Your reputation will follow you in a close knit community, whereas an individual in a large community can “hide” from their mistakes. A child may be able to be exposed more on a daily basis to their parents’ work environment if it is located closer to home, rather than a long- distance commute in a large city. This exposure could lead to children being more invested in their parents’ vocations and give them the ability to learn values “on the job.” Clearly, as a child, he was able to learn about the business as well as his father’s ethical ways of treating customers. If his father had been a big city executive, he may not have had the same opportunities to help to develop his character.
When Rick Russell was asked if there were any ethical situations that Millard Lumber has faced that were easy to handle, one came to mind right away. A major customer that had specific prices negotiated was being charged more than they should have been for an item that they purchased often, because of a pricing error. The customer had never noticed this, but a Millard Lumber employee did.
Millard Lumber traced all of this customer’s records back as far as they could and refunded the customer the money. When asked if there was any hesitation about the way to handle this error, Mr. Russell said, “It is just the right thing to do.”
One of the harder ethical situations Mr. Russell has faced deals with fairness. For years, an insurance agent that Mr. Russell had continually done business with was trying to sell him an insurance product that Rick was not yet ready to buy. Eventually, the right time to purchase this policy came up, and it made more economic sense to purchase it from another agent that also had a long business relationship with Millard Lumber. Mr. Russell decided to ask the insurance agent he purchased the policy from to split the commission with the original agent, because the original agent had brought the idea to him.
Ethical Culture at Millard Lumber
Mr. Russell was asked how he would describe the ethical culture at Millard Lumber. After a short pause he said, “Treat others with uncompromising truth. Respect and put trust in your fellow associates.” When asked if he had a written code of ethics, we were given a small booklet. Inside, the booklet not only had a business code of ethics, it had a personal code of ethics. Mr. Russell, along with other members of his company and industry, sat down and put these values together about 15 years ago. It is given to every new employee when they complete a required orientation class. Also included in the book is a list of expectations of every employee by job type that shows an emphasis on customer service and respect. Mr. Russell thinks in addition to holding employees to a high standard, the company also has certain duties to the employees of Millard Lumber. He said, “If something goes wrong, it is easy to put blame on others, but I feel you have to trust those that you work with every day and stand behind them. If someone comes up with a great idea, they should get the credit.”
When asked if there was anyone who he considered a mentor, Mr. Russell had two responses. The first person was his father, the founder of Millard Lumber. In addition to teaching Rick the business, his father taught him to treat people with respect and to honor his word. The second response is an organization that Mr. Russell has been in for over 30 years called The Young President’s Organization. He said that there were about 10 to 12 people that he can turn to when discussing tough issues in his business in a confidential environment.
When Mr. Russell was asked about the issue of corporate CEO pay, he responded, “CEO pay is an issue, and it did get out of hand.” He further said that, “The people with the money at stake are the shareholders. You should reward management for its performance, and there is a range of reasons there, which is not easily defined.” Mr. Russell was asked if being the CEO of a closely held organization in which he, as also a significant shareholder, changed his perspective. He said it gives you a longer-term perspective if you are a manager and shareholder. He noted an example of a public company that makes decisions based on the stock price and not necessarily what is in the best long-term interest of the firm. “Alignment is the key,” Rick said.
After meeting with a person who has led a successful and ethical career for over 30 years, several pieces of advice can be learned from Rick Russell. His advice was, “Think about what your own values are, and put them out there and follow them. A business career goes by quickly, so be comfortable with what you are doing, and do something that you can be proud of.”