Throughout his 16 years as chief financial
officer with Interface Inc., Dan Hendrix
worked hard growing the flooring company through a series of acquisitions, some of
which nearly doubled the company’s size.
But after taking over as president and CEO
in 2001, he realized he needed to get rid of
nearly everything he had built.
The company had traditionally provided
modular carpet tiles and other flooring to
the office market, but when that market
went down about 35 percent in 30 months,
he knew he was facing a problem.
“We had a lot of internal things going on
that were positive, but we had an outside
marketplace that had turned almost into a
depression,” Hendrix says.
Interface had net sales of more than $1
billion in 2000, but Hendrix saw that number drop the following year, and it would
hit a nadir in 2002 at $745 million. What
once was a profitable company turned in
increasing losses, sinking to an $87 million
loss in 2002.
“When the office market turned down, it
really exposed that we had some businesses
that were not even going to earn their cost
of capital, and we were highly leveraged,” he
says. “We had $550 million in debt, so it was
almost that you really knew you had to get
out of these businesses because they were
not going to return their cost of capital, and
you had to reduce your debt.”
With that kind of a situation, he realized
that Interface needed to change if it was
going to survive this downturn. He set out
to create a new strategy, get the right people to help him with that and then move
everybody forward to calmer waters.
Hendrix says, “Once you have the right
strategy, you create the right milestones
and the right people and the right tools,
then it’s really about execution.”
