By Al Wahnon
(Last in a series) Bob Shaw is a modern day alchemist. With sheer determination, a glimpse of what he wanted his future to be, and the business acumen he acquired along the way, he transformed a small dyeing operation into a vast floor covering enterprise. Shaw Industries has approximately 30,000 employees; more than 70 manufacturing facilities in seven states that encompass 32 communities; 31 regional distribution centers across America; one of the largest private trucking fleets in the country; a product range of more than 25,000 styles and colors, and annual sales approaching $6 billion. His record is unchallenged, his achievements unequaled and his storied career unsurpassed.

His business philosophy explains his single-minded focus on the success of the company and less concern with his personal gain. “I think the most important decision I made was that we were going to build a business rather than build personal net worth; the personal net worth comes after you build the business, not before. That was a big advantage Shaw had, because most people in those days were building a business and selling the business, and taking their money and running. We had a big edge because we were there on a permanent basis.” He paused for a moment and added, “We had a different purpose. If you look at all the businesses that were started in Dalton during what I call the ‘Gold Coast Time,’ it presented a great opportunity because we were competing with people who didn’t have the experience we had.” From the very beginning Shaw was in for the long haul and he relied on his extensive experience and remarkable insight to be the acquirer, not the acquired.

That was the best decision you made, what was your most regrettable decision? “Probably no major ones. You always ask yourself that question. Who knows. I spend very little time looking at the roadway behind me. I couldn’t do anything about the failures, so I didn’t concentrate on them. Over a 50-year period, you have a bunch of things; there’s no one major. We had nothing occur that changed our course on becoming what we decided to be—a world class company.”

Since the carpet industry turned from weaving to tufting, from wool to synthetic fibers, Bob Shaw has been the most influential force in shaping its course and bringing it to prominence in the modern era. Aside from his innovations and elevating industry standards, he is credited with beginning the consolidation that drastically changed the landscape of the industry and helped make Shaw Industries the colossus it is today. Did he ever regret buying a company? “It’s like having your own children. It’s too late to get rid of them once you have them. So you make them work. We all make mistakes, but we try to correct them as quickly as possible.”

Not all of Shaw’s strategies worked out favorably, but most did. I asked him which initiative brought results far beyond his expectations? “I’m going to set Queen aside because that was more of a partnership type of thing, and that wasn’t in recent history—nine years ago. I think our decision to move into direct selling and form a national distribution for carpet—that was the best decision we made. It allowed us to offer a service our competitors weren’t able to offer. I think we do business with 35,000 to 37,000 dealers now, and we could decide how we go into partnership with the small dealer as well as the large dealer.”

Shaw celebrated his 75th birthday in August and the following month stepped down as CEO of the company—a milestone in a career that spanned 48 years. That prompted the question: Looking back almost a half century, who influenced you most in your career? He thought a moment and responded, “Probably someone who wasn’t in the carpet business. In the early, early stages, how somebody conducted his life was a lot more impressive than how much money he made or didn’t make. My dad died early, when he was 63 years old. He had the little Star Dye Co.; that’s the way I got back to Dalton, to run the company, which was doing $300,000 a year in scatter rug dying. Then you have the Lamar Prescotts of the world, who was one of the founders of Cabin Crafts, and the Bob McCamys—they were the generation before me. And you looked up to them because they were successful. Fred, Lamar and Bob McCamy started Cabin Crafts and we ended up buying the company.

“So, I guess you’d have to say that some of the real entrepreneurs of the early carpet industry influenced me. They were hard to separate, because some were successful in building net worth but none were very successful in building a business. I’m talking about the Barwicks, the Burnetts, you can name them as well as I can. They never really built a business. They did quite well when they were in the carpet business. Let’s don’t knock getting rich, I think everybody works for money, eventually it’s just when do you draw down. I mean, what is your purpose? Is it to build a business or to build your own personal net worth? Normally, one comes with the other, but at a different time. What motivates me more than anything else is competition. Most of our heroes are in sports, aren’t they. The Tiger Woods, the Arnold Palmers in golf, and the famous quarterbacks—those are men’s heroes. We’re designed to compete, and the truth of the matter is, if you don’t want to win, you don’t want to be in business.”

Shaw had a unique vantage point atop a $6 billion company, so I asked where he thought the industry would be in five or 10 years? “I see a very healthy industry. I think we’ll have some foreign competition in probably the rug business, but I don’t really see foreign competition coming in as far as broadloom is concerned. It’s too big a service, too many stock keeping units, too much change in styling and such. It’s not boxing up white shirts; you could put them in a box, send them over here and put them on a shelf. So you have a moat built around you for the broadloom portion of the business. I think in the hard surface end, we also have some big advantages in distribution. Take ceramic tile, it’s a very heavy material and trying to transport the product all over the country becomes a freight nightmare.

“I think there are some synergies in laminate and hardwood. We’ve got some great names in our industry, such as Armstrong; it fell on hard times with the asbestos issue, but it survived. When you add up the whole floor covering industry, you’ve got a wholesale business that approaches $24 billion today. I don’t know what your figures show, but the domestic floor covering business, dollar-wise, is still growing as an industry. I think we are cyclical, or at least some of the business is. We have a counter-balance in carpet because apartment replacement business gets to be much better in carpet; apartments go up as housing finishes come down. And then there’s the commercial end of the business, and it follows the economy pretty well. So, I see a very healthy industry. I think it’s going to grow on a unit basis maybe 2% to 3%, keeping up with inflation, but in dollars, I think it will grow 5% to 6%. I believe we’ve passed the time that we can continue to take cost out of the system and not raise our prices.”

Shaw does not believe China will compete in the U.S. flooring market in the next five to 10 years, with the possible exception of scatter rugs. “I think China is going to be more interested in developing its domestic marketplace than exporting products at a low cost,” he said.

I asked him what advice he would give to young people and he smiled broadly. “That’s my job right now,” he replied. “I’m available when Vance (Bell) wants to talk about things,” he laughed. “I’m not totally retired. I’m still chairman of the board, but I have no authority to do anything. I am here as a consultant to those who run the business.” He did have sage counsel for entrepreneurs: “You can’t come into the carpet business and grow without a lot of capital now. We used to have commission dye houses, commission yarns, but now it’s a capital-intensive business and if you don’t have a lot of money you don’t want to get into it. There’ll be no new entries into the carpet business, other than small carpet manufacturers who can make a good living personally because they know something about the industry or have some account structure. Put that aside and I advise anyone who wants to be an entrepreneur to find another business.”

How about young men or women starting a career, any words of wisdom for them? “I would look for a company that has a growth pattern, unless a company is growing, you can’t give me an opportunity. If a company isn’t growing, it’s going to die, I can guarantee you that. There’s momentum up and there’s momentum down, there’s no such thing as leveling.” He said Shaw Industries has trainees in all phases of the business and processes 100 a year. “We’re training business people rather than salesmen or engineers. And those people you have to challenge, because the good ones are going to leave you and you’re left with the duds. You must challenge the young people to where they’re going to have a business to run for themselves, and not limit your scope to just floor coverings. It doesn’t matter which business it is, as long as it’s run on a business-like basis.”

When you step back and look at what you created, what do you think? He was quick to respond: “I am very proud of our people. And I say this without question. I always wanted people smarter than I was to associate with so I could learn something from them. I am very proud of our organization. I think they could stand up and be counted against any organization in the United States, regardless of the size.” He also stresses the importance of location in the success of a company. “You cannot be a successful corporation without having a successful community in which to locate. So, I think it’s important that we, in fact, take the opportunities of Northwest Georgia—that’s where 19,000 of our 30,000 people live—and make sure their quality of life continues to improve. And the more successful we are at doing that, the more successful the company will be.”

A final question. How do you think you’ll be remembered? “I don’t know,” he said, “you tell me.” He is a modest man, shy and introspective, so I didn’t expect an elaborate answer. “You don’t really think about that. I have no earthly idea. I hope they believe I was honest and I was fair, and I was tough.” His legacy is far greater than that. He will be remembered as a genius, a master strategist, a visionary, a leader, a risk-taker, an innovator, and a man of courage and compassion. Bob Shaw will be remembered long after the last tufting machine is silenced.