From the Corner Office: Anything Is Possible

The words of OfficeMax Chief Executive Officer Sam Duncan’s early mentors remain close to his heart, helping shape core values that fared him well as he ascended the executive ranks and led through turbulent times.

The son of a sharecropper in rural Arkansas, Duncan’s parents separated when he was young, and his mother moved him to California with $400 to her name. When he started his career in 1969 as a courtesy clerk at a Southern California Albertson’s store, “I knew I had to work hard,” Duncan says.

His first mentor was Albertson’s store manager Dale Jackson, “who told me at 16 that if I kept up with my same work ethic that I would be president of a company some day. I will never forget him as long as I live.”

His mentor’s prediction came true. After gaining experience at Albertson’s, Duncan took a vice president’s position with Fred Meyer, a major food and general merchandise retailer. Kroger acquired the company in 1999, and Duncan was appointed president of Fred Meyer in 2001.

Another mentor was Bob Miller at Fred Meyer. “He told me that as I was going up in the company ranks, I should remember to be honest, even if it hurts. That has meant so much to me, especially in the business environment today. I wish more people had that same philosophy.”

After a stint at the helm of ShopKo Stores Inc., a $3.2 billion general merchandise retailer, Duncan became president and CEO of OfficeMax in 2005. At the time, the nation’s No. 3 office-products retailer was in the middle of a merger with Boise Office Solutions and was a “very confused organization,” he says. “Some very negative press had beaten down our people,” Duncan says. “We had a proxy fight going on and a shareholder lawsuit. A group of dissident hedge funds were trying to get our company sold. People were hanging their heads. It was a real birthday cake.”

Duncan moved quickly to try to learn as much as he could and to make tough decisions, such as closing one of two corporate offices and selling off bad retail real estate, while keeping affected employees in the know as much as possible. Duncan also sought to bridge the chasm between employees. “In a merger, both sides try to determine which culture is going to win out. It was really like the Hatfields and McCoys. I was very upfront with everyone that I wanted neither the old OfficeMax culture nor the old Boise Office Solutions culture.”

Introducing his personal core values helped. “I was pleasantly surprised about how fast our employees embraced the company core values. The employees needed that, were looking for that,” Duncan says.

“Integrity and accountability” were at the top of the list of values, he says. “I’m not going to run an organization without either. Taking unethical shortcuts, even with the best of intentions, never works in the long run.”

The rest of the OfficeMax values statement included “teamwork and trust,” based on Duncan’s years at Albertson’s (“The company trained us to work as a team and trust each other,” he explains). Other tenants include “think company and customer first,” “focus and discipline” and “sense of urgency.”

“I tell people, ‘If you are trying to work on today’s or tomorrow’s problems, you are too late,’ ” he says. “You have to read and anticipate trends.”

Duncan also focused on building a diversified workforce. Born in the South, growing up near an African-American sharecropper family, Duncan witnessed firsthand “how ugly some people can be treated,” he says. “Everybody in this world deserves a chance—I don’t care what their gender, race or sexual preference is.” In 2009, Duncan was honored by Diversity Best Practices with the organization’s 2009 CEO Diversity Leadership Award.

The toughest immediate challenge for Duncan, however, was dealing with the dissident hedge funds, he says. “I knew the organization itself could be fixed. When I visited with the hedge fund groups, they just didn’t have any trust or confidence in us, and thought that we were at the bottom of the food chain. Those meetings made me even more determined to make this company a success.”

Meantime, Duncan walked the floors of OfficeMax outlets learning and directing change. When initial customer studies showed the customer base was predominantly female, he replaced the “hospital white” store walls with shades of color and initiated changes in product offerings.

“Sometime in the first six months, I was in a Chicago-area store with one of our district managers, who had an attractive red attaché case,” he recalls. “I noticed that all of ours in the store were black, black and black. And if you liked that, we had more black. We had nothing with flare for the female consumer. When I asked the district manager where she had gotten hers, she turned about eight different shades of red. She had purchased it from one of our competitors. I couldn’t blame her for it; we had nothing for her.” OfficeMax soon would.

Determining the company was lacking in financial discipline, Duncan worked with officials at the University of Notre Dame Mendoza College of Business to set up a program on economic value-added policy; he wanted OfficeMax people to be more aware of variables affecting corporate performance. Duncan attended the two-day training with most of the 1,400 people who attended over the course of a year and a half. “It was amazing. They’ve been a tremendous help to us, and important to our turnaround.”

Despite the recession, OfficeMax has turned around in the five years since Duncan’s arrival. “Our people are very proud of what we have accomplished,” he says. “Analysts are writing a lot of good things about how we’ve gone about transforming the company in the right way.”

Duncan doesn’t take OfficeMax’s success—or his own—for granted. And he tries to share that with others, particularly young people. “I love going to talk with children involved with Youth Technology Core, which helps inner-city and rural kids learn computer skills,” he says. “They kind of think that CEOs are born into their positions, but after hearing me talk, they can associate with where I came from and where I’ve gotten. I talk about having a strong work ethic and integrity, and how they can achieve anything in this world. What they really want to know is that there is hope.”

After a local OfficeMax ceremony honoring good teachers in Puerto Rico, Duncan was particularly moved. As a result, the company’s “A Day Made Better” program now surprises thousands of teachers who go above and beyond with more than $1,000 in classroom supplies
each year.

Duncan announced in February he will retire next year. The 58-year-old executive, whose formal education is limited to a couple of years at a community college, already is working with a counselor on plans to earn an undergraduate degree and pursue a master’s when he leaves.

“You know, I don’t care about being remembered as a good or great leader,” he says. “I hope people just say, ‘Sam cared about every person in this company, not just the top executives. He cared about me.’ That would make me very happy.”

Until his departure, he will keep pushing his company to improve. And, of course, promoting his message of hope and that anything is possible.

“I have a very soft spot whenever I go to talk to kids at an inner-city school or enter a grocery store and see a clerk,” he says. “I see a Sam Duncan in every one of them, and I just hope and pray that every one of them is given the same opportunity as I was.”
 

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