We're helping NC companies forge a corporate culture designed to steer them through rapid growth
Hooker Furniture Corporation’s 2016 acquisition of Home Meridian International marked the start of a merger between a tradition-bound stalwart and an upstart hardwired for constant reinvention.
A family-run company based in Martinsville, Virginia, Hooker Furniture maintains a robust legacy. Since its founding in 1924, the company has prospered under a succession of just three CEOs from the family that provides its namesake. The publicly traded company—which netted $247 million in annual sales prior to the acquisition—preserves a business culture that’s relatively traditional, with a focus on customer relationships.
After the 2008 recession, Home Meridian, based in High Point, North Carolina, evolved from a manufacturer into a retail supplier that fed large accounts through contractual relationships with Asian factories. Home Meridian’s data-driven approach helped it access new markets and created the type of sales growth that made the company an attractive acquisition. Indeed, Home Meridian, which is retaining its name as a standalone unit, provided $344 million in net sales its first 12 months as part of Hooker Furniture, out of a total revenue of $577 million. Conversely, Home Meridian brought only 326 employees into the newly merged company, in contrast to Hooker Furniture’s 619 employees.
Hooker Furniture and Home Meridian continue to operate as separate units, retaining their operational bases in Martinsville and High Point, respectively.
“We’re very people-focused, relationship-focused,” says Hooker Furniture Chief Administration Officer Anne Jacobsen. “We pride ourselves on saying, ‘If it’s not good for both parties, it’s not good.’”
In contrast, Jacobsen describes Home Meridian as a “very high-technology, quick to market, very efficient supply chain. I would say less people-focused and more sales-growth focused.
“You can really tell the difference when you’re in the two offices—less so now, but more so when we first merged,” Jacobsen says.
Culture is key to successful mergers
Mergers and acquisitions are never a sure bet: A landmark study by KPMG found that 83% of corporate mergers and acquisitions fail to enhance shareholder value. A clash of corporate cultures is often at the heart of this failure.
Working with The BB&T Leadership Institute, Hooker Furniture executives recognized that getting corporate culture right would be critical to pulling off a successful union with Home Meridian.
Hooker Furniture hired The Leadership Institute to provide leadership development support soon after its Home Meridian acquisition. The Leadership Institute brought five executives, including corporate vice presidents and division presidents from Hooker Furniture and Home Meridian, to its facility in Greensboro, North Carolina, for the Mastering Leadership Dynamics program. The Leadership Institute’s team of consultants followed up with daylong subject-matter workshops, including conflict, engagement, change and strategy.
For each topic, the program began with a workshop held at The Leadership Institute’s campus. Then, a team of The Leadership Institute’s consultants followed up with site visits and individual coaching, rotating between Hooker Furniture’s corporate headquarters in Martinsville and Home Meridian’s office in High Point.
Taking the best from each culture
The give-and-take facilitated by The Leadership Institute has allowed Hooker Furniture and Home Meridian to borrow positive traits from one another, while also retaining some of the unique attributes each needs to thrive in its respective line of business.
“At Hooker Furniture, there’s an openness from our people to say, ‘Wow, we could move faster. And maybe it wouldn’t be a bad thing if we were willing to take risks more often,’” Jacobsen says.
“We’ve held firm on some things,” she notes. "They’ve said, 'If we’re not able to move fast and quickly adapt, we won’t stay in business.' We have to respect that.”
Which is why to commence the merger’s next phase, The Leadership Institute will facilitate a 1-day Leading with Culture program with 14 top executives from both companies. The program will help unify the leadership and take positive attributes from both companies to create a new culture that is effectively communicated and demonstrated by the executives.
In addition, Hooker Furniture is on the verge of embarking on the second phase of its leadership development program with The Leadership Institute. The next iteration will continue the program experienced by the company’s top echelon, but for a broadened cohort of about 30 mid-level managers with Hooker Furniture and Home Meridian. It’s part of a strategy to both recruit new talent and plan for succession.
The leadership at Hooker Furniture’s headquarters is nearing retirement, and the company needs to become more attractive to younger workers. At Home Meridian, younger employees have more options in the larger Triad labor market, and the company wants to become “a place where people want to stay,” Jacobsen says.
Don Geletko, a BB&T Leadership Institute vice president, says that in addition to ensuring a strong bench and smooth succession, focusing on leadership development gives Hooker Furniture a competitive advantage in an industry that sometimes struggles to lure talent.
“To attract top talent,” Geletko says, “they need to show they’ll invest in their employees’ careers.”
Companies are increasingly recognizing corporate culture is key to effective decision-making and, in effect, survival. In an industry undergoing a wave of consolidation, Hooker Furniture is looking to ensure its culture keeps pace with expansion into an even-larger share of the market, so it remains healthy and viable when it celebrates its centennial in 5 years.
By Jordan Green
Photography Courtesy of Hooker Furniture