Ferguson's dawn of a new era
Ferguson Enterprises made a major news splash in late March with three announcements, including its first-half fiscal 2017 performance, the name change of parent company Wolseley plc to Ferguson plc, and the retirement of CEO Frank Roach and the naming of COO Kevin Murphy as his replacement as the company’s sixth CEO effective Aug. 1. Roach started with Ferguson in 1976 as part of its employee training program, while Murphy, the company’s COO since 2007, has been with Ferguson since the national distributor purchased his family’s business, Midwest Pipe and Supply, in 1999.
Supply House Times traveled to corporate headquarters in Newport News, Va., recently to speak to Roach and Murphy about the seamless leadership transition, what the future holds for Ferguson and the company’s thoughts on the current business environment.
Frank, what factors went into your decision to retire?
FR: I felt like the time was right. We have a very good succession plan in place at all levels within the organization. The team has us well-poised for the future. Ferguson is in a really good place right now and that will continue to occur in the future.
Kevin, what does it mean to be named Ferguson’s new CEO?
KM: It’s extremely humbling for anyone to have this opportunity, especially to have come in through an acquisition. This speaks volumes to what Ferguson is all about. If you look at the entirety of the company, it’s about internal succession planning and people development. Our associates will say we are a great supply-chain company and a great sales organization, but the heart and soul of this business is people-development. That internal succession planning is part and parcel to who we are. With the way customers are changing and the onset of technology and the disruptive business models out there, it’s an exciting time to be part of Ferguson.
What does Kevin bring to the table as the next CEO?
FR: Kevin brings energy, focus and experience and a lot of talent. He will bring a different perspective, which is good and healthy. We will continue to enjoy growth and improvement in the future under Kevin’s leadership. He’s strengthened by a very good leadership team that will help and support him in those efforts.
How do you see Ferguson currently positioned in the PHCP-PVF marketplace?
KM: When you look at it from a size perspective, we’re coast to coast and border to border with 1,400 locations, but you also will see we are very much a local and regional company with national scope. We want to make sure we are an active part of the distribution community and we are providing the best path to market for our suppliers in the local marketplace. We look outside our industry and benchmark ourselves against what best-in-class companies do throughout any industry in areas such as supply chain, technology, human resources and people development.
Ferguson reported more strong numbers for the first half of fiscal 2017. What do you attribute that to?
KM: The last couple years we’ve had a significant structural change in our company. We’ve made sure we’re focused on the unique needs of our customers. We’ve become more involved in markets such as fire and fab, waterworks and appliances. We’re fine-tuning what that delivery mechanism is. We’re making sure we have the right entrepreneurial spirit in the local market and making sure we are the best path to market for our vendors and are being the best caretakers of our associates’ careers while at the same time making sure we can deliver nationally on a brand promise of being strong coast to coast and being consistent so our customers can count on us.
We want to be relevant in everything from underground water and sewer infrastructure all the way though finished plumbing and then the MRO to keep the building running. Being relevant in the total infrastructure of our country is important to us and valuable to all stakeholders.
FR: It’s how we go to market and the focus we have on organic growth. We’ve also brought in some very good acquisitions. Our associates have adapted very well to the structural changes we’ve implemented over the last 2 1/2 years. We are seeing the benefits of how we go to market differently and we are reaching some of those goals and expectations we outlined. Those aspirations are becoming reality.
Frank, what are you most proud during your time as CEO?
FR: Watching good things happen to good people. I’ve been here long enough to see people grow, develop and become very successful. I still get excitement and joy when I see the young trainees and the young people coming in and what they bring. It’s always been about the people and that’s why I’ve been here so long. I’ve been with Ferguson now almost 41 years and always say I’ve been with a different company each year. That’s because our associates have put us in a special place.
What does the future hold for Ferguson?
KM: You will see the continued focus on the balance of same-store sales growth, new store openings and acquisition growth. Inside acquisitions, we’re looking for companies that are good cultural fits for Ferguson long-term that can develop and offer some unique ways to go to market with technology and skill sets that marry up with us as well as geographically. We always work toward above-market growth. We are a publicly traded company. Do we need to do that for the investment community and the vendor community? Of course. The real reason we grow and try to grow faster than the market is to make sure people have an opportunity here to have a bigger sphere of influence. If they have opportunities, then it provides a career and not a job and we’ll have an ongoing good succession plan.
Where do you see the PHCP-PVF marketplace right now?
KM: We like the environment right now. We’ve had a couple good and stable years. It’s been consistent. Our markets have been more robust than the national economy and we see some good and consistent growth going forward. We also see the needs of the customer changing. We have to make sure as part of the wholesale supply chain that we deliver on those experiences. It’s an exciting time to be part of the industry and we see good years ahead.
This article was originally titled “Dawn of a new era” in the May 2017 print edition of Supply House Times.