You’ve probably heard of CEOs rising out of the mailroom — but what about from mowing the lawn? But that’s exactly the path UFP Industries CEO Matt Missad took.
Missad, now 60, first caught the attention of executives at UFP Industries (UFPI) when he was a teenager mowing their lawns. Bill Currie, UFP’s chairman who has known Missad for 47 years, said Missad “impressed everyone” with his work ethic. And they saw enough potential to aid in his rise to CEO.
And it’s been a huge win not just for Missad, but investors, too. Missad became a standout CEO who “never gives up,” makes tough decisions and executes them, Currie says.
Build A Market Leader Like Missad
UFP Industries is one of the largest producers of wood and wood-alternative products for the retail, construction, industrial and international markets. It is based in Grand Rapids, Mich. and was founded in 1955.
And under Missad’s leadership, the company now has 184 locations in nine countries. The market has recognized Missad’s management prowess, too. Back when he was named CEO on July 13, 2011, UFPI stock traded for roughly $8 a share. Fast forward to 2021. Shares are up more than 900% since then, blowing away the S&P 500’s 250% gain in that time.
“There’s no one really like them,” said Steven Chercover, a longtime follower of the company and former analyst at D.A. Davidson. Other companies compete in “framing and construction,” but UFP has retail, construction, industrial and international divisions, he says.
“And they leverage all of these pieces,” Chercover said. Wood and construction products companies — including UFP, Boise Cascade (BCC), West Fraser Timber (WFG) and Louisiana-Pacific (LPX) — are all benefiting from the current building and remodeling boom, which is driving up demand and prices for lumber and other products.
UFP is getting more than its share of the boom. Sales rose 77% to a record $1.83 billion in the first quarter of 2021. And adjusted earnings per share hit $1.67, compared to 65 cents a share in the same year-ago quarter.
Use The Power of Connections
Missad grew up in Grand Rapids. His father worked in a “variety of factory jobs and as a garbage collector,” he said.
As a teenager, Missad started working for some UFP executives as a lawn boy. And he also did maintenance jobs at UFP, “cleaning toilets, yard maintenance whatever,” Missad said. During this time, he met Currie and Peter Secchia, former UFP CEO.
Missad went off to Hope College, financing his studies with scholarships and financial aid. But he returned home in the summers to do “projects for UFP,” he said.
When he graduated, Missad intended to look for a full-time job and work while saving money for law school. Secchia interceded. He told Missad UFP would loan him the money for law school if he promised to come back to UFP after graduation. “That looked pretty good to me,” Missad said.
Repay Your Debts
Missad graduated from Western Michigan University’s Thomas M. Cooley Law school magna cum laude. And he began working full-time as UFP’s inside counsel in 1985.
“They made me pay back the college loan, with interest,” he said. “People don’t believe that. But I did pay it back and I wouldn’t have wanted them to forgive it … a deal’s a deal.”
Over the next 26 years, Missad worked across the company in engineering, marketing, human resources and acquisitions.
“He grew through the ranks and led pretty much every part of the business,” said Ketan Mamtora, an analyst with BMO Capital Markets. “A lot of leaders don’t understand the nuances or hands-on challenges of a company, but he knows all of that.”
Seed Your Future Growth
The board eyed Missad to take the helm of UFP in 2011. But Missad “blew the first interview” with the board, Currie said.
Missad says he found it difficult to talk about problems at UFP, which was struggling through a business downturn. He was loyal to previous CEO Michael Glenn. But Currie made him come back to the board and try again. And in that interview, Missad “wowed them,” Currie said.
Since Missad took over as CEO, net sales have gone up from $1.82 billion in 2011 to $5.2 billion in 2020, a nearly 200% increase. And adjusted profit exploded more than 2,500% to $4 per share in 2020, from 15 cents a share back in 2011.
Some of the growth comes from Missad’s deal-making. The company pursued an active, but disciplined acquisition program. “They’ve done small bolt-on transactions,” said Mamtora.
Missad agrees: “Like everything else at the company, we want a return on investment. Smaller deals tend to be at smaller price points … we get good people, who care about the future of the business they’ve built.”
Chercover said: “They’ve grown into adjacent businesses, and the deals just expand the whole nucleus from which they can grow.” He calls their deals “constantly accretive … acquisitions where one plus one equals at least two and a half.”
Realign What You Do
Missad also hunts for ways to improve efficiency in existing operations, even if his top managers push back. In 2019, he decided to change UFP’s upper management structure to business-focused segments. For 55 years, UFP divvied itself up into geographic regions.
Missad says all of his top-level managers “pushed back.”
Some board members didn’t love the change either. “I wasn’t exactly in favor of it, but the board went with it,” said Chairman Currie. “However, everyone will now tell you that the restructuring transformed the company.”
Missad says that the onslaught of opposing views has been one of the most eye-opening nuances to being a CEO. “My whole career I’d been an advisor to CEOs and often I thought I’d given good advice and couldn’t figure out why it wasn’t taken,” said Missad.
“Then when I became a CEO, I realized you’ll have five or six people giving you their advice and none of it’s the same,” he said. CEOs must carefully weigh which advice to take and which they discard.
Make Work Fun
The company has a “work hard, play hard culture,” says Currie. And employee retention is very high. “We hardly ever lose a person,” he said.
All of Missad’s senior team has been with UFP “20 years or more, which is highly unusual,” Currie said. That’s because the company is like a family: “We’re not afraid to have difficult conversations with one another,” Currie said. “You don’t advance anything if people just tell you what they think you want to hear.”
Missad says he likes to hire “competitive people who want to succeed and have something to prove to themselves or others.” But he admits he’s a “reformed micromanager.”
“Sometimes you hold on too tight and smother people,” he said. “I’ve learned that you need to be respectful … let people lead, let them blossom. We don’t want any major mistakes, but we have to allow people to make small mistakes.”
Teach The Next Generation
Missad knows others took the time to mentor him. And he’s also educating UFP’s workforce. UFP recently stopped requiring an undergraduate degree for management positions, says Missad. And in 2016 it started its own two-year business school.
“We’ll have 25 students starting this fall,” he said. The free educational program with online and in-classroom courses is funded by the company and donors, mostly executives and former employees. Courses are taught by UFP leaders and managers.
“It gives you a business administration degree with all the education of a four-year school, without the campus-builders,” said Missad, meaning the UFP school doesn’t offer curriculum and sports activities that fund college expansion, like other schools do, but which may be “out of touch” with students’ academic needs.
He said that UFP continues to believe in “promoting from within.” He’s evidence of that. “You can start at the bottom and work your way up,” Missad said.
Missad’s Keys at UFP Industries
- CEO of UFP Industries since July 2011. Turned company into a high-growth leader in the wood and building products industry.
- Overcame: Lack of resources from a humble start in life. Tapped his own ambition, drive, connections and college loans from UFP Industries.
- Lesson: “Sometimes you hold on too tight and smother people. I’ve learned that you need to be respectful — let people lead, let them blossom.”
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