Business

From $4.35 an hour to the C-suite: Getting to know the new CEO of Lowe’s

Lowe’s CEO Marvin Ellison
Lowe’s CEO Marvin Ellison Courtesy of Lowe's

Marvin Ellison’s first job in retail was as a part-time security officer at a Target store in Memphis when he was a junior in college. Ellison, the middle of seven kids, grew up in in Brownsville, Tenn., a small town about 60 miles northeast of Memphis. Ellison’s father often worked several jobs to make ends meet, so he didn’t want to burden his parents by asking for money.

Ellison, who took the helm at the world’s second-largest home improvement retailer this summer, made $4.35 an hour, enough to help pay for books and other expenses at Memphis State University.

Ellison’s foray into retail wasn’t exactly intentional. But Ellison describes that job as “the best thing that ever happened to me.” That’s not only because it would lead to another 15 years with Target, but more importantly, Ellison says, his time as a rank-and-file employee helped shape how he operates now as the CEO of Lowe’s.

Ellison came to Lowe’s at a critical juncture for the Mooresville-based home-improvement retailer: It’s been working to catch up to its larger rival, Home Depot, for years, but still lags behind. Ellison acknowledges that he has his work cut out for him. But he sees Lowe’s more as “a transformation ... not a turnaround” like J.C. Penney, where he spent the last three years as CEO.

“Today Lowe’s is a very good company in every sense of the word, but we’re trailing our major competitor, and we’re trailing other world-class retailers from the perspective of some of the modern things,” Ellison said. “But we’re going to be a great company.”

In a sit-down with the Observer this week, Ellison, 53, a father of two who moved his family to south Charlotte this summer, discussed some of the changes ahead for both Lowe’s stores and the corporate office in Mooresville, corporate responsibility and life in Charlotte.

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Low-hanging fruit

Ellison, donning an iconic red Lowe’s vest, spent his first 100 days on the job visiting over 50 Lowe’s store nationwide in order to get to know the culture firsthand, and identify problem areas, or “low-hanging fruit” that could easily be addressed.

Unpopular products gathering dust on the shelves, for instance, needed to be cleared and replaced with in-demand items and brands, Ellison noticed.

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Lowe’s store on McMullen Creek Parkway in Pineville Observer file photo

Retooling inventory is one of the “retail fundamentals” Ellison says has to be addressed first.

In recent years, Lowe’s has been cutting costs and working to boost profits at a time when home improvement retailers otherwise have been benefiting from the strong housing market. In a meeting last month with Ellison, Credit Suisse analysts noted that some of the basic “retail fundamentals” that have been lacking are self-inflicted, and can be addressed “without any major spike in spending.”

Another “fundamental” to be addressed, Ellison said, is a need for basic engineering standards for unloading large trucks so as to make the best use of workers’ time. During one of his store visits, a receiving supervisor told him the store had four employees who would work to unload that night’s supply, whether it contained 500 items or 1,000 items.

“There is no other large retailer in America that operates in such a cavalier way. Payroll is expensive, and you don’t want to waste your associates’ time,” Ellison said.

Home Depot, where Ellison spent 12 years, including six as executive vice president of stores, recently launched same-day and next-day delivery in a handful of markets, including Charlotte. Ellison that said Lowe’s is testing that service in select places, but that the company’s supply chain isn’t “mature enough” to roll it out chain-wide.

“I call it ‘second mover advantage.’ Sometimes it’s not terrible that you’re behind if you have the capital to catch up quickly,” Ellison said. “So we’re going to learn a lot from our competition. And we’ll be right there with them, if not right in front of them, in a few years.”

Ellison says Lowe’s supply chain is an area it’ll work to update and improve in coming months. Part of the modernization of Lowe’s overall, Ellison says, includes hiring in supply chain, technology and engineering.

Modernizing the company could mean getting rid of some jobs, too.

“There will be a net increase in people we will need based on where we’re headed, but based on that net increase, I’m sure there will be some functions in the organization that will have a reduction based on where we’re headed and based on number of resources required to do those jobs,” Ellison said.

Down the line, Lowe’s also will be looking at how to better position itself with social media, Ellison says, especially to appeal to young customers and first-time homeowners undertaking do-it-yourself projects. YouTube, for instance, is a huge opportunity for Lowe’s to grow in, Ellison said, as it helps to de-mystify DIY projects.

“We’re going to do a much better job of leveraging social media … so that we can be more active and make sure customers know that we are relevant and we want to help them to make choices,” Ellison said.

In his early years at the Target in Memphis, Ellison saw how frustrated employees could get if they felt that their voice wasn’t heard. That’s why when he took over as CEO, Ellison gave his email address to every Lowe’s employee. “Trust me, they use it,” Ellison laughed, adding that he personally responds to every email he gets from Lowe’s employees.

“I don’t want associates to see me as some mystical figure. Because I’m really not. I happen to be the individual blessed to be the president and CEO but I want them to understand that there is a communication link between me and them,” Ellison said.

Ellison is active on Twitter, and every week puts out a short video that’s posted to Lowe’s internal website that informs everyone of what’s going on. He tries not to sugar-coat anything, either.

“When there are things going wrong in the company, and senior management acts as though they’re not, then you send two messages to the rank-and-file associates: Either you’re totally disconnected from reality, or you’re not authentic. And you don’t want either of those things to represent you as a management team,” Ellison said.

Corporate responsibility

Ellison is the first black CEO of Lowe’s, a company that in the past has grappled with its lack of diversity in its executive ranks. Last year, for instance, a former Lowe’s executive who is African American filed a racial discrimination lawsuit in which he alleged he was wrongfully terminated.

Ellison is also one of just three black CEOs of Fortune 500 companies, as the Wall Street Journal discussed in a story this summer.

Ellison acknowledges that he plays a vital role not just at Lowe’s, but in Charlotte’s corporate community in shaping discussions about diversity and inclusion.

“Growing up black in America, primarily black in the South, you have a high sensitivity to discrimination, you have a high sensitivity to fairness, you have a high sensitivity to opportunities based off skill and based off leadership resolve. We’re going to respect everyone. I respect all religions, all ethnic groups, all genders,” Ellison said.

He added: “We need to make sure that when men, women of all genders and socioeconomic groups ethnicities look at our leadership team, they feel like they’re represented.”

Ellison says the best way to do that is to develop talent from within, and to provide employees with the resources they need to advance in the company, whether that means mentoring and tuition reimbursement.

“I challenge people to look at my background and understand that a lot of the success that I’ve had has been through just hard work, personal development and making sure I took advantage of opportunities,” Ellison said.

At a time when companies are increasingly vocal in taking stances on social issues, Ellison says publicly traded companies walk a fine line in standing by the principles of the leadership team, and not offending customers who may hold different views.

In 2016, hundreds of companies across nation, from Bank of America to PayPal, came out against House Bill 2, the now-repealed controversial measure that set a statewide definition of nondiscrimination that excluded gender identity and sexual orientation. Lowe’s put out a statement saying it “opposes any measure in any state that would encourage or allow discrimination.”

North Carolina repealed HB2 in 2017 but left intact some of its provisions. But with Charlotte’s reputation tainted, the city is still paying to market itself to visitors.

Many customers lauded the vocal position by those companies; others boycotted.

“It’s important for companies to come out and make sure they communicate what they believe in relative to what’s in the best interest of their employees, their customers and their community,” Ellison said.

“My expectation is we’re going to treat everyone with fairness and respect, and I think that’s what it comes down to.”

In Charlotte, the role of corporate leaders extends far beyond the boardroom. That’s a reality Ellison says he embraces.

In the fight to repeal HB2, for instance, Charlotte Hornets President Fred Whitfield spent over a year traveling to Raleigh almost every week to work with lawmakers on a compromise effort.

Ellison is making the rounds meeting with local executives, including Whitfield, to talk about Lowe’s place in the community. A few weeks ago, Ellison had lunch with Mayor Vi Lyles.

“I believe strongly that whatever home city you’re in, you have an obligation to be part of the community. What I oftentimes will say to the team is we have to do more than just collect money from the customers. It is our responsibility to be good corporate citizens,” Ellison said.

This week, Lowe’s delivered 500 trucks of emergency supplies to the coast at Hurricane Michael battered parts of Florida, Georgia, the Carolinas and Virginia. The company said this week it has donated $4 million in hurricane aid so far this year.

The theme of being a good corporate citizen is one of the reasons Ellison was first attracted to J.C. Penney, which was started by a young entrepreneur Ellison describes as one of the first philanthropic CEOs in America.

Shopping at J.C. Penney was a “big deal” to the Ellison kids growing up, Ellison’s sister Virginia told Fortune in 2016.

Leading the iconic company was also huge deal for Ellison, whose father, who never graduated from high school, once worked as a sharecropper, earning $2.50 for every 100 pounds of cotton he picked and cut in the 1960s. On a good day, you could make $7.50 to $9, Ellison said.

“The next generation, his son is the president and CEO of the 40th largest company in America,” Ellison said. “It’s just the American Dream personified.”

The Hornets, Lowe's, Mecklenburg County, and the City of Charlotte opened 7 refurbished basketball courts.


Correction

An earlier version of this story incorrectly detailed Marvin Ellison's time at Home Depot. He was there for 12 years, including six as executive vice president of stores.



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