Leadership Corner: Bill Matheson

Interviewed by David Butts
Advertiser Staff Writer

Age: 64

Title: General manager (retired March 31)

Organization: Hopaco (the former Honolulu Paper Co. was bought by Boise Cascade Corp. in 1964)

High school: Sheboygan Fall, Wisconsin

College: Michigan State University

Breakthrough job: General superintendent of a corrugated container plant in 1968.

Q. Boise Cascade agreed to buy Office Max last month. What impact is that likely to have on Hopaco?

A. It is definitely going to have an effect. For instance, in Hilo we are across the street from each other. The people of Hilo have been so loyal to us. When that store (the Office Max) opened, we didn't lose a beat. They have stuck with Hopaco for many years, yet the Max facility is a really nice facility.

There's going to be a lot of discussion. They will obviously get rid of close-together ones like that. I don't even know what name they will use here. It's still too early in the process. There will be changes here.

Q. You managed 190 people here. How did it compare with managing companies in the Mainland?

A. I think the uniqueness is there is more loyalty to the company here. I think that's because employees tend to have fewer choices. They don't move to another city. You don't have as many companies that you can apply to, so I think there is more of an identification with and loyalty to the company than I experienced in other cities. There's much more a family feeling of helping each other out and working together. It was a more 'ohana type feeling than I experienced any place else.

Q. Family also means you are stuck with them whether you like them or not, doesn't it?

A. Yeah, and that's my management style. If somebody does something dishonest, they are gone immediately. But if they are struggling with the job, we will try to find a job for them. We'll try to give them training or experience that will help them do the job better. That's not necessarily true with all the locations for Boise or all the the cities, but that's my style.

The company (Boise Cascade) does a questionnaire that everybody fills out every other year. The satisfaction of our employees was always the highest here in Hawai'i of any of the 46 locations. Our seniority was so great. In the last year that I worked at Hopaco, we retired somebody with 42 years, somebody with 38 years, somebody with 44 years. I mean, people just stay. Very seldom will you see that at another location.

Q. When you came to Hawai'i in 1994 to manage Hopaco, Office Max and Office Depot had just come to town, yet you managed to keep growing. What was your strategy?

A. Our strategy was to have as good or better prices, to have the personal touch as much as possible, because the big box retailers don't really concentrate on the personal touch. The sales reps, the telemarketing people, the retail people all got to know their customers, got to know their names, help them when they come in the store, ask them if they need help.

You walk into a Home Depot and try to get somebody to help you, and sometimes it's a challenge. ... Hardware Hawaii is really one that has done it very well. You walk in their store, you're welcomed, they ask you if you know what you want and where it is. They are right there all the time.

Q. How were you able to keep your prices as low as the big box retailers?

A. We were part of a big corporation. We had the buying power of Boise Cascade. But even with that, we did our own buying out of China and Taiwan. There were some products that we could do better on our own here. Some of the furniture lines we imported.

Q. You were here through most of the '90s when the economy wasn't growing much. How was Hopaco's growth?

A. We had growth every single year in sales. I think the worst year was up 3 percent and the best year was about 11 percent. We grew pretty consistently because I was always looking for ways to improve sales and move people who were replaced out of the warehouse or out of the office into sales positions.

We tried to come up with a new initiative every year. We came up with getting into logo products, getting into technology products. We even distributed some health care products for a couple of the hospitals. They asked us to take on some health care lines because our service was so good and the delivery from the health care people was so bad.

We were constantly looking for things that we could do for the customers. Saying to our largest customers, "What else do you buy? Is there something that we can provide the distribution for?" For instance, NCR had their own warehouse, and Bank of Hawaii was buying NCR paper and all the little forms from NCR. We said, "Can we do it better than you can in your own warehouse?" It turned out (that) yes, we can, so we started doing the distribution for NCR in Hawai'i to 7-Eleven, to Bank of Hawaii. We are constantly looking for ways to keep that growth going.

Q. A year after you got here, Hopaco moved out of Ala Moana Center. Why was that?

A. They wanted to move to a more tourist orientation, and office products wasn't what they wanted in their center. They gave us 30 days to get out as a charter member in that mall, so that was kind of disappointing. Fortunately, we had already started negotiating for the downtown store, so that became our replacement, our flagship store.

One change that the (arrival of of the) big box retailer made to our strategy was that we had to get out of malls. Retail space was so expensive, we couldn't sell at those levels and support those.

Q. What was the main challenge you had to deal with in your nine years at Hopaco?

A. The big thing was getting technology driven out to all the locations, the retail locations and the Neighbor Islands. We were on the computer at Pa'a Street (the main office), but that was it. To get the technology pushed out to all those locations, not only the distribution part of it, but the order entry and all of those areas, that was really the biggest challenge. The second (challenge) was to remake the marketing to compete with the big box retailers.

Q. What benefits did technology bring?

A. The biggest impact was we could then handle national account sales, so those companies that we had national agreements with on the Mainland, we could then service here, because the orders were entered out of the home office. Electronically they would come to us. We could take on servicing accounts like some of the larger insurance companies, Ford Motor, General Motors. That was a big leap for us.

Q. What about improving distribution?

A. We installed technology so that the picking process (gathering products to be delivered) was sped up. We could pick in just a few hours rather than taking almost 16 hours to pick. When I got out here, people with carts would take a hard-copy order and they would go around and pick into the box that order. What we put in was a conveyor system and a two-story picking module, so the box would move down ... almost an assembly line instead of people walking up and down aisles.

We added better trucks. Some of the trucks you see (now) the driver gets out of his seat, goes into the cab, picks up the order and goes down stairs to the curb. When he gets out of the truck he has got his order with him. It's got a side door and steps and a pass-through from the cab. That made them much more efficient. Instead of getting out of the truck, going around to the back, putting the tailgate up, getting in, picking it up, getting out, lowering the door. Those guys will make 65 to 85 stops a day. That process has to be efficient.