Name: Steven Ai

Age: 51

Title: president and chief executive officer

Organization: City Mill Co. Ltd.

High school: Iolani (Class of 1972)

College: Whittier College; MBA University of Denver.

Breakthrough job: Working as an accountant for Los Angeles Mayor Tom Bradley in 1976. "I was in charge of a $12 million employment project and I was told to hire more people. I said, 'I don't need more people.' They said, 'Go hire more people because we're using federal funds.' That spend-it-or-lose-it mentality is a a widely used mass generalization. But I said, "I don't know if I belong in the public sector."

Little-known fact: Performed "easy listening" songs in college.

Major challenge: Getting new ideas and figuring out which are the good ones and then implementing and executing them."

Book recently read: "State of Fear" by Michael Crichton. "It's about global warming — is it real or not. It's really anti-activist."

Hobbies: "Performing music, playing guitar and keyboards. Computers. Doing home improvements. Cooking. Autos."

Mentor: My father, David. He taught a lot of non-textbook things about life and business. He passed down family values, which include being flexible, being open to change and being humble in all that you do. My grandfather, Chung Kun Ai, used to say, "When you drink water, always remember the source." It means remember where goodness comes from. The success of our company comes from the community and that's why we have to support it. The success of our family comes from the associates in our stores because they're the ones that make the company. My success comes from families and friends and the community. That's why I'm on so many boards and non-profits, about 18 or 20.

Q: Tell us about the evolution of City Mill going back to when your grandfather founded it in 1899.

A: We grew rice and had a rice mill and we also had lumber. We were in tobacco, pineapple fields, fruit canning, shipping. We actually had our own five-masted schooner. Since 1955, we've been in home improvement. The important thing is to be open to change. ... Now information flows a lot quicker, through the use of cell phones, email, fax, the Internet. And your customers are also aware of changes in fashion and trends and new products. That's something you have to stay on top of. Also, with the distribution of products moving faster, you have to try to make sure you have things in stock, but not too much stock. We have to constantly calculate the optimum inventory level.

Q: Under your leadership the last 13 years, City Mill has faced increasing pressure from big box retailers, such as the Home Depot that moved in down the road from your Iwilei store. How has City Mill adapted?

A: Back in 1992 we knew the big boxes would be here. We flew to the Mainland to check them out and see what's working and what's not. We didn't have the same space that the big box guys have. Our stores are about one-third their size, 45,000 to 50,000 square feet, which is about an acre. But the big boxes — just by their name — have a lot bigger footprint. We decided we can't be everything to everyone, so we'll have service, great selection and convenient locations.

One thing we decided was to not go head to head on price. For so many chains, that has been a losing proposition. You have to decide what you want to be and you have to focus on it and make sure you fulfill that mission. We focused on the repair and maintenance of the home and office. By focusing on that, we said we don't need big huge pieces of lumber but we need 12,000 to 13,000 additional items for the little repairs, whether it's the odd kitchen faucet that's been around 30 years or some grommet that fits somewhere.

Q: Recently it seems that the front of your stores are filled with furniture and kitchen and bath items.

A: We looked at home improvements as not just improving the paint and fixing the studs in the walls, but also the home accessories. We started moving into home accessories, organization, storage that helps improve the look of the house. We've been in furniture for 30 years and continue to enhance our furniture selection. We're not a furniture store, per say, but there are accents we like to bring in, whether it's a hallway table or something to put right at the door for your keys.

Q: What kind of feedback have you gotten in response to your changes?

A: We use an anonymous shopping service and a lot of our regular customers write to me. It's not unusual for me to get 1,200 to 1,300 letters and customer feedback cards per year, about 25 per week. Of those, I would say 97 to 98 percent are positive, which is really unusual that it's so overwhelmingly positive. They'll say so and so is doing a great job or thank you for having so and so come to my house to pick up the air conditioner, or your delivery guy was just so friendly.

Q: You mentioned that City Mill decided not to compete on price. How did that philosophy come about?

A: Price isn't everything. If price was everything, everybody would be wearing a Costco shirt, Costco pants and Costco shoes. If price was everything, a Swatch watch or a Casio would be the timepiece of choice because basically all watches do the same thing. That's the reason why a 7-Eleven, a Foodland and a Costco can all compete in the same market all selling food. Consumers are very smart nowadays. They're intuitive and they know what a good value is, and it's not necessarily in the price. In many cases it's time, which very often is the most valuable. That means being able to get to a store, find parking, get in, find somebody to help you find the right products, get all of it and get out.

Back in '98 we went to a philosophy of "priced right every day." In other words, we got away from the idea that something that's regularly $10 is now on sale for $7, or what they call "high low pricing." We feel we've gotten to good, reasonable prices.

Q: You will be receiving the Iolani Alumni Service Award for 2005.

A: I've been fortunate to be this year's honoree. There are a lot of others who do a lot more for our school and for our community, but I do feel honored to be selected this year. I will continue to give back to our school and I will continue to earn that award for the rest of my life. ... I will actually receive it Saturday at the Touch of Iolani, which is basically an all-school reunion, open to all alumni and friends. Lots of great restaurants will be there and while fund-raising is important, what's more important is bringing the community together for fellowship to bond, to recall memories.

Q: Do you have much contact with your famous classmate, Mayor Mufi Hannemann?

A: I've been friends with Mufi since he came in to the school in the sixth grade. I see him periodically around town and at school functions.