By Al Wahnon
Robert Shaw is a phenomenon, a rare individual who achieved unparalleled success in the carpet industry and in the process choreographed the march of the mills from virtual obscurity to a commanding position on the world stage. His influence on the growth and development of the industry is exceeded only by the tufting machine. He is determined, disciplined, aggressive, indefatigable and a brilliant businessman, and, one more thing, he’s committed to success. He is intransigent and uncompromising when it comes to achieving. He is a fierce and fair competitor, respected in the marketplace and in corporate corridors.

Actually, Bob Shaw is King of the Carpet Industry. He stepped down as CEO of Shaw Industries last month, just after his 75th birthday, and moved into offices in the Old City Hall building with his secretary, Elaine, and a staff. “If I didn’t get out soon, my boys would retire before I did. Vance (Bell) and Randy (Merritt) were my first two trainees. Vance was 22, now he’s approaching 55.” He explained that Bell spent six months with WestPoint Pepperell and Merritt was only six months behind him before they joined Shaw. “Of course, those are the two people who are going to run the company,” he beamed.

“In those days, we were a company doing only $50 million a year and this year we’ll do $6 billion. Vance is with us 33 years and Randy 32 years.” He enjoys reminiscing and his incredible memory spews forth names and dates, conversations and incidents flawlessly. “We started promoting ‘2 Billion in ’92’ when we were doing $200 million. When I got in front of all our people at one of our annual sales meetings—we held them about every four years then—I had a banner up there saying ‘2 Billion in ’92.’” His enthusiasm was infectious and his people believed. Team Shaw was eminently successful and today they can wave the banner proclaiming ‘6 Billion in ’06.’

Harking back to those earlier days, he explained, “You know what was happening during this period of time, we had gotten to a point when the industry was starting to mature, meaning our whole industry was going to grow probably a little faster than our gross national product, but not too much faster. In the end, there would be two types of companies left: those that had been acquired and those that were acquiring. And that development was obvious, coming out of the depression we had in the early ’80s. That was a depressing time.” Part of the landscape at the time was “a bunch of nice little carpet companies that did $100 million and $200 million in sales, maybe $300 million, but as soon as they had to move beyond that everybody put an M-1 to their heads—they’re taking market share.

“And then, other things were happening. The backward integration—it started with spinning mills. Do you remember all the spinning mills? For all practical purposes, they got eliminated. The next backward integration move was when the larger mills started putting in their own extrusion, and that extrusion was competing with the really big names of our carpet industry—Allied, Monsanto and DuPont. They really kind of dictated the marketplace. Why? Because they were the ones who had all the money.”

Wasn’t that a case of the tail wagging the dog? Mills complained back then, “We can’t let that happen,” but they let it happen.

“You know, Stainmaster did that. Tom McAndrews and I, we joked about it and we had lunch about it. We were both trying to do one basic thing—control our avenue to the market. And all the moves and countermoves during that period of time were exactly that—attempts to protect our own interests. Nobody realized that the reason we went into the retail business and the commercial business was a counteraction to what was happening with DuPont at the time. They went downstream and when they were going to buy our largest customer, we immediately bought them. It was a chess game and it was interesting. You must admit, Stainmaster was the biggest story that ever happened, and Tom McAndrews, you could say, did that by himself. I think he probably was very disappointed when he was not able to take other steps, like going downstream and having some type of alliance with the retailers.”

Bob Shaw is always candid and straightforward. He strives for perfection, but readily admits his mistakes. He’s had some missteps along the way, but that’s where they were left, along the way. He’s not one to avoid answers or side-step sensitive questions. For example: There are people who believe your entry into the retail business was motivated by greed and a desire to take over things, to run the whole show. What do you say to that?

“I don’t mind people thinking I’m dumb, but I’m not stupid. We made a lot of mistakes. One going to England, one going to Australia, because we didn’t understand their culture and they didn’t understand us.” As for the company’s ramble into retail, he readily acknowledged the failure and remembered: “We owned New York Carpet World, Carpetland USA and others at one time. Marvin (Berlin) and I, up until the time he got sick, we were very close. We were good friends; we had total respect for each other. But, you know, it’s kind of like being in a war. The one thing you don’t want to do is tell them where you’re going to be tomorrow, because if you do, they’ll be ready for you. War is war, you try to outflank the enemy. Business is also a kind of chess game. If you’re not trying to understand your competitor, then understand what your strengths are and observe his, then capitalize on your own effectiveness.”

Shaw’s venture into retail in late 1995 met with considerable opposition and when he realized the move was ill-fated, Shaw withdrew from it, regrouped the company and moved forward. He is openminded, resilient and optimistic.

He is confident the industry will continue to grow and prosper in the years ahead. “Forget our industry for a moment and look at the automotive industry, look at the electronic industry, look at any industry that gets to a point of maturity. What do you end up with. You end up with number one, number two and a distant number three. It was General Motors, then Ford and then Chrysler was distant. And, until the foreign competition came in, that was a mature industry. And then you look at electronics and the number one got to be G.E., and on and on. If you’re studying business, you make up your mind, you could be either number one or number two—or somebody was going to acquire you. We said all along, the purpose of Shaw Industries was to build a permanent business for Northwest Georgia and make it world class. History will tell you if it’s world class or not. The next 10 years without me, as somebody said, if you can’t train your replacement, then you’re not world class. You leave a void and the momentum starts the other way.”

With new management in place, Shaw Industries is still riding the momentum forward.