Skip to main content
the lunch

Terry Davis says he never set career goals for himself, starting at Home Hardware as a warehouse stock picker at age 19. Over the ensuing years, through a divorce, second marriage and the birth of a second daughter, he kept moving up the corporate ladder and on May 1, at age 63, became CEO.Rachel Idzerda/The Globe and Mail

He's something of an accidental CEO.

Terry Davis got his start at Home Hardware Stores Ltd. 44 years ago as a warehouse stock picker – a 19-year-old, long-haired hippie fresh out of high school with a wife and newborn daughter to support. A few months later, he applied for and landed a job as a computer programmer, without knowing anything about computers. Over the ensuing years, through a divorce, second marriage and the birth of a second daughter, he kept moving up the corporate ladder and on May 1, at age 63, became CEO.

But he says he never set career goals for himself.

"I had a lot of things thrown at me, to be responsible for," Mr. Davis says over a chicken Caesar salad at his favourite restaurant in the high-tech hub of Waterloo, Ont., just a 10-minute drive from his head office in tiny St. Jacobs (population: 2,011).

"I said yes every time. I would never hem and haw … You should say yes to every opportunity that comes along. Don't think for a second that you can't do something. Just do it and learn about it."

His do-it-yourself approach has served him well in the brutal home-improvement retail wars, helping his team build Home Hardware into an unlikely contender against U.S. powerhouses Home Depot Inc. and Lowe's Cos., as well as Quebec-based Rona Inc.

Privately-held Home Hardware, a co-operative of owners of 1,060 stores with more than $5.4-billion in annual sales, has managed to gain market share in the $40.7-billion Canadian sector over past years and remain a significant player, according to data from trade publication and consultancy Hardlines. The retailer ranks a close third in sales to Rona and Home Depot.

But as Mr. Davis asserts: "It gets tougher every day."

He and his team fight the big-box stores partly by borrowing from the DIY model of the Mennonite community in St. Jacobs, picking up on its "culture of self-sufficiency," he says. The Mennonites produce their own food and clothing and run their own technology operations, including the injection moulding and pressing machines that they use to make snow shovels, garden rakes, buckets and other products for Home Hardware. "That strong culture in our area has seeped into the psyche of Home Hardware over the years," he says.

Home Hardware's co-founder, Walter Hachborn, a long-time St. Jacobs resident who, at 93, still comes into the office every day, introduced automation to the retailer early on, Mr. Davis says. As early as 1967, the company installed its first computers, leading to Mr. Davis' early years as a programmer, taking computer courses, reading up on the subject and even writing proprietary computer programs for the company. "I did everything myself, pretty much."

He feels a bigger influence from St. Jacobs than its Waterloo neighbour, which BlackBerry Ltd. and other tech companies call home.

"We tackle things a little bit differently," he says. "We've got limited resources to work with. How can we keep up with our competition without having their deep pockets? It makes us a little more creative."

For our lunch, he chooses Waterloo's Wildcraft Grill, where BlackBerry in its heyday rented its three private rooms for meetings so often that the mobile-device firm's executives affectionately called it "the RIM cafeteria." Mr. Davis thought about booking lunch instead at a restaurant in St. Jacobs, but figured it might be too noisy and crowded with summer tourists flocking to see the Mennonites in their horse-driven buggies, women in traditional caps and aprons and the local farmers' market.

He takes his wife, Anne, to Wildcraft for dinner on weekends for steak frites and thriftily collects rewards points from its Bite Club – he's got about 14,000, enough to get a free multi-course group dinner. He usually skips lunch, a habit he got into as a busy computer operator. "I'm a stout person," he says. "If I had three meals a day I'd be even stouter."

Today, he enjoys the crostini appetizer with bacon, granny smith apple and Gruyere cheese and, later, one of the cheesecake lollipops (with a Skor candy coating) that our server brings for free, without our asking.

The intensity of the home-improvement battle isn't apparent from his easygoing demeanour and tendency to crack jokes. He's quick to acknowledge he's a "terrible" handyman and leaves the heavy-lifting to his wife or a Home Hardware contractor. "I can build shelves and I can do very basic things," he says. "I haven't plumbed anything lately."

He likes punk rock. The licence plate on his silver Ram 1500 4X4 pick-up truck says "CLASHFAN," a nod to the band that he fell in love with in his 20s.

Michael McLarney, president of Hardlines, says Mr. Davis can be lighthearted, but runs a tight ship at head office. "You think it's that nice sleepy company tucked away in Mennonite country," Mr. McLarney says. "Don't be fooled."

Mr. Davis credits his late father for his sense of humour and can-do attitude. A former mayor of Uxbridge, a town north of Toronto where Mr. Davis grew up, his father, a veterinarian, "was always telling me to do something I love. 'Whatever you do, don't get stuck in a factory job.' I never saw him mopey. I never saw him down about things. He was just a very positive guy."

As a child, he drove to farms with his father to watch him deliver calves and chase down pigs to give them shots. "We hung around a lot." His mother taught him to be frugal. She would reuse aluminum foil and store it in the bottom drawer of the refrigerator.

When he was 16, his father got a senior job with the Ontario agriculture and food ministry in Guelph, Ont., where the family moved. "I was from a little town and I'm going to a city. Guelph had its own radio station. I thought this was a big deal. I really thought it was kind of cool to move."

His dad helped him find his first job at Home Hardware and encouraged him to stay with the small, young company. "He felt it was clean work and a product that would always be in need … He was very strong about having a business sense about things. As a veterinarian he would tell me, 'You could be the best farmer in the world but if you don't have good business sense it didn't matter, your farm would fail.'"

Mr. Davis has no misgivings about not having earned a university degree, although he took accounting and marketing night courses at Sir Wilfrid Laurier University. "I was getting my education on the job."

"One of the things I hated about Wilfrid Laurier was that they did a lot of case studies with group work," he says. "I know it doesn't make me sound like a collaborative person. But I liked that aspect of it – I could just get into something in depth on my own and really think it through and approach it like a puzzle and figure out how to solve it. I like working with people too: I wouldn't read too much into that."

On the personal side, one of his toughest moments was during his breakup with his first wife, although he says it was amicable and they even used the same lawyer.

"To go and talk to your teenage daughter and tell her that her parents are getting divorced – it's tough on a person," he says. "I still feel, 'What a crappy thing to have done to my daughter at the time. But that's life – it doesn't always work out.'

"Going to tell my mom that we were getting divorced, driving out to tell her the news – that feeling in your gut: you just feel you're letting so many people down."

He met his second wife, Anne, within 18 months at the local Lulu's, at the time known for being the Guinness record holder for the world's longest bar. They live in Fergus, Ont., about 25 minutes from his office, and had another daughter, Devon, now 28, who spent time teaching English in Korea and is now an elementary school teacher. His eldest daughter, Stori, is now 43 and lives in Raleigh, N.C. with her husband and two children. His daughters' travels over the years have given him the chance to see new places as he visited them, he says.

One of his biggest challenges on the job came about a decade ago, when Rona quietly made an informal offer to merge or team up with Home Hardware, which it ultimately rejected. Mr. Davis, as vice-president of strategic planning, was subsequently charged with transforming Home Hardware from its entrepreneurial roots to a more growth-driven player, recruiting independent hardware stores into the network. For the first time, it started to pay incentives to store-owners to sign on, which didn't sit well with some existing dealers. In the past six years, the retailer has signed up more than 130 new dealers, he says.

Home Hardware benefited from Rona's troubles, strategic shifts and opposition from its own independent dealers to Lowe's' 2012 unfriendly takeover proposal, he suggests. Rona also recruits independent store owners to its mix of independently-owned small shops and corporate-owned big box outlets. "You don't want to be with a company that's changing direction every couple of years," Mr. Davis says.

His other pressing challenge is persuading about 10 per cent of his store owners who resisted investing in upgrading their "shabby" stores to do so. As well, he needs to convince a smaller percentage of them who have resisted adopting e-commerce to embrace it.

What's next for Mr. Davis? Each of his two predecessors as CEO held the top position for 25 years. "The next guy, he ain't gonna be around for 25 years because he's 63," he says of himself with a smile. "The board will want me to make sure that I have the next generation of leadership in place by the time I move on." Succession planning is on his to-do list.


Born: Uxbridge, Ont., Jan.14, 1951

Family: Divorced, remarried Anne, two daughters, one from each marriage, Stori, 43, and Devon, 28. Two grandchildren, Evan, 13 and Brynn, 10. He lives in Fergus, Ont.

Beginnings: His late father was a veterinarian, former mayor of Uxbridge and a senior official with the Ontario agriculture and food ministry. His mother raised the children, four boys and a girl, while helping his father with his practice, which was in the back of their family home.

Positions at Home Hardware: Started as warehouse stock picker in St. Jacobs in 1970, soon after became a computer programmer. From 1981, he held a wide array of senior positions, including vice-president of information services, vice-president of marketing, vice-president of dealer development, vice-president of strategic planning, and chief operating officer. "I was lucky at Home Hardware, I got to try a lot of different things over the years."

His view of his biggest corporate achievement: Writing a software system for the retailer in 1973 that allows automatic inventory orders of its store "dealers" (owners) if the warehouse has run out of the merchandise they ordered rather than the dealers having to reorder it.

Another corporate highlight: On 2012, as chief operating officer, he donned a wig and dark mascara to cover up his grey eyebrows to appear for a week on Undercover Boss Canada after then CEO Paul Straus turned down a request to participate in it.

Leisure activities: He plays bocce, a bowling-like ball sport, which he learned from the late Pat Paulsen during a chance meeting in 1980 with the Smothers Brothers comedian – and U.S. presidential candidate – at a hotel in Edmonton where Mr. Paulsen was performing. "He's out in the courtyard of the hotel throwing bocce balls," Mr. Davis recalls. "He was desperate for a partner." Mr. Davis also kayaks and golfs, although of the latter he says "I'm terrible at it." He plays Tuesdays after work in a company golf league.