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CSP Magazine

Casey's General Stores: Success and Succession

The empowering influence of Bob Myers, CSP’s 2016 Retail Leader of the Year

A small pond sits in front of the headquarters of Casey’s General Stores in Ankeny, Iowa. It’s similar to most ponds built near office buildings, there for aesthetics and atmosphere. But unlike those, this one has some really big bass swimming in it.

Bob Myers, chairman and former CEO of Casey’s, loves to fish. Back in the 1990s, he arranged for the pond to be stocked with bass, in hopes of casting a line at some future point and catching a big one. But Ron Lamb, CEO at the time, forbid anyone from fishing in the pond, perhaps out of a sense of decorum. And to this day, Myers has not dipped a hook in that pond, despite Lamb’s passing several years ago.

If anyone has earned a right to fish in that pond, it’s Myers.

In less than 10 years as Casey’s CEO, Myers oversaw extraordinary growth of the 57-year-old Midwest stalwart:

  • The more than quadrupling of its stock price from less than $25 on his first day as CEO in June 2006 to more than $112 upon his April 2016 retirement.
  • Successful defense against a 2010 hostile takeover attempt by Alimentation Couche-Tard.
  • The next evolution of its landmark pizza program, introducing the first-to-industry delivery service, online ordering and a mobile ordering app.
  • Design and introduction of a larger, 21st century store format.
  • Expansion of its retail network of more than 1,900 sites, with plans to move into Ohio and Michigan (Casey’s 15th and 16th state, respectively) in 2017.
  • Construction and opening of its second distribution center, with a third potentially in the works.
  • And, perhaps most important, imbuing a culture that stresses leadership and empowerment vs. management.

It’s for these reasons and more that CSP named Bob Myers its 2016 Retail Leader of the Year. And it couldn’t have happened to a nicer person.

“He’s the kind of guy who would want to do the right thing for you even though you’re not in the room,” says Sam L. Susser, president of Susser Holdings II LP, Corpus Christi, Texas. Susser met Myers at an annual NACS gathering of industry CEOs.

When talking about Myers and Casey’s, Susser speaks of a team with a deep moral foundation.

“They do the right thing when nobody sees what they’re doing,” he says. “These are the kind of people I’d turn my own children over to and I know they’d be just fine.”

Humility is another common descriptor for both Myers and Casey’s. “Bob could be driving a Cadillac, and I’m sure there are people in his position driving Cadillacs. But he drives an Impala just like everyone else,” says Steve Risdal, who was one of the first—and last—Casey’s franchisees before the franchise ended in 2009.

Consider that Impala an icon of Casey’s company culture. When Risdal reached his 25 years as a Casey’s franchisee, the executive team briefly debated what token of  appreciation to give him—perhaps a Rolex? But they quickly scrapped the idea.

“The comment was, ‘Well, we’re not a Rolex company,’ ” Risdal says. “So I have my Casey’s watch here that’s not a Rolex, but it’s one I’m extremely proud of.”

Getting Myers to accept the Retail Leader of the Year award was not easy. That’s partly because of his characteristic humility, and partly because it’s hard to separate him from Casey’s. Even several months into his retirement, he continues to visit the offices each week, and he provides steady guidance as chairman of the board.

But from his perspective, and by design, he is just one of a succession of influential company leaders, beginning with founder Don Lamberti, up through Lamb and Casey’s new president and CEO, Terry Handley.

“It’s not a one-man show,” says Susser. “That’s a credit to Bob; he didn’t build a one-man team.”

A LEADER IN TRAINING

Myers was born in 1946, and he grew up on the north side of Des Moines with his

parents and four sisters. While his life’s journey would link him with a succession of great leaders, he found his very first leader in his father. A staunch Democrat and union man, Myer’s father served as the business representative for the machinists’ union in central Iowa’s AFL-CIO.

“I idolized him,” says Myers. “He passed along to me some really important core values: honesty and integrity, fairness and professionalism.”

When Myers was 11, his father died suddenly from a heart attack. The family was able to stay afloat comfortably for a while on insurance money and Social Security, but soon the insurance ran out and Myers’ mother began looking for work.

“You don’t realize how poor you are until you’re waiting for the mailman to deliver the Social Security check so you know you’re going to get a good meal for the next week or two,” says Myers.

He held different jobs to help his mother support the family while also attending high school part time. He delivered newspapers and worked at a local auto salvage yard owned by a friend of Lamberti. Myers grew up only a couple of blocks from his eventual boss and mentor, and he would frequent the general store owned by Lamberti’s father. It was also during this time that he met Janice, his wife and life partner of nearly 50 years, when they were only 14 and 15 years old.

Life was slowly shaping up. He even managed to graduate from high school.

“And then,” Myers says, “I was drafted.”

It is hard to overstate the role Myers’ military service has played in shaping his character and skill set. It was essentially a leadership school, teaching him how to delegate, communicate and inspire.

Myers was drafted into the U.S. Army in 1966, went through basic and infantry training, and became an assistant drill instructor at Fort Dix in New Jersey. From there, he attended officer candidate school and earned a commission at 20 years old.

Next came jump school with the 101st Airborne Division at Fort Campbell in Kentucky.

“When you’re 20 years old, you think you’re invincible,” says Myers. “That is, until you come down on a night job, rather hard on the heels of your feet and head, and the realization sinks in that that’s kind of a dangerous thing.

“I thoroughly enjoyed it and would do it again.”

Over the next two decades, Myers would serve in Vietnam, Saudi Arabia, Germany and Kuwait, eventually rising to lieutenant colonel. Along the way, he attended the U.S. Army Command and General Staff College, earned a college education and served command roles at different levels in the Army.

“Most of the time, I was a leader in one form or the other,” says Myers. “You’re constantly learning from that, constantly looking at your superiors and what made

them a good leader and trying to figure out whether or not you could adapt that particular style to your own style.” He also learned about poor leadership, such as the “Do as I say, not as I do” mentality, and putting oneself on a pedestal.

It was a 22-year education, says Myers.

Joe DePinto, president and CEO of 7-Eleven Inc., Dallas, and himself an Army veteran as well as a West Point graduate, says Myers’ rank reflects his talent for inspiring and guiding others.

“You don’t achieve the rank of colonel in the U.S. Army unless you’re doing something

really well,” he says. “Folks like him were the guys who taught me leadership.”

THE PROBLEM SOLVER GOES HOME

In 1988, more than 20 years had passed since Lamberti last saw Myers at the Des Moines salvage yard where he helped his family get by. That year, Lamberti got a call from him, asking about a job at Casey’s General Stores.

“He said, ‘I have to have something to do,’ ” says Lamberti, who was CEO at the time. “I just retired from the military and I’m bored.’ ”

For Myers, fresh out of the military with a wife and household to support, his only expectation was a job that paid enough money to offset the difference between his active and retired military pay. He had no particular interest in retail or aspirations to lead Casey’s. But whether he knew it or not, those two decades in the Army had been transformative.

“All I can remember was this skinny little red-haired, unkempt kid that worked at the junk yard,” says Lamberti. “And then he came in, and I hardly recognized him. Here was this slim, trim, well-kept, well-groomed young man. And about the only thing I  could identify was the red hair.”

At the time, Casey’s was working on a new distribution center and planning the construction of its headquarters. It was in need of a facilities manager, an ideal fit for Myers’ logistical experience in the Army.

“We went through the interview and I told him what the requirements were, and he said, ‘This is exactly what I’ve been trained for,’ and, ‘I’ll take the job,’ ” Lamberti recalls. “I said, ‘We haven’t talked about salary yet!’ He said, ‘Well, I know you’ll treat me well.’ ”

With Lamberti’s recommendation, Lamb, who was president at the time, made the hire. It was a transitional time for Casey’s; the company had gone public only five years prior. And while it was growing rapidly and beginning to master distribution, the chain’s executive team was still very much in management mode rather than characterizing strong leadership, says Lamberti.

Myers, meanwhile, quickly began to develop a reputation as a problem solver, with the new distribution center and headquarters as a clear example. “When he first took over the operation, we had the cleanest, spit-shine distribution center and office complex you’ve ever seen, still to this day,” says Lamberti.

“Every place we used him or moved him, if we had a problem in a certain area, that problem would go away.”

“Frankly, that’s what the military does all of the time: solve problems,” says Myers. He spent the last three years of his Army career in college, teaching military problem-solving to captains and majors. The technique begins with proper identification of the problem.

“Often when people get astray on solving a problem, it’s because they really don’t understand what the problem is and they haven’t defined it,” says Myers. “They’ll come up with a solution, but the solution’s not the optimal solution.”

His leadership skills were also maturing, rooted in his appreciation for employees’ role in the success of the company.

“Bob had a great curiosity about the company,” says Handley, who at the time was director of marketing and advertising. “He and I got to sit and visit after hours about company philosophy, how I saw the company developing and growing.

“We had a lot of the same philosophy with regards to leadership vs. management, how to get the best out of people.

“And,” Handley says, “we’re both Irish, so that helped.”

Myers spent time at Casey’s stores, working through different positions—making pizza, washing dishes, running the register. “He understood that the most important position for Casey’s is actually the store manager’s position,” says Handley. “It was all about what can we do to support that store manager and his or her operation at the store level.”

In 2006, after steadily working his way up the ranks, Myers took over from Lamb as CEO. And with the change in management came a change in leadership style.

“We made a major effort to change the way we think about things, converting the company from a management process-oriented company,” says Myers. “You can’t dismiss that, but to concentrate on leadership and leader development at every level.”

This approach includes empowering employees with training opportunities at every level and giving new leaders a chance to develop. And it means clear communication: assigning a task, providing timelines and expectations, and then allowing employees to fulfill their obligations without micromanagement.

Case in point: the construction of Casey’s second distribution center, which opened in February in Terre Haute, Ind. Teams from store operations, marketing, distribution and transportation worked together, alongside a consultant. “Bob set the  expectations, put the project management team together necessary to complete the task, and set timelines for it to happen and be completed,” says Handley. The team ended up finishing the distribution center ahead of schedule.

“The collective wisdom is far greater than a single individual, so why would you put one person in charge?” Myers says. “And why wouldn’t you have a collection or group of people to evaluate problems, solve problems that way?”

Later, this leadership approach would be tested in the biggest crisis to face Casey’s: a hostile takeover.

Continued: Battling a Takeover Threat

WHAT DOESN’T KILL YOU

‘‘The greatest challenge I faced as a CEO, that we all faced, was the hostile takeover attempt by Couche-Tard,” Myers says. “We came together on that and we were highly successful. They made a mistake and we just weren’t going to let that happen.”

In October 2009, Alimentation Couche-Tard, based in Laval, Quebec, had a sprawling network of more than 5,800 Circle K and Mac’s stores in the United States and Canada.

But it wanted more, and it began making inquiries about purchasing Casey’s. The company’s Midwest footprint would help fill in a fairly undeveloped part of Couche-Tard’s geography.

Myers’ response: Thanks but no thanks—we have a plan and we’re sticking to it. Then, in March 2010, Couche-Tard submitted an unsolicited bid of $36 per share. After a quick review, Casey’s board decided this did not nearly reflect the true value of the company, and again declined to discuss a sale. Undeterred, Couche-Tard announced in April that it was going public with its proposal and would try to get Casey’s shareholders to approve its own slate of board members.

“When Couche-Tard made a hostile bid for our company, Bob knew it was way  undervalued,” says Lamberti. Part of the problem was that Wall Street did not know how to properly value convenience stores, he says. “We didn’t fit any of the molds.”

Over the next six months, Casey’s execs went on the defense, hiring Goldman Sachs as financial advisers, a legal team, folks to watch the stock and write press releases.

Not one tied to technology, Myers had to get a BlackBerry to keep track of emails  coming in at all hours from the financial team in New York.

“It wasn’t just Bob Myers—it was everybody who was part of that,” Myers says of the eff ort. “This is as close as it comes to the military going to war.”

To show shareholders that it could increase the company’s value without Couche-Tard’s help, the Casey’s team raised more than $500 million to buy back approximately a quarter of its stock at $38 per share—higher than Couche-Tard’s most recent bid of $36.75. Eventually, Couche-Tard would raise its bid to $38.50, which was still far from the mark.

“For us, it was … let’s have some discussions and see if this is something we could work out for both of us,” says DePinto, who insisted that his bid was never hostile.

7-Eleven’s big-city presence, paired with Casey’s small-town footprint, could be a good match.

During those initial talks, Myers quickly earned DePinto’s respect.

“He’s the consummate gentleman,” DePinto says. “In discussions like that, sometimes egos come into play. It could get contentious. Bob always was a guy who was very level-headed, rational and easy to talk with. Most of all, I really trusted him.”

Myers also showed his kindheartedness. At the time, DePinto’s wife was going through a health scare. “We’d be in discussions, talk about the possible combination of two pretty large organizations,” says DePinto. “And he’d always start every visit out with, ‘How is your wife doing? How’s everything going? How are you feeling about things?’ Those are the kind of things that really show you what kind of person he is.”

Ultimately, Couche-Tard ended its bid in September 2010, and 7-Eleven and Casey’s decided not to make a deal. Price was certainly part of it—“If the first number doesn’t start with a 5, the bid’s too low,” says Lamberti of the board’s thinking at the time—but it was also about keeping the Casey’s family together.

“Bob probably worked night and day on that, and personally was so concerned because of the concept of Casey’s. We’ve been a family, a company that’s rewarded people who have moved up the ladder,” says Risdal.

DePinto says Casey’s was run so well that, had an acquisition happened, “we would have kept it running just as is.” But clearly the will of Myers—and Casey’s—was to stick to its independent course.

PLAYING THE LONG GAME

While the hostile takeover attempt was stressful, it proved that Casey’s value was greatly underrated. It also tempered the chain like a sword with fire.

“We were a very good company prior to that, but we became a much, much stronger company as a result,” says Myers.

For one, it convinced the leadership team that Casey’s needed a long-range plan. So it hired Neil Stern, a retail consultant with Chicago-based McMillanDoolittle, to help develop intermediate and longer-term goals.

Stern created what Jim Collins, author of “Good to Great,” refers to as a “Big, Hairy, Audacious Goal,” or BHAG, for Casey’s: To proudly serve 1.5 billion customers per year, one customer at a time.

At the time, Casey’s was serving 500 million customers per year, so this was definitely audacious. “We’re talking about tripling the size of the company by year 2030,” Myers says. “So what kind of plans, programs, strategies do we need to implement to be able to achieve that goal?”

This does not necessarily mean tripling store count, but it does means enhancing the existing store base and improving same-store sales. So with Myers’ guidance, the Casey’s team developed a five-year strategic plan, mapping out new store and acquisition opportunities, remodels and replacements.

“We have been going 100 miles an hour ever since,” says Handley.

Like Myers, Handley is another executive who, in the words of Lamberti, “bleeds  Casey’s.”

Handley joined the company at age 20 and worked through roles from marketing to operations. And, just like Myers, Handley stood out early on as a future leader.

“About 15 years into Terry Handley’s career, Ron Lamb came into my office, and he said, ‘Someday, Terry Handley will be sitting in our chairs,’ ” Lamberti says. “And you know, 25 years later, our very talented board made that same decision.”

That said, Myers is a tough act for Handley to follow. Risdal cites the massive increase in stock price. “For Terry to move the bar that much higher, it’s going to be a challenge,” he says. “The bigger you get, the harder it is to show dynamic results because it’s just not possible. He’ll have his nose to the grindstone, keep expenses down, and I’m sure he’ll do very well.”

And Handley, who is admittedly hands-on, will need to adopt a more hands-off approach. Myers encourages it. “He’s very adamant about being sure I manage

my time and ... ensure I allow people to fulfill their obligations, the task is being completed, and that I’ve set proper timelines and expectations,” says Handley. “That’s what I’ve learned from him: You can’t be everywhere and can’t do everything.”

That includes taking credit for Casey’s incredible success story. “Bob Myers didn’t make this a good company,” Myers says. “Bob Myers was part of the team that made this a good company.”

More: Meet Bob Myers (Video)

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