Exclusive Interview: Steve Odland

In an era of economic instability, Steve Odland – CEO of $14.5 billion office products and services giant Office Depot – strives to keep the focus on taking care of business. “The global economy is very bad right now. These are unprecedented times and the problems are more [difficult] than ever before,” Odland explains. “Our slogan is taking care of business so we view this time as an opportunity to adjust what we’re doing in order to take better care of our customers.”

Odland has made a career of solving problems during challenging times. Before Office Depot, he was Chairman and CEO of AutoZone, the nation’s largest auto parts and accessories retailer. Upon taking control in 2001, Odland’s first goal was to institute tougher ethical standards and practices throughout the corporation. He stressed that the company’s 45,000 employees needed to conduct business with honesty and integrity whether dealing with the board of directors or customers. Two years into Odland’s tenure at AutoZone, the company showed a total revenue increase of 11 percent, reaching $5.3 billion and tripling the stock

“You must hire the right people. If you hire crooks, they’ll steal,” Odland told Business Week in 2003. He noted that employees needed to be, “led from the top of the company to do the right thing and to behave with the highest ethical standards.”

He took his commitment to people and ethics to Office Depot in 2005. Odland continues to be recognized as an innovative leader and recently was part of a small group of CEOs to sit with President Barak Obama. They covered a variety of topics and Odland found the new president to be both sincere and a good listener. The group shared thoughts on, “the economy, what we were seeing in our organizations as well as cost of healthcare, the banking issues facing the country and some of the challenges that we have from the private sector perspective.”

“Office Depot has been a bellwether company for the recession. We started experiencing the slowdown in advance of most people because our prime customer is small business, which has cut back on purchases,” Odland says.

Office Depot posted a $1.48 billion loss in 2008 ($5.42 per share) compared with a profit of $395.6 million ($1.43 per share) in 2007. Their stock hit a 52-week low of 59 cents last month, but has rebounded significantly in recent weeks.

The housing market typically provides the liquidity or cash that allows people to start a small business. Thirty percent of Office Depot’s retail sales are driven from Florida and California – “ground zero for the mortgage meltdown and the real estate crisis,” Odland points out.

As the housing crisis expanded and home price evaluations dropped, capital for small businesses dried up. While despair and a hunker down mentality is prevalent around the globe, it doesn’t resonate with Odland. “It’s so important for us to reach out and really try to help these people conserve cash, to be there for them so that they can buy just what they need and to provide all this value in our stores and on our website,” he says.

Unlike CEOs whose salaries rose during the downturn, Odland took a 27.2 percent cut in compensation in 2008. According to documents filed with the U.S. Securities and Exchange Commission, he received $9.36 million in total compensation last year, down 27.2 percent from $12.86 million in 2007.

Recently Odland told shareholders he is positioning Office Depot for recovery and international growth, saying "We will focus on what we can control.” The retailer has closed 112 of nearly 1,300 North American stores and six distribution centers. More warehouses will be closed in the future as the company consolidates distribution.

Meanwhile, Office Depot is expanding its international business. The company currently sells to customers directly or through affiliates in 48 countries and is already the largest office supply retailer in China and India.

Taking Care of Business

This ability to listen to their customer is a key part of Office Depot’s mission and Odland’s focus. The company offers free resume copies and free faxing for people trying to find a job. Its “Tech Depot Services” provides inexpensive fixes for computers and various product bundles, all designed to save customers money.

To Odland, the title of CEO stands for Customers, Employees and Owners. He says one must remember customers are not buying less because they have lost their affinity for you but because they are hurting. “And if you can have empathy for your customer and change your offerings while maintaining your service level, then when times do turn around, which they will, customers will remember,” he says.

Office Depot and Odland encourage open, direct communication with employees. And, he admits, “I have to remind myself that I need to ask them for help. I need to ask our people to help support what we’re trying to do and what we need to do for our customers.” When it comes to owners, this CEO feels it’s vital to, “Communicate more [and] do the best we can. Then we will weather it together, and everybody will survive and we’ll all be stronger for it.”

Going Green

Office Depot has a longstanding commitment to the environment and has made its green initiative a priority. A recent Office Depot survey of 2,500 business professionals found that half are interested in making their offices greener, but cost and understanding are the two primary factors preventing them from doing so. Office Depot has been helping businesses go green since 2003 when it launched their first “Green Book” catalog of environmentally preferable products. “We’ve been doing it longer than anyone else.” Odland explains. “We were one of the first to introduce the ink and toner cartridge recycling program.” Today you bring one into the store, get a $3 coupon and the cartridge doesn’t make it into the landfill.

They replaced their fleet of “box trucks” in North America to ultra-low-emission “Sprinter” vehicles that are an average 40 percent more fuel-efficient. Office Depot even has someone solely focused on keeping their stores environmentally friendly. Yalmaz Siddiqui, Director of Environmental Strategy, sees to it that Office Depot doesn’t fall behind.

Office Depot's three environmental aspirations are to "Buy Green," "Be Green" and "Sell Green." By "Buying Green," Office Depot has achieved the widest "green product assortment" in the office products industry - approximately 3,500 products with recycled content, and hundreds more with other environmental benefits. By "Being Green," they have reduced their electricity usage by over 20 percent and saved at least 21,000 tons of waste from landfills. By "Selling Green," they have helped many customers reduce the environmental impact of their business.

Office Depot also recently launched a new seminar series ‘Smart Steps to a Greener Office’ to be held in various cities across the United States. The seminars will be designed to help businesses of all sizes develop more efficient, less wasteful and healthier offices.

Odland’s belief in the American Dream is evident in his parting comment. “We all have to keep focused when things are tough. Let’s all hang together. Let’s not vilify individuals. It’s not about blame. It’s about all of us getting through this together. Remember the greatness instead of picking at the small things. I think that’s what we need to do in all aspects of our life.”