Royalty's Andrea Greenleaf: Focus on Leadership - Feb. 2014

Interview by Kemp Harr

Andrea Greenleaf took over as president and CEO of Royalty Carpet Mills after her father, Mike Derderian, passed away unexpectedly in April 2013. A gemologist by training, Greenleaf entered the family business, at her father’s request, in 1992 and oversaw the company’s newly acquired PacifiCrest commercial division. In 1999, Royalty also acquired Camelot Carpet Mills.

As a female-run, California-based mill, Royalty has a unique position in the carpet market, and Greenleaf has plans to capitalize on those distinctions, growing the business that her father started in 1969 with a 220-volt outlet and a single tufting machine. 

Q: Tell us what it was like to grow up in California as the daughter of a carpet mill owner. 
A: What’s not to love about California? It’s 82 degrees when the rest of the country is freezing. Within an hour or two of driving, you can be at the ocean or the desert or the mountains. 

I was in my teens when my dad started Royalty, which he ultimately built into a profitable West Coast carpet mill. In his early career, he sold Dictaphones and shoes, among other things. His entry into flooring was a fluke. A friend told him that he knew someone looking for an aggressive young salesman to sell carpet. My father said that he didn’t know anything about carpet but could sell; as a result, in 1959, he was hired for a sales position with distributor Wm. H. Green Company. And in 1963, he took as position as West Coast sales agent with Purvis Wade Carpet Mills.

After his success on the sales side of flooring, another friend said, “Why don’t you think about making your own carpet?” So my dad went out and found a garage with a 220-volt outlet and got himself a tufting machine. He started manufacturing carpet in 1969 and, soon after, opened a dye house.

Q: You studied to become a gemologist. Where did you think that education might take you?
A: That was a joyous time, and I honestly thought that gemology would be my career. I went on to teach at the Gemological Institute after completing my education, and I believe I would have remained there for the rest of my working career had I not come into the family business. Gemology is a fascinating field. I saw things that most people will never see. I even wore Marie Antoinette’s earrings!

I’ve always had an affinity for jewelry, as did my father. In fact, one of his early jobs was as a bench worker, repairing jewelry. I once asked him why he didn’t stay in the jewelry business, and he said, “Because I didn’t want to be hunched over when I was old!” 

Q: You complied with your father’s request to actively join the family business in 1992. Was that a tough decision at the time? 
A: It was a very tough decision. I knew that once I came back to the family business I would never leave. It is difficult to give up a career that you are passionate about, even when you do it for someone you love. I spent a lot of sleepless nights missing gemology. But now, of course, I know that it was the right decision, and I love this business.

Q: What are your priorities in leading Royalty? 
A: I have a vision for Royalty in the next three to five years, a big vision, and I’m busy now building out the strategy that will get us there. We have to put the right team in place to get us from point A to point B. Building the team and investing in the right areas on top of running the day to day is challenging. 

I’m also focused on positioning the company and promoting what competitive advantages it has as a West Coast brand. Before I took over as CEO, my work was more focused on the commercial side of our business. 

Q: What did you learn in your first career in gemology that is applicable to running Royalty Carpet Mills?
A: As a manager in gemology, I learned a lot about letting people make their own decisions—right or wrong—not to micromanage, to let people thrive. It’s also important for us to create the type of work environment that encourages thoughtful decisions. Plus, I want people to be happy here. We spend too much time working not to be happy in the work environment. 

Q: What are the pros and cons of being a female CEO in the floorcovering business? 
A: I think differently than the good old boys! This shows in the new styling of the carpet and in the new look of the brand. As a woman, I understand what the ultimate consumer is looking for because I’m demographically part of the same group. 

And I’m getting rid of those hideous room scenes! How many decades has it taken for someone to figure out that they are ugly? I am going to cause a stir for the complacent, we’ve-always-done-it-this-way people in the industry.

Regarding disadvantages, I haven’t found any yet! 

Q: For many years, outsiders have felt there should be more women leaders in this business, especially since women are the target consumer in the residential sector. Are you driven to prove that this is great place for women to lead and be successful? 
A: I believe that women should take more leadership roles in the industry. Women look at things differently—not better or worse, just differently. If women and men work together, gleaning the best from each perspective, we’ll achieve more.

Q: This year, you have invested heavily in changing the company, inside and out. As you take over your father’s role, how do you decide what to change and what to keep? 
A: That’s an easy one. My father set the foundation upon which Royalty was built, and those things will not change. What’s changing now is the look of Royalty, both in the newly remodeled corporate office and in the updated samples and innovative new display. I bring a woman’s perspective to Royalty, and that will inherently bring subtle—or in some cases, not so subtle—changes. 

Q: Royalty describes itself as being “a California manufacturer.” What does that mean from a styling perspective? 
A: There is a look to California products that is different from East Coast mills, even different from East Coast mills that manufacture in California. Their color lines are heavier, deeper. Ours are softer, more pastel-inspired, more balanced.

Q: Where does polyester carpet fiber fit in your business model as a middle- to high-end supplier? 
A: With a history of producing branded nylon 6,6 carpet, Royalty has built its reputation on producing quality products with beautiful aesthetics, and we will continue to do so. However, our customers have asked for polyester options, and it would be shortsighted not to provide them with a select offering of products. 

In addition to these, we are also launching products made with Ascend’s Ombré branded fiber, a nylon 6,6 fiber with unique aesthetics. There are other mills working with Ombré in R&D, but I believe we’ll be the first to launch products using it. Royalty will continue to build its reputation around using performance oriented fiber systems like Stainmaster and Ombré. 

Approximately half of Royalty’s products are made with Stainmaster fiber. However, some industry buying groups that are very loyal to Stainmaster are looking outside the box to provide their customers with a larger offering, and we want to supply those products to them as well. 

Q: What is causing the share shift from soft surface to hard surface, and how can it be stopped? 
A: Within the carpet industry, many mills have been shortsighted. They have sold product that has not held up to the consumer’s expectation. Why is the carpet industry trying to put itself out of business by making poor quality products? If a customer goes to a retail store and buys a carpet that looks like hell eight months later, are they going to buy carpet again? No.

If the carpet industry wants to stay in the carpet business, it needs to offer a quality product at a quality price. Had the industry maintained a focus on quality, the consumer wouldn’t have been as motivated to make a shift to hard surface flooring. If we don’t offer consumers the best quality we can, they won’t come back—and I can’t make enough quality carpet to fill everyone’s homes in America, though I’d like to.

Q: You told me last year that one of your goals was to expand the specified commercial sector of your business, which is sold under the PacifiCrest brand. How do you plan to balance your time and resources between that goal and the goal of continuing to build your residential business under the Royalty and Camelot brands? 
A: We are in the process of expanding our contract division, PacifiCrest. We have a new vice president of sales and are awaiting the delivery of some exciting new tufting equipment. Our goal is to grow all divisions of Royalty, and, to that goal, all divisions will get the attention they need.

Q: The savvy specialty retailers are growing tired of competing with the home centers and category killers. What solution do you offer these dealers? 
A: The specialty retail channel is the backbone of Royalty and always has been, and we will absolutely make it so mom-and-pop retailers can be competitive. This requires pricing discipline that some of the bigger mills don’t understand. We structure our pricing to allow our independent retail partners to compete on a level playing field. We have also ramped up our sample and service support.

Q: What is your forecast for business conditions over the next several years? 
A: I wish I had the crystal ball that would allow me to see several years down the road. I am optimistic about modest growth for the economy but robust growth for Royalty, as we improve our position in the marketplace. 

Q: What keeps you up at night? 
A: Besides my husband’s snoring? I have a lot of ideas, and it is sometimes hard to move fast enough to keep up. I don’t think there are any major obstacles in our path. I am providing our team with all the tools they need be successful.

Q: What kind of gemstone is Andrea, and why? 
A: I’m probably still a gemstone in the rough. I don’t know what I’ll be when I’m all polished out!