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HEB Founder Culture 107 Years On

Kent Rhodes

On November 26, 1905, Mrs. Florence Butt took out a $60 bank loan to open the first H-E-B store in Kerrville, Texas. The store was run on the ground floor of the Butt’s house and was named C.C. Butt in honor of Florence’s husband, Charles.

Now being run by a third generation H-E-B has grown from a single local grocery store into a chain of nearly 400 stores generating annual sales in excess of $18 billion, currently operating in two countries. This company is another prime example of how a founder’s values, translates into a culture that informs every aspect of the successful family enterprise.

In the early 1900’s, groceries were traditionally delivered to a customer’s home and for Florence’s three sons, this meant delivering groceries to those customers using the boys’ outgrown baby carriage until the family was able to save up enough money to purchase a little red wagon to serve the purpose. Florence created an environment that supported, and in fact relied on, family participation, which has translated into a culture that views participation as a family privilege that is extended to employees today.

As the first store became a hit in the community, the family hired their first non-family employee, G. Leland Richeson, to assist with the growing demand and in 1919, 22 year old Howard Butts returned from serving in World War I and took over running the day to day operations of his mother’s store.

From the beginning, Howard was keen on upholding his mother’s notions of customer service, treating employees as extended family members and giving back to the community, even as the company continued to grow. He was invested in the success of the family’s business and was highly motivated to grow it. By the early 1920s, stores were added in the towns of Junction and Del Rio, Texas. Howard also expanded the selection of products offered, tailoring the inventory to consumer preferences.

One of the strongest cultural artifacts of this famous Texas family enterprise is a commitment to charitable giving, both corporately and through employee involvement. The H-E-B Excellence in Education Awards celebrates public school professionals whose leadership and dedication inspire a love of learning in students of all backgrounds and abilities. In addition, H-E-B donates 5% of its pretax profits to charity.

While Florence could not have imagined the eventual impact her approach to running her business would have, it is her direct influence that still drives the company and its fierce employee and customer loyalty today.