PART II of II
The Reflections of Ray Loewen, The Loewen Group
The recent movie “The Burial” is an Oliver Stone-style retelling of the tale of the demise of Ray Loewen and the “death care provider,” The Loewen Group. The movie tells the core of the story of the courtroom drama and how a US jury awarded a small-time funeral operator, who was out an estimated US$8m, with a whopping judgment of US$500 million.
Ray Loewen is caricatured in the movie—it makes for a better storyline. But who is Ray Loewen? Here are some extracts from my interview with Ray Loewen on September 16, 2005. The full transcript was published in Richard J. Goossen, The Christian Entrepreneur: Insights from the Marketplace.
RG: What did you perceive to be the strengths of your venture?
RL: The key strength for the funeral home company was our culture and our growth model. With a growth company you have to have a model or disciplined business plan, because the whole benefit of a growth company is your multiple of earnings and your stock price, and you have to have a model to get that benefit. You have to have the discipline of earnings growth, both top line and bottom line growth, year over year, which gives you that exceptional multiple in earnings, which makes capital much cheaper and gives you a huge advantage over your competitors. We had an year growth rate of 30% on a fully diluted basis. You can imagine what that does for your credibility and access to capital. With a bottom line earnings multiple of 30% compounded on a fully diluted basis, we more than doubled our share value every 3 years or so. Further, 90% of our revenue was coming from the U.S. That's why The Loewen Group was really one of the exceptional North American growth stories of its time.
RG: What did you perceive to be the weaknesses of your venture?
RL: On the funeral home side, I was often asked, what kept me awake at night? I would always answer that my biggest and only concern was the availability of senior head office management that could keep up with our growth.
RG: What was your most triumphant moment?
RL: I would view my most triumphant moment as listing The Loewen Group on the "big board" (the New York Stock Exchange), having breakfast with the Chairman of the NYSE, Mr. Grasso, and ringing the opening bell the morning of our listing.
RG: What was your worst moment?
RL: My worst moment was sitting in a Jackson, Mississippi court room and hearing a $500 million judgment against The Loewen Group. This meant that we had to post a bond of $625 million. Our book value was not even that large at the time even though our market capitalization was about $2 billion. I instinctively knew that our growth story was finished, barring a miracle.
RG: What are some things that you have found to be most personally rewarding and satisfying for yourself as an entrepreneur?
RL: I have the inner satisfaction of knowing that I did a good job of balancing the social and economic concerns of our business. During The Loewen Group years I used to talk a lot about the importance of paying equal attention to both wings of an eagle, one being that of people concerns and the other being committed to fiscal discipline. I also took great satisfaction in mentoring and growing people in the company.
RG: What are the three most important lessons you have learned with respect to starting and running a business that you pass on to an aspiring entrepreneur?
RL: I would offer three lessons: do thorough research; be patient and disciplined; and count the personal cost.
RG: How have you tried to practice your Christian faith?
RL: I have tried very hard to be a forgiving person. I have taken literally the Bible's admonition that vengeance belongs to God. I have taken seriously that God is faithful in good times and has purpose in bad times.
RG: Who was most helpful (and why or how) in addressing challenges?
RL: My wife has been the most helpful person in my life. While an entrepreneur may appear to be gregarious, they are often quite private individuals. So I would say my wife, family, and a few friends were most helpful in addressing the challenges of practicing my faith in business-and the more successful we got, the smaller this circle became.
RG: Is there any particular passage(s) of scripture that you have found particularly meaningful or that is inspirational to you?
RL: I will refer to two passages:
"I cry out to You, but You do not answer me;
I stand up, and You regard me.
But You have become cruel to me;
With the strength of Your hand You oppose me.
You lift me up to the wind and cause me to ride on it;
You spoil my success.
For I know that You will bring me to death,
And to the house appointed for all living.
Surely He would not stretch out His hand against a heap of ruins,
If they cry out when He destroys it.
Have I not wept for him who was in trouble? Has not my soul grieved for the poor?
But when I looked for good, evil came to me;
And when I waited for light, then came darkness. My heart is in turmoil and cannot rest;
Days of affliction confront me."
Job 30: 20-27
"In this you greatly rejoice, though now for a little while, if need be, you have been grieved by various trials, that the genuineness of your faith, being much more precious than gold that perishes, though it is tested by fire, may be found to praise, honour, and glory at the revelation of Jesus Christ..."
1 Peter 1:6-7