There's nothing like an oil bust to throw a little cold water on a company's growth plans.

The owners of Hobby Lobby Stores Inc., the largest privately held player in the $10 billion arts and crafts retail industry, discovered this the hard way. The Oklahoma City-based chain, which began in 1970 as a miniature picture frame maker, had grown to a dozen stores with annual sales of $22 million by 1984. Spurred by the prosperity of the Oklahoma oil boom, the owners had expanded their original product mix of arts and crafts supplies to include expensive gifts, luggage - even ceiling fans.

"We were on a fast track and there was money going," said David Green, the 57-year-old president of Hobby Lobby and patriarch of the family that owns the chain. "We built the business with a sort of false sense of security that [the boom] was going to continue."

It didn't.

Neither Hobby Lobby nor its sister companies had ever been anything but profitable. In 1985 - the year the oil boom went bust - they all lost money.

That unexpected turn of events was a wake-up call for the Green family. "We really had our faith in our diversity. ... If one [company] loses [money], we've got the others," Green said from his office at Hobby Lobby's sprawling corporate headquarters in southwestern Oklahoma City. "We really had a lot of confidence in that rather than in God."

The Greens responded by looking to God and to each other for strength and guidance. Prayer had always been an important part of their lives, but that year they spent even more time on their knees.

"It was a real learning experience for us to know that our faith has to be in Him," Green said. "I think we knew that God wanted us - our hearts and our minds - to be different. For me, the difference was to give Him glory for all, not just from my lips, but in reality."

The oil bust didn't force Hobby Lobby to close any stores, but the family businesses did lose more than $1 million in 1985. A year later, however, each one had returned to profitability, and they've been making money ever since.

"We cannot even explain how that can be done except that God miraculously turned us around," Green said. "But it was done on our knees."

Looking back, Green believes a year in the red was good for Hobby Lobby because it taught the family that they couldn't run their company without God's blessing. "It was probably the one best lesson we've ever had, but we don't want to go to that school again," he said.

Hobby Lobby officials haven't forgotten what they learned from the oil bust, but they haven't let the experience hamper the company's growth, either. In 1990, Hobby Lobby's 24 stores posted sales of $57 million. By the end of this year, Green expects to have about 210 stores with annual sales of about $820 million. And that doesn't include revenue from sister companies such as Mardel, a 12-store chain that sells inspirational books and gifts, office supplies and educational items; and Worldwood, which manufactures craft wood products, candles, T-shirts and other items sold primarily at Hobby Lobby stores.

Michael's Stores Inc. - the largest player in the arts and crafts industry with 502 stores and annual sales of $1.6 billion - can grow faster than Hobby Lobby because it is publicly traded. But although Hobby Lobby has ambitious expansion plans - Green projects sales of $3 billion in 10 years - the owners have no intentions of taking their company public. For one thing, they use their profits to pay for new stores, so they don't need to raise money through stock offerings.

More importantly, remaining private gives them freedom to use their income to further the Kingdom of God - without having to worry about what shareholders might think. Right now, Hobby Lobby and its sister companies give more than 10 percent of their after-tax profits to ministries such as Book of Life International and Wycliffe Bible Translators, and that percentage grows each year.

"There may be a day and time that we'll give 100 percent of our profits to ministries; if we stop growing, we could do that," Green said. "That's our intent - to grow the ministry of this business."

STARTING SMALL    When Green and his original partner, Larry Pico, decided to start their own business in 1970, they had no idea that it would one day turn into a multimillion-dollar corporation. They borrowed $600 to buy a molding chopper, set up shop in a garage and started making miniature wooden picture frames. Green's two sons, Mart and Steve, got their start with the company while they were still in grade school, assembling picture frames for 7 cents each. "That was pretty good pay back then - you could do a lot in an hour," said Mart, now president of Mardel and secretary/treasurer of Hobby Lobby.

The first Hobby Lobby store - all 300 square feet of it - opened in 1972. But it wasn't until 1975 - when a second, much larger, retail outlet opened - that Green left his job as a supervisor for the TG&Y variety-store chain to become a full-time entrepreneur. "I left TG&Y earning about $26,000 a year to earn $13,000 for myself," he said.

Hobby Lobby grew gradually during the 1970s and 1980s. The owners expanded throughout Oklahoma, then into Arkansas, Kansas, Texas and Colorado. Today, the company has 196 stores in 20 states, all within 1,000 miles of its distribution center in Oklahoma City. The stores, called Hobby Lobby Creative Centers, carry a wide variety of products, including silk flowers, floral arrangements, fabric, baskets, picture frames, wearable art, party supplies, home accents and seasonal merchandise.

Hobby Lobby opens about 30 stores a year now, and within the next decade, the company could have 500 stores - all in that 20-state region, Green said.

The sister companies are separate entities, but all are owned and operated by members of the Green family. They include Greco Frame & Supply, the original frame manufacturing company; Mardel, founded in 1981; Worldwood, which was established in 1989 to make store fixtures and now manufactures a variety of other products; and Crafts Etc., an arts and crafts wholesaler that started in 1977.

With the exception of Mardel, each sister company does more than 90 percent of its business with Hobby Lobby. About 10 percent of the goods sold at Hobby Lobby stores are made by its sister companies. "We just see the opportunity," Green said. "If we're buying millions of dollars of product, why don't we make this ourselves and make the profit ourselves?"

After operating from several sites over the years, most of the Hobby Lobby organization is now housed in a 1-million-square-foot corporate office/warehouse complex. This expansive, Mediterranean-style facility with beige stucco walls and clay-tile awnings was completed in 1995. A 722,000-square-foot warehouse that houses Worldwood and Greco was finished in January, and construction of a new state-of-the-art, 2-million-square-foot distribution center - to be completed in three phases - will begin this summer.

"We're never caught up," Green said. "Every time that we build a building, we think, `OK, now we're going to bring everything into this area.' But there's still another 250,000 square feet off this site that we're using."

Over the years, Hobby Lobby's growth has been kept in check by Green's wife, Barbara. "She keeps us from going too fast, from going over the cliff," he said. "She keeps a certain balance in our lives. ... Without her, we'd have 480 [stores], and we'd be broke."

A MEANS TO AN END     Although Hobby Lobby makes its money by selling grapevine wreaths, fabric paint, holiday decorations and floral foam to customers throughout the Midwest, the Green family believes the company is really in business to help tell the world about Jesus Christ. It's that purpose - not the goal of beating its competitors or opening stores in all 50 states - that motivates Hobby Lobby to expand.

"The larger and more successful Hobby Lobby can be, the better we are able to help in fulfilling the Great Commission," said Steve Green, the other half of the grade-school picture-frame assembly team, who now serves as senior vice president.

"We see this as a ministry - it's just a means to an end," his father added.

Hobby Lobby is somewhat involved in what Green calls the "social Gospel" - Barbara Green heads a committee that raises money for the homeless, for example. But the "saving Gospel" is at the heart of the company's ministry efforts.

"If I had my druthers, I would rather have someone die knowing Christ with an empty stomach than not knowing Christ with a full stomach," Green said. "A businessman, more than anybody, ought to understand about the Great Commission and the priorities in life because that is bottom line. That bottom line is that we're here for a short time and only what we do that has eternal value to it amounts to anything."

The Greens don't particularly like the word "ambition" - they prefer to talk about "purpose." But they readily admit that Hobby Lobby is extremely ambitious, if that means the company is motivated by a desire to spread the Gospel.

"When you really key [in] on the Great Commission and have a deep desire to affect this world for Christ, then you have big ambition," David Green said. "You don't see a point where you can stop, because if there's someone that doesn't know Christ - one person - then there's more work to be done."

CLEAN HANDS, PURE HEARTS     So how do Hobby Lobby executives stay focused on fulfilling the Great Commission without allowing themselves to get sidetracked by the pursuit of money or material possessions? By discussing their motivations at monthly officers' and directors' meetings and by maintaining an active prayer life, Green said.

"In my life, I felt the Lord has told me that we've got to have clean hands and pure hearts if we want to continue in this ministry," Green said. "And by the way, in the meantime, we may end up with a big house, but that's not the ultimate goal."

Hobby Lobby doesn't have a written policy that specifically addresses corporate ambition, but the topic is covered by the company's purpose statement, which begins: "In order to effectively serve our owners, employees and customers, the Board of Directors is committed to: honoring the Lord in all we do by operating the company in a manner consistent with Biblical principles."

"I guess our policy is the Bible - we just try to live by God's Word," Green said.

That includes running the business at God's speed, Steve Green said.

"You can go too fast and push more than you should, and you can get sloppy and sit on your laurels and build your barns and think you're done," he explained. "I don't think God's pleased with either one. [He] wants us to go at His pace."

This principle guides Hobby Lobby officials as they negotiate leases for new stores, Steve Green said. "When we come up with a price that we feel is right, if it doesn't work ... we just feel like God's turned that one down," he said. "I think it's - in a small way - one of the ways we just try to let God be the director of growth as opposed to forcing [it.] You have to give God the opportunity to close a door because you can just about force any door open that you wanted to."

That's called living a submitted life, David Green said. "It's OK to have plans, as long as they're submitted plans in your heart," he said.

When a person has submitted plans, he never gets himself in a position where he has to have something - a store or a warehouse or anything else, Green said. "We don't know what's best; He does," he said. "We have to have a way to walk away - we don't have to have this at any cost."

This mind-set has helped Hobby Lobby officials in their lease negotiations, Green said. "Many times we just say, `This is it. If God wants us to have this, then this will work,' " he said. "It's when we're not submitted that we get in trouble."

For Green, the Old Testament record of the nation of Israel illustrates what can happen when plans are submitted vs. when they are not. When the Israelites were obedient and submissive to God, they won great battles - battles they never should have won, he said. But when they were disobedient, they were soundly defeated.

"I think in the business world we see the same thing," Green said. "We see the odds against us; we see our major competitor [with] hundreds of millions of dollars that he's receiving by going public. We see ourselves sometimes to be small compared to that, and yet we see our profits and the strength of our company to be much, much stronger than the giant."

Submitting Hobby Lobby's corporate ambitions to God means being willing to accept the good times with the bad. "Even if it goes sour, if I'm submitted, then that's His will and that's OK with me," Green said. "I have total peace when it's not in my hands. We have been in charge - I think I was more in charge pre-1985 than I should have been - and we don't want to be in charge."

Advertising the Gospel

Twice a year, 30 million people around the country are exposed to the Gospel through a rather unlikely source - an advertisement in their local newspaper.

On Christmas and Easter, Hobby Lobby Stores Inc. spends about $400,000 to run full-page holiday messages in 125 newspapers that normally carry the company's weekly ad - from the Chicago Tribune to the Houston Chronicle. But these ads don't offer half-price deals on silk flowers or hot glue sticks. In fact, you'll have to look closely just to find the Hobby Lobby name. These holiday messages are designed to promote one thing - a personal relationship with Jesus Christ.

The first ad, which was considerably smaller than a full page, ran on Easter 1996. Hobby Lobby President David Green was inspired to run the ads after flipping through the newspaper the previous Christmas. Although some ads said "Season's Greetings" or "Happy Holidays," he was struck by the fact that none said "Merry Christmas."

"I saw how ... Christ has been continually pushed out," Green said. "The Lord just convicted me that I had become part of that." The holiday messages are one of the most visible ways the company shows its owners' commitment to Christ. In keeping with a corporate goal of helping to fulfill the Great Commission, Hobby Lobby also is a key supporter of Book of Life International, which produces The Book of Life. The book, which clearly explains the plan of salvation in a harmonized version of the four Gospels, has been handed out to about 50 million school children throughout the world.

The organization hopes to distribute 19 million copies this year, and Hobby Lobby will finance 13.5 million of those, Green said. The company's goal is to fund the printing and distribution of 100 million copies by 2002. A tiny open book at the bottom of the retailer's weekly ad tracks the number of books the company has funded so far; it's 15 million right now, but it's expected to go up to 22.5 million in July. Hobby Lobby also helped kick off Bearing Fruit, a marketing campaign that encourages followers of Christ to read the Bible every day. David Green's son, Mart, heads up this project, which began last Thanksgiving with a full-page ad in USA Today.

Bearing Fruit grew out of a meeting Mart Green had with representatives of the North American Forum of Bible Agencies. "The Lord opened all these doors, and we came out of that commissioned to go out and rally businesses to take these messages and sponsor them," he said.

Bearing Fruit scheduled 234 television spots on Oklahoma City stations in February. Eventually, Green hopes to see the campaign extend to billboards, professional trade publications and national newspapers. His vision is to recruit people who will meet with business leaders and encourage them to tithe from their advertising budget to sponsor these ads.

"If you're going to spend $10 million for advertising, spend $1 million of it [on something] that really does some good, that does something for the Lord," he said.

"Submitted Plans." Excerpt from Life@Work Vol. 2, No. 2 -- Innovation March/April 1999. Written by Lois Flowers.   Used by Permission. lifeatwork.com.   Content distributed by WorkLife.org used for non-profit teaching purposes only.