He built tradition of service
Waltrip has made SCI a formidable leader in U.S. funeral homes
“His influence has been pretty spectacular for all of us, whether you love him or you hate him.” David Dettling, owner of Dettling Funeral home
Elegantly attired, his white hair meticulously combed and parted, Robert L. Waltrip maintains the gentle demeanor and attentive gaze of a hometown funeral director. He keeps the sitting area by his office fireplace tidy, storing stray papers under crystal glasses in a corner bar nook.
But Waltrip’s office is a 12th-floor penthouse overlooking Allen Parkway and the company he founded is a multibillion-dollar empire. Service Corporation International owns and operates 1,522 funeral homes and 468 cemeteries across the U.S. and Canada, where it commands a 16 percent market share.
At 85, the now-chairman emeritus has turned over day-to-day leadership to others. But he still comes to SCI headquarters in Houston four days a week and says he has no plans to retire. He remains a central figure, sharing his sharp memories of markets and people with company executives. He advises them on who to trust based on deals he made or dropped across the decades.
Few in the public would recognize Waltrip or know what the initials SCI represent. But within the industry, both are formidable and well known.
“I don’t know anyone in the funeral business who hasn’t been touched by him in some way,” said David Dettling, owner of Dettling Funeral Home on Memorial Drive. “His influence has been pretty spec--
tacular for all of us, whether you love himor you hate him.”
Dettling made clear he’s on team Waltrip, who he said inspired him to become a funeral director, which he did after leaving SCI in 2007. He’d worked at corporate headquarters in the 1980s and ’90s on the referral of his grandfather, a retired police officer who got to know Waltrip as a funeral procession escort and became head of SCI’s security department.
“At one time or another, most funeral directors have worked for SCI locations or worked with SCI locations,” added David Pena, president of Integrity Funeral Care in northwest Houston. Small beginnings
The Heights Funeral Home was a financial wreck in 1951 when Waltrip, then a junior at Rice University, stepped in upon his father’s death. His father, Robert E. Waltrip, was a funeral director in Houston and had bought the funeral home in the 1920s from a friend facing financial trouble. When the younger Waltrip took over, he had a pile of unpaid bills and plans to expand.
“He was forced because of the credit holders to look at it as a business,” said his son, Blair Waltrip, who’s retired from SCI and remains aboard member.
At the time companies like McDonald’s and Holiday Inn were establishing chains to reach economies of scale. Waltrip had seen growing up at the Heights Funeral Home how the staff was always rushing to accommodate a customer, or sitting around bored between calls.
“I kept thinking there was a better wayto utilize people and equipment because that was the major cost of doing business,” Waltrip said. With multiple funeral homes in Houston, he would be able to send the staff and hearse wherever they were needed to keep them busy and ta mp down prices.
When Waltrip began expanding, few funeral directors owned more than one funeral home. He had big ideas from early onto grow the business even if the National Funeral Directors Association andothers in the industry opposed it and banks didn’t want to lend to him with a funeral home and a cemetery as collateral.
SCI bought and built funeral homes at a brisk pace for decades, reaching 135 locations in 1976 and 1,471 in 1995, the Houston Post reported at the time. In 1995 Waltrip told the Post that SCI’s expansion plan was “pedal to the metal.”
In 2015 there were more than 19,000 funeral homes in the U.S., the National Funeral Directors As- sociation reported, of which SCI owned 1,372, or about 12 percent. Meanwhile, 86 percent of funeral homes in the U.S. were still familyowned.
As competitors came into a market, Waltrip would beat them to the table by flying his small Aero commander turboprop plane to a funeral home that was rumored for sale. A child of the World War II era, Waltrip got his pilot license after admiring young men who become fighter pilots during the war. A welcome option for some
Some say SCI snatched up family-owned funeral homes, but others describe it as a welcome option for families whose children had other aspirations.
“On the one hand, there was anxiety,” said industry consultant Dan Isard, president of the Foresight Companies. “A lot of people hated SCI. They thought they were anathema to a very service-type of business. However, their hate would vanish when these owners reached retirement age.”
SCI was willing to pay for the reputations that came with the family name, Isard said. Prior to that, funeral homes were sold only for the value of the property and furnishings.
“Waltrip went from being demonized by many of my clients to being idolized when they got ready to sell,” he said.
Waltrip acknowledged in a book he commissioned to tell SCI and his family’s story that one of his biggest early mistakes was renaming a funeral home the company bought in Waco. Competitors there ran adds against the out-of-towners who took over the business. Afterward, SCI kept the family names attached to the community funeral homes it bought.
More recently the company has been making its Dignity brand more visible in its funeral homes. CEO Tom Ryan said one of his goals for the company is to make it a recognizable brand.
Many today also say SCI has made life easier for independent operators by setting industry standards and fighting on their behalf over the laws that regulate them.
“I think they’ve helped break a lot of barriers,” said Poul Lemasters, a funeral director and consultant and attorney for the industry. “They take on the fights and issues that a lot of people are not able to fight.”
For example, Isard said, SCI is able to fight lawsuits that set precedents for smaller funeral homes that lack resources and often have to settle. He cited a California case years ago in which SCI was sued over cremation authorization forms. SCI used forms similar to the rest of the industry, but it was the biggest target for lawsuits. The action led to legislation to make cremation forms more clear, Isard said.
Dettling at first was hesitant to talk about Waltrip for a news story. The company has gotten bad press over the years for issues like remains being mis handled or moved from cemetery plots — in some cases under previous ownership, other times by SCI employees. Critics say the company cut corners to maximize profits. Others point out that with 24,000 employees, SCI is bound to sometimes get a bad one.
“My respect for Waltrip is without limit, even though I’ve been an expert witness against the company,” Isard said, who testified in someof the cases against SCI.
In one notable case in 2003, SCI was sued for alleged grave desecration at one of its cemeteries in South Florida. Groundskeepers said they were told to unearth remains and dump them in the woods to make room for more bodies. Isard testified for the plaintiffs about standard cemetery practices.
The vice president of ethics and business conduct for SCI, Joe Hayes, said all employees do ethics training and his job is to continually reinforce the message of going beyond just doing the right thing and remembering that SCI’s customers are families coming to them on worst day of their life. If nothing else, doing the right thing is good for business and for avoiding lawsuits.
“Because there’s so much emotion around death, a little mistake can have big consequences,” Hayes said. Shift in the industry
The anxiety that SCI’s growth inspired early on seems to have subsided as people got used to the industry going corporate.
“I don’t see among independents this ‘I hate SCI’ as much any- more,” Lemasters said. “Because people are realizing you have to have a bit of a business mind, and SCI started that.”
Last year SCI brought in nearly $3 billion in revenue and $235 million in net income, with $9.5 billion in future revenue locked in with customers preplanning their funeral. In the past 10 years SCI’s stock has risen steadily from around $8 to $26, after dropping from a peak of $42 in 1998.
The company, which handled 316,913 deaths in the U.S. and Canada in 2015, argues that its size helps SCI serve customers better. The company arranges many high-profile funerals, including presidential funerals.
Earlier this year, SCI earned the President’s Award for customer service from J.D. Power, which does customer service surveys and has given the top award to 12 other companies in its 47 years. Its surveys showthat 97 percent of respondents would recommend SCI for funeral services, SCI said. Residence upstairs
In the Heights Funeral Home today, tall red record books going back to 1929 sit in a back hallway. The building has been built out around the original, where Waltrip and his family lived upstairs and held funerals downstairs.
“I remember I couldn’t bounce a ball when they were having a funeral because you could hear it,” he recalled.
That was back when streetcars ran down Heights Boulevard and for 35 cents Waltrip could catch a ride downtown, see a movie and get a James Coney Island hot dog.
Next to the upstairs apartment was a room with two twin beds for employees working the night shift. As a high school student, Waltrip helped out mowing the lawn. At 15, he drove the hearse and began working on his funeral director’s license. He never considered another profession.
Waltrip is one of just a few funeral directors in SCI’s C-Suite. The elevator requires a key to get to the 12th floor, where you step out onto a carpet too plush for heels, with carved wood door frames and marble-topped tables.
“In this company there are a lot of accountants, lots of finance guys. He’s the funeral director,” said Michael So per, whom Walt rip has mentored in building a similar but smaller conglomerate, Legacy Funeral Group, which has bought some funeral homes from SCI.
He said Waltrip reminds him and others, “Son, don’t ever forget the reason the phone rang is because somebody’s mama died.”