Arthur Blank Transcript

Arthur Blank is the co-founder of The Home Depot, a home improvement retail chain which today has a market capitalization of over 300 billion and over 400,000 employees. Arthur is also the author of the new book, Good Company, which comes out on September 15. Arthur has been named one of the world’s 100 greatest living business minds by Forbes in 2017, Executive of the Year 2018 by Sports Business Journal, and one of the 50 most influential people in Sports 2016, 2017, and 2018 by Sports Business Journal. 

Arthur owns the Atlanta Falcons NFL  team and the Atlanta United Soccer team. His family businesses also include the nationwide PGA Tour Superstore, three ranches in Montana, and Mercedes-Benz Stadium which hosted the 2019 Super Bowl. Under his leadership The Home Depot was voted America’s most socially responsible company in 2001.

How Home Depot Came to Be

Back in the 1970s Arthur and Home Depot co-founder Bernie Marcus were working together as employees of Handy Dan, one of the first home improvement retail chains. They were both fired in 1978, but they both knew they wanted to stay in the business of home improvement and so they decided to create their own store that could compete with Handy Dan, which was very successful at that time. 

In 1979 Arthur and Bernie started their first four stores in Atlanta, Georgia. As Arthur puts it, it was “a large warehouse, no frills, downmarket store, low prices, great service, great services, etc”. With those four initial stores they tested to see if their model would work. They really listened to their customers to find out what they wanted more of or less of, how the service was, how the hours were, etc…And they kept the things that were good and tweaked the things that needed work.

In 1981 they went public and opened up four more stores in Florida. A lot of people, including the executive VP of Goldman Sachs at the time, thought there was no way they could make their model scale across different states and so many stores. Fortunately, they were wrong. Arthur and Bernie had not only found a way to create a great culture, but they also found out how to keep it consistent across multiple stores and locations.

The secret to success 

Arthur and Bernie had found a way to not just have a successful business, but they were able to compete, and eventually surpass, companies that had been around for decades. Why? 

Arthur says, “I will tell you the conclusion I’ve come to is the only way we can do this, because I basically agree the culture is really the reason– it wasn’t really so much the products, or the pricing, or the assortment– all of that was terribly important, but the underpinnings all of what we did was this culture that was unique. That we only can do that if we begin promoting people based on culture first, not could they literally just write it down and make a list, etc, etc. But do they live it? Are they ambassadors for it? Do they represent our values day in, day out? And if the answer was yes to those questions, they were ready to be promoted as a store manager, district manager, district manager or whatever it may be”.

They knew that culture was the most important thing. That if the employees were happy at work, engaged, and well trained they would provide top notch service to the customers. They also knew they had to actively listen to customers and employees to continue to adapt. While other chains that had been around for 20, 30, 50 or more years continued to operate in the same ways without innovating or changing. 

From the time they started Arthur and Bernie knew they had to have core values in place. Those values were: put people first, listen and respond, include everyone, innovate on a continuous basis, lead by example, and give back to others. And those values weren’t just words that were written in the employee handbook or on the walls. They were values that everyone inside the company had to live and breath every day. And they were the guiding factors in who got hired and who got promoted. That is what has set them apart. 

What most leaders get wrong today

Arthur shares that successful leaders are ones that have a set of values and stick to them. They consistently lead based on those values–they are able to live those values out and articulate them to others. 

The problem, Arthur says, is that a lot of leaders today just want to send out a memo every other day reminding employees about the company values, yet they themselves don’t live them out. In order to be a great leader you have to not just talk the talk, you have to walk the talk as well. They have to lead by example, roll their sleeves up and set the pace for the organization. 

He also says leaders need to walk in the footsteps of your frontline employees. Don’t just read about how things are going, go down once and a while and experience yourself. That’s when ideas will come and things can adapt and change. Don’t just sit in your office passing down commands and reading reports. Get out and interact with everyone. 

The marriage of purpose and profit  

It seems that a lot of leaders feel that purpose and profit are mutually exclusive. You can focus on one of them or the other, but you can’t put both first. Yet, Home Depot seems to have mastered how to focus on both. 

Arthur says that it is more important now than ever to focus on both, because people are demanding it. Especially younger people, they want to be associated with companies who are sustainable that will be around for a long time, but they also want to be a part of something that is doing good. They want to be a part of organizations that are profitable, but also ones that give meaning and purpose to the work individuals are doing. 

Arthur believes the companies that want to win the best talent must find a way to focus on both profit and purpose. 

Leading by example 

Arthur is a leader that lives out the value of leading by example. And he has a lot of great stories of how he and other leaders have lived this value out. 

One story that shows how Arthur has led by example goes back to the early days of Home Depot. In order to fill their shelves they had a lot of products coming in which arrived in boxes with packing materials and so they ended up with a lot of corrugated materials. They were supposed to have compactors to break the boxes and other materials down to keep the space clear, but the delivery of the compactors was delayed and they didn’t get them until 2 or 3 weeks after they opened.

At one point there was so much material that there wasn’t any room to receive any more merchandise and everyone was working to get it cleared out. Instead of staying in his office and letting others clean it all up, Arthur rolled up his sleeves and started working on clearing it all up. In fact he ended up staying for 24 hours in the store cleaning up so they could have more room to accept more boxes. 

Another employee saw Arthur working nonstop and went to the store manager and said “You know, there’s this nut in the back. He’s been here for 24 hours, hasn’t left, he’s compacting all this stuff so we can get more merchandise up on the shelves. I mean, I don’t know who he is, but you ought to consider him for a promotion sometime”. And the manager had to let the employee know that Arthur was one of the founders. No one expected someone that high up to be down there working that hard. 

Arthur gave another story of how to lead by example. And this one is about the CEO of the stadiums Arthur and his family own, Steve Cannon. And Steve makes it a regular practice to go and do the work of the frontline associates. In fact he has a program in place called, you walk in my shoes. And one day he was working at a concession stand and while working there he noticed that the french fries were packaged in a way that caused one third of the fries to fall out. As a result of working in the shoes of frontline associates he was able to pinpoint a major problem and fix it to create a better customer service. 

That’s something that probably wouldn’t have been noticed unless he was able to experience it himself. 

Leadership is changing. What are the skills and mindsets you need to master in order to lead in the new world of work? According to over 140 of the world’s top CEOs there are 4 mindsets and 5 skills that leaders need to master. Learn what they are and hear directly from these leaders by downloading the PDF here.

Arthur also shared a time when he was at his guest ranch and was having a drink at the bar there and he overheard a customer talking about how a toilet was clogged up in the bathroom. Arthur went into the bathroom and fixed not just one but two toilets. And by the way, he didn’t tell anyone about it. He did it quietly and without complaint. But employees noticed and they were shocked that the owner would be fixing toilets. 

Why did Arthur do it? He says, “to me it wasn’t a big deal I just you know, I didn’t tell our guests because it’s not important but you know it’s important for the associates to feel there was no job beneath me. No job beneath that leader wherever it may be. That I’m there with them. I’m side by side with them.”

________________________________________________________________________________________
If you enjoyed the article and want more content like this here’s what you can do:

Subscribe to The Future of Work Podcast where I interview business leaders around the world each week.

Grab a copy of The Future Leader which has been endorsed by the CEOs of MasterCard, Best Buy, Oracle, Audi, Unilever, Domino’s Pizza, Ritz Carlton, Kaiser, and Marshall Goldsmith. It explores the most essential skills and mindsets for future leaders.

If you are or want to be an entrepreneur then my wife and I just launched a brand new podcast on how to Be Your Own Boss, called the BYOB Podcast where we share what we did and how we did it. You can subscribe to that here.

Comments