How Wayne Huizenga perfected the art of starting and growing a business

“In a Blockbuster video store, there is nothing proprietary,” Huizenga says. “Anybody can go open a video store anywhere, any time. If you want to have the best locations in a given market, you want to move quickly to tie up those locations. You don’t want a competitor to take the best location. The reason for moving quickly is to tie up the locations.”

Huizenga also created AutoNation, the first nationwide auto dealers. He developed a one-price strategy, hired management with the expertise to run the company and grew it to be the largest auto dealership in the nation, now with more than 400 franchises in 24 states.

He also formed the company Extended Stay America with an associate. In its first year, it opened 62 locations. The idea was to provide a no-frills service for people who needed to stay more than a few nights at a hotel. The rooms came with a complete kitchen, but properties have minimal lobby space and sheets are only changed twice a week to cut costs. When it was sold in 2004, Extended Stay America had almost 500 hotels in 42 states.

“Extended Stay America was fun because (we were) starting a new concept,” Huizenga says. “There were no extended stay hotels; there wasn’t anything like what we were doing. A lot of people were skeptical. We had to convince Wall Street that this was the way to go. That was a different challenge.”

Building a team
Huizenga says that he could never have achieved such success without the right managers. “The most important factor is people,” Huizenga says. “We hear it said all the time. It’s said so much that it goes in one ear and out the other. But really, people are the name of the game. That’s really the secret.”

It’s so critical that Huizenga repeatedly employs trusted veterans in new ventures. George Johnson, a franchisee and later president of Blockbuster Video, became a partner in Extended Stay America. Another Blockbuster veteran, Steve Berrard, heads Huizenga Holdings latest venture, Swisher. “If you make a mistake, you probably won’t know you made a mistake for a year, a year-and-a-half,” he says. “Then you have to quickly correct that mistake. Now you’re behind the eight ball because you’ve lost a year-and-half. Then you have to change culture and all that kind of stuff again.”

So Huizenga is very careful about who he brings into a company.

“Everybody I hire is smarter than I am,” Huizenga says. “A lot of people don’t want to hire people that are smarter than they are. I know there are a lot of things I’m not capable of doing, but that doesn’t stop me from hiring the right person who can get it done. “So, I’ve never been frightened by hiring people who are more intelligent than I am, that are smarter than I am. There’s a difference between being intelligent and being smart. People have to have both.”

And, of course, there are the requisite people skills.

“Leadership is the key,” he says. “You don’t have to know anything about the business. We’ve been in a lot of businesses that we’ve never been in before. (We) still built them up, and then you’ve got to hire the right people — like Mike Jackson (chairman and CEO of AutoNation) to come in. I could not do what Mike Jackson does. He knows more about the car business than I do.

“The best thing I could do was hire Mike Jackson.”

Jackson was an auto industry veteran and a great fit to lead AutoNation with his experience as managing partner of a group that ran 11 car dealerships before being named president and CEO of Mercedes-Benz USA. He had the hands-on management experience at the franchise level, plus the big-picture auto industry corporate experience necessary to run a public company.