Beads of sweat roll down a young runner’s forehead, while his mind wills his aching body forward, stride after stride, as he continues on his grueling run. Some miles prove easier than others, but even during those less strenuous ones, he pushes himself to perform better than he previously has and prepares himself for the more difficult, uphill miles he knows lurk around the bend.
While his fatigued body wants to collapse as the miles slowly go by, he cannot stop — there’s work to do, and athletes are always looking to improve.
This same mentality has driven Arthur Blank’s career and created his success as co-founder of The Home Depot (he retired from the home improvement retailer in 2001) and now as owner and CEO of the National Football League’s Atlanta Falcons. Just as athletes have regimens of exercises they practice to improve and succeed, so does Blank. He adheres to a handful of simple philosophies that create and sustain success when continuously practiced.
“The whole notion that there is no finish line, which is a life philosophy of mine, reflects in the way you run a business, as well,” Blank says. “The day you think you kind of got it all figured out in any business is the day you’re going to get in trouble.”
Hire the best
When the Home Depot’s sales approached the $1 billion mark, Blank and his partner had lunch with a senior partner at Goldman Sachs, who told them that they’d need to change strategies when the company reached that magical milestone.
That didn’t sit well with Blank, who decided that if they continued hiring and promoting people who “bled orange” and bought into the culture, then the company could, indeed, sustain itself.
“We didn’t let people get in the game, as we grew the company, that were just good at getting things done as opposed to good at living who we are,” he says.
Instead of hiring many hourly workers at lower wages, Blank went after the best and paid them more because their knowledge and skills would benefit the customers. But he also held them accountable for creating sales and customer relationships
“They are reflected on the operating statement as a payroll expense, but I’ve always viewed them more as an investment,” Blank says. “We’ve always had the mentality that if we invested in the very best people, not only would they produce the best re-sults for us in the near term but would have capacity for growth and decision-making as any of the businesses have grown.”
When Blank bought the Falcons in 2002, the Georgia Dome, the team’s home stadium, sat about 40 percent empty on game days, and empty seats don’t help propel athletes to victory or generate revenue. To find a way to fill them, he talked to people who didn’t attend the games. He knew he’d hear complaints, but it was the only way to pinpoint the issues and find ways to fix them.
“A lot of leaders, they listen, but they don’t really want to hear the results to the answers and when the answers come, they find a way to reinterpret them based on their original perspective of what they think the answers should be,” Blank says. “They might give you their honest opinion of what they think you’ve got to do to improve your business, but then you put it through your own filter and look at it through your own rose-colored glasses, and you choose not to see it that way. You say, ‘That’s not really what they meant. They meant some other things,’ and you just believe what you want to believe.”
Blank says there are bright people throughout an organization, and leaders need to hear them out, as well. “You don’t have to be a genius to do it — you have to be bright,” Blank says. “Anybody can be bright. Anybody can listen and understand that there are lot of great ideas out there. … There are a lot of folk out there that don’t have titles that have an awful lot of good ideas.” And when senior leaders effectively communicate with those nontitled people, businesses grow stronger. After speaking with fans, Blank identified ticket prices and parking as prime concerns. So he lowered ticket prices on 30 percent of the Georgia Dome’s seats and secured parking — including space to tailgate — for season-ticket-holders. As a result, 30,000 empty seats were transformed into a waiting list 60,000 deep for season tickets.
Forbes estimates the team’s 2006 revenue at $170 million, up from $120 million in 2002.
“It’s very dangerous in any business for a minute when you put yourself above the customer or above the fan or above your associate,” Blank says. “There’s an awful lot of bright folks out there, and they can lead you down the yellow brick road if you’re willing to follow, but you have to be willing to follow.”
Look to the next level
While at The Home Depot, Blank often brought in outside people to meetings, which sparked conversation afterward.
“That first meeting was weird,” the visitor would say to Blank.
“Why was it weird?” he’d ask.
“It sounded like the company was really in trouble. You guys were talking about all the things you were doing wrong.”
Despite The Home Depot’s successful track record, Blank always led with a sense of urgency, continuously pushing forward.
“The best executives that I’ve ever worked with have always had a lot of confidence and a lot of security, but a lot of insecurity at the same time,” Blank says. “They’re always concerned with what happens if the market changes. … They spend time thinking about all the what-ifs as opposed to just what’s happening today.”
Leaders constantly have to assess if their team also thinks that way and can move to the next level. In the early 1980s, Blank had lunch with Charles Lazarus, who was running Toys “R” Us.
“Give me a lesson,” Blank asked Lazarus. “Tell me what we’re going to have to do.”
“I have to look at my company as we grow every year … and challenge myself,” Lazarus said. “Can the people you have around you take you to the next billion? Those are going to be the most difficult decisions you’ll have to make.”
Blank has found truth in that as he’s often concluded that people who worked their tails off and got down in the trenches simply didn’t have the skills to move the business to the next level.
“You constantly are pruning the tree around your senior management, making sure the folks that are still part of the tree are thinking in a similar way,” Blank says. “You constantly ask every year, ‘The people that have gotten me to this level, can they get me to the next level, or are there issues I need to deal with?’”
Blank says that when issues arise, look for a niche within the company where that person would succeed at the next level. If that person isn’t willing to change, then he or she may need to find opportunities elsewhere.
“That’s your last resort, not your first resort,” Blank says. “You have a big investment in that person. They work their tail off and, typically, they’ve produced at a very high level.”
Lead by example
In the early days of The Home Depot, Blank had every person in his senior management learn the business from the ground up.
“The first three months, you’re going to be working in the stores,” Blank told the first legal counsel he hired.
“I’m an attorney,” the man told Blank, looking at him like he was crazy. “Why would you want me to spend three months in the store?”
“You’re not going to understand the legal issues that are going to come across your bow or the environment they were created in or be able to talk effectively to our associates about what happened in stores unless you actually have some of that experience,” Blank said.
And Blank himself didn’t have immunity. He spent up to 50 percent of his time walking around the stores, working with customers and talking to associates. When he returned and sat in meetings, Blank could communicate problems and issues from the front line that nobody else knew about.
He did the same thing when he acquired the Falcons, living in the dormitories with players during training camp so he could see first-hand the issues facing larger men. Then he took those problems into account when he built their new training facility.
To solve the parking woes identified by fans, he and his team spent five hours walking all the lots within a quarter-mile of the stadium searching for inefficiencies.
“Great leaders have a lot of integrity, and they do what they say they’re going to do and they mean what they say,” Blank says. “They don’t feel like all the wisdom resides in their office and they’re happy to get out amongst real people and do real work and find out what the world is thinking about the company and the organization and what they’re doing.”
Under Blank’s leadership, the Atlanta Fal-cons Youth Foundation has given $6.4 million in grants to 194 nonprofit organizations across Georgia since 2002. And, Home Depot employees annually log tens of thousands of hours volunteering in their communities.
“Part of a piece of fabric, in a general sense, you’re woven into the life of the fabric, and when a company weaves its way into the life of a community, it becomes part of the fabric of that community,” Blank says. “It becomes very hard to tear it out of the community, and you don’t want to tear it out of the community. It’s part of what makes the community unique.”
Beyond helping others, service creates employee loyalty and buy-in because they know their employer is a part of something more than financial reports.
“They feel the company has not only a brain but has a heart and has a soul to it,” Blank says.
“They end up going home, instead of feeling they were at a job all day, that this was not a job — this is part of their life experience,” Blank says. “This is part of what I am as a person — the company I’m associated with.
“When you get to that point with an associate, it’s a very powerful place to be because without asking, without telling — and there aren’t enough hours in the day to tell and ask associates to do everything that you want them to do — they do it out of themselves for the right reasons. That’s a perfect environment.”
But leaders have to genuinely care about a commitment to service and view it as an opportunity instead of a responsibility.
“If you have a responsibility to do something, sometimes you do it, you’re not happy about doing it, but you do it,” Blank says. “If you have an opportunity to do it, and you still do it, that means you didn’t have to do it, but you did it for all the right reasons.”
Just as running plays correctly and cohesively allows a team to win, when an organization combines all of these business plays, it creates a financial victory.
“Our philosophy has always been on doing the right thing and having the right kinds of standards, and that by doing that, we’d produce the financial performance that was important to the organization,” Blank says. “It wasn’t based on first producing financial results. It was based on a set of values — living those values, supporting those values.” •