387: Arthur Blank - Owner Of The Atlanta Falcons: How Purpose & Profit Go Hand-In-Hand

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Episode #387: Arthur Blank - Owner of The Atlanta Falcons

Notes:

• His Dad died when he was 44 years young, leaving his business to Arthur's mother. Arthur's mom took over and built a successful company. He learned to be principled and values driven from his mom. His mom always told him, "Principle matters."
• Arthur got fired from his job at Handy Dan in 1978. He didn't take it personally and founded The Home Depot with Bernie Marcus.
• At the original Home Depot headquarters, he and Bernie Marcus shared a bathroom between their offices. In the hallway outside the bathroom, they hang up press clippings. Not the accolades, or the awards won, but the negative stories and criticism. Why? You cannot have complacency or believe you are beyond reproach. Must always keep striving to get better.
• How did they duplicate the original Home Depot culture when they expanded beyond their first four stores?
  • "You must always promote people based on them living the values of the company. Ahead of everything else."
    • "The culture is critical."
    • Ask, "Can they lead using our values?" --> Read the book, The War For Talent
• How did they maintained the culture as they acquired nine additional stores? Originally, it was an issue. "It was like changing the tires on a car as it was driving 30 miles per hour."
  • "We had to self impose slowing down the growth."
  • Must train the team on the culture
• "We didn't have money for training, but we did it anyway." To build a long term, sustainable business, you must focus on training.
• "You have to have a caring mentality. It takes time. I'm only interested in relationships. It's all about building long term relationships."
• Arthur tells the story of when he came to an agreement to buy the Falcons from Taylor Smith -- He booked a nice hotel suite, had dinner/wine, etc… He wrote on a napkin, “For Atlanta and the Falcons, $545 million. To the heritage and the tradition, in the past and the future.” ---> Taylor asked what you were doing and Arthur said “This is a bond between the two of us.” And further, “Important deals don’t get done on paper napkins, it had to be a cloth one.” → That napkin is displayed at the training facility of the Falcons and the team is now worth 5 times what he paid. "It was a win-win negotiation."
• In the lobby of your Atlanta offices, stands a custom bronze statue of a Sioux warrior in full battle regalia. He cannot move from his position on the battlefield -- he will stand his ground until victory or death. His chin proudly lifted and eyes scanning the horizon, he raises his bow, an arrow poised on the string. It’s entitled, Point of No Return. It depicts a time-honored tradition of Sioux Leadership.
  • "You have to lead from the front."
• Arthur names all of your conference rooms after personal heroes (Kurt Hahn is one of them, he is the founder of Outward Bound) -- “To strive, to serve, and not to yield.”
• When he was the new owner of the Falcons, he walked to the back of the plane where the players were sitting and said, “Don’t worry, I’m not going to try to coach you, but I need to know, what can I do for you? What do you need?” (“The Best Think Tank Any Company Could Ask For) -- “That one hour flight was worth a dozen strategy meetings with the team’s executives or coaching staff.” (You need to have a front line obsession, Chris Zook -- Get to the people who really know. The ones closest to the action)
• Innovate Continuously -- Need non stop reinvention. Leaders need to ensure that the road is cleared of unnecessary speed bumps and overly stringent traffic rules. Too much bureaucracy will kill innovation before it has even begun. Top down management structure will always constrain people’s entrepreneurial spirit. --- The “Invisible Fence” style of management.
• “Hire people who are overqualified.” -- Arthur had lunch with Charles Lazarus one day, the founder of Toys R Us, and he said, “the hardest moments are when you have to look at a person who helped you get to $1 Billion and realize that person can’t help you get to $10 Billion.”
• “Treat every team member as a free agent” -- Never take people for granted. "They should be committed because of the culture, not the contract."