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October 31 , 2005
Value goes beyond numbers for Blank

BY eric rangus

There was perhaps no better inaugural speaker for this year’s Arthur M. Blank Executive-in-Residence Speaker Series than the title executive.

Blank, co-founder of The Home Depot, owner of the Atlanta Falcons and chairman of the family foundation that bears his name, spoke to a standing-room-only crowd in Goizueta Business School,
Oct. 20, about the core values that have driven him throughout his life.

He delivered an easy-to-follow outline of these values, and gave a variety of backing examples that encompassed his work both with Home Depot and with the Falcons.

People come first; success will follow. Several times Blank said he has approached his businesses using a bottom-up model. At Home Depot, the most important people in the company were not the executives, he said, but rather individual store workers—from the managers to the cashiers. They are the ones closest to the customers and, therefore, their input was valuable.

“Everything we did was focused on the stores,” Blank said. “Some people have the nerve to look at payroll as an expense. I see it as an investment.”

Listening well is the cornerstone of success. But it’s not the only thing. “It’s just as important to respond to what you are hearing,” Blank said. When he bought the Falcons, Blank asked the fans what they wanted. They replied: a winning team, a better game-day experience, lower ticket prices and more community involvement. That, he said, is what he tried to give them.

Blank lowered ticket prices, hired a new general manager and coach, and tried to employ players not only for their skills but their character. Before Blank bought the team, the Falcons couldn’t sell out the Georgia Dome (though their opponents sometimes did). Now, there are 48,000 people on the waiting list for season tickets.

Good ideas come from everywhere in the organization. “As the elevator goes up, the more removed you are from the people,” Blank said, touching again on the “people come first” theme. He added that when the ideas of employees outside upper management are utilized, the effect can be “liberating.”

Be creative and continue to change. Blank said he is happy with the improvements the Falcons have made to enhance fans’ game-day experience, but more can be done, and again his thoughts go beyond the bottom line. “What the fans give to us in money is secondary to what they give us in time.”

Lead by example. “We never asked our associates to do anything we weren’t prepared to do ourselves,” Blank said of himself and former partner and Home Depot co-founder Bernie Marcus. Blank told of walking store aisles, stocking shelves and even working the baler as a way of gaining credibility with employees.

After buying the Falcons, Blank resided in player accommodations at Furman University in South Carolina during training camp. His experience led to improvements when the team built new training and residential facilities in Flowery Branch, Ga.

To understand the fan experience, Blank traveled to a Falcons’ home game as they would—he found a parking spot and walked to the Georgia Dome. That led him to secure parking to accommodate 20,000 more cars, so that tailgating was easier and more enjoyable.

Creating value depends on values. A value-driven culture, Blank said, creates the basis to drive decision-making.

Give back. “Giving back to the community is essential; it is not an option,” Blank said. He gave several examples from his Home Depot days, such as in 1992 when the company did not raise prices in Florida prior to the landfall of Hurricane Andrew.

“Principles and community goodwill are central to running a sustainable business,” he said. “At the end of the long day, your success is not based on your return, but what we do in society.”

Blank spoke for about 35 minutes, then answered 30 minutes’ worth of questions. He talked about the feeling of watching someone else take control of a company he started (“It’s great to build on a base and give it to someone to take somewhere else.”), values in the National Football League (questionable behavior by players or coaches can be opportunities for owners to “accelerate cultural change”), and about how business schools need to do a better job teaching values and leadership.

“It’s easy to teach the math and technical side of business,” Blank said. “But there is not enough emphasis on what it means to be a leader. We need to impart the importance of being a member of a good organization. You do that through behavior. The right behavior will bring the right kind of results.”
Blank is the first of three speakers in this year’s series. Michael Eskew, chairman and CEO of UPS, will speak Feb. 15, 2006; and Birdel Jackson, president/principal of the engineering firm B&E Jackson and Associates, will speak April 5, 2006.

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