ENTREPRENEURSHIP ANDINNOVATION ......
Straight Talk
An Interview with Kenneth G. Langone,
Chairman, President, and Chief Executive Officer, Invemed Associates, Inc.
and Director and Co-Founder, Home Depot, Inc.
(Note from Mr. Bernstein – Mr. Langone grew up in Brooklyn. His father was a plumber. He worked hard and went to college at BucknellUniversity. He eventually started Home Depot with around 20 employees. They now employ more than 300,000 associates inover 2,000 stores in several countries. Mr. Langone has donated hundreds of millions of dollars to university, medical and other charities.)
Is entrepreneurial instinct somethingyou are born with or can it be
developed?
I’ve always been in the service business. Icaddied, which is a 100 percent service job. Itused to be $3 a bag, but you would hope to get$3.50 or $4 and you knew that incremental businesswould be as a result of doing a good job.
Everything I did, I knew one thing: the better Itreated the customer, the better I did. Everybodywants to be respected. Everybody wants to becatered to. And it worked because I alwaysmanaged to do better with those accounts thanmy competitors. It was driven mostly by theidea of a good experience. But you don’t go tocollege to learn that. A lot of people just don’tcare. Customers allow you to have a business;when you don’t have customers, you don’t havea business. That’s common sense.
As your company has grown, how hardis it to keep effective control?
You start with the understanding that thefurther away you get from the customer, the lessimportant you are. So the CEO is at the pointof an inverted triangle because he’s furthestaway. He’s got division presidents, regional vice
presidents, district managers, store managers,assistant managers, department heads, etc.
Butleadership has a number of significant components:One, fairness; two, consistency or don’tbe a hypocrite, meaning don’t ever ask someoneto do something you’re not willing to doyourself; and three, work with people to showthem that they’re capable of so much more thanthey think they’re capable of. Leadership is byexample. Treat people in a respectful, fair, caringway and they will respond; they will go theextra mile beyond where you want them to go.That to me is the measure of true leadership,to get people to do so much better than theythought they could do. The minute I’ve made somuch money that I think I don’t have to do that,that will be the time to get out of the business.
In terms of policy issues helping tospur innovation and entrepreneurship,
does more need to be done? And can we getaway from policies quelching some of thisinnovation?
Most of Home Depot’s good ideas camefrom people on the floor. If you want to accomplishanything, you want to encourage peopleto bring forth ideas, even if they’re bad ideas;and if they’re bad ideas, don’t disrespect them. Say, we tried, we looked at them, they don’twork, and no hard feelings, but come backagain and keep trying.
You have been very focused on community,but with so much need out there,how challenging is it to decide what to becomeinvolved in? Is it where you can havethe most impact?
No. You have to have an affinity for whatyou do. I have always been around health careall my business career. I’m a great advocateof education, especially public education, becauseI went to a public school and all my educationis very meaningful to where I am today;same is true with universities and colleges. Ialso believe selfishly that the more educatedpeople there are in a society, the better chancethere is to do a lot more and make a lot moremoney.
Langone Athletic & Recreation Center, Bucknell University
(to see the modest plaque honoring Mr. Langone, scroll to end of file)
Langone Medical Center, NYU
Many feel recovery is going to be ledby private sector entrepreneurship and innovation.Do you worry that we’re losingsome of the entrepreneurial edge?
I’ve been encouraged to do things to create jobs, stimulated byknowing that the more jobs I create, if I do itright, the more successful I become. It’s likethat old saying, “the rising tide lifts all boats.”
The fact of the matter is there always are, andalways should be, winners and losers. As longas you have that system, it provides the greatestmotivation people need because they don’twant to be losers – those who are competitivewant to be winners.
The first responsibility I have is to figure out a way to address an opportunity in away that is good for me and for everybody elsewho’s with me. Home Depot began with threepeople 30 years ago, and now, we have 325,000
people who have good paying jobs and careerpath opportunities, allowing them to educate their children, live in their homes, drive their cars, and enjoy the American life.
What would those who know you bestsay about Ken Langone’smanagement philosophyand style?
You don’t work for him – you work withhim. Nobody works for you, everybody workswith you. It’s a common goal and a commoneffort.
Do you have a secret for your success?
Yeah, be born with a high energy level!
VOLUME 32, NUMBER 4 POSTED WITH PERMISSION. COPYRIGHT © 2009 LEADERS MAGAZINE, INC. LEADERS 43
Quotes from ltbn.com (ltbn.com = Let’s Talk Business Network) a 2014 presentation on Dunkin Donuts founder William Rosenberg:
1. You seek out the best people.
2. You compensate them the best.
3. You share your profits and equity with them.
4. You treat them with respect.
5. You share your goals and strategies with them. Create a family atmosphere, a sense of belonging, and give recognition for accomplishments.
6. You make certain your credibility is unquestionable.
7. You set the highest possible standards.
8. You enthusiastically instill in them your passion to achieve excellence in all your combined endeavors.
9. You give the responsibility and authority to achieve.