Arthur M. Blank ’63, H’98
Owner and Chairman, Blank Family of Businesses; Co-founder of The Home Depot
“I think of myself primarily as a servant leader. My job is simply to support the people in our stores, to create a workplace that excites them. If I do my job well, they’ll enjoy personal growth. And from that, the company will find financial growth,” says Arthur M. Blank ’63 H’98
Indeed, the formula is working. The Home Depot, co-founded by Blank and Bernard Marcus, has grown since 1979 to 350 stores in the United States and Canada, with total sales in 1994 exceeding $12 billion, by far the largest home improvement retailer in the United States.
Back in 1979, the picture did not look quite so optimistic for Marcus and Blank. Both had been dismissed by their hardware retail employer, but responded with resiliency. They joined forces to fill a need they had observed in the industry: a hardware store with value and customer service. Their new store, The Home Depot, was built around a commitment to the “do-it-yourself,” or DIY, business. Low prices, high volume, and, most importantly, service and quality remain the cornerstones of The Home Depot.
Employees are the other essential element in The Home Depot equation. They are encouraged to hold a stake in the company through stock ownership. Offsetting our conventional ideas about organizational structure, Marcus notes that, “the employee who rings up the sale is the highest guy in the company.” Employees describe The Home Depot as “our store” and shoppers as “our customers.” Home Depot employees are well-known for their loyalty. After Hurricane Andrew struck southern Florida in the fall of 1992, some employees barricaded themselves in their stores to prevent looting even before they had returned to their own homes. When the stores reopened, they sold plywood and other essential supplies at a loss.
Arthur Blank was already an entrepreneur as an undergraduate at Babson, where he ran both a landscaping business and laundry service, and has not lost the hands-on approach to management. Bernard Marcus, the son of Russian immigrants, put himself through the Rutgers College of Pharmacy and worked in pharmaceutical sales before switching to retail and then later to hardware retailing. He still loves nothing so much as walking through The Home Depot, meeting with customers. Both Blank and Marcus are frequently found wearing the distinctive orange apron (competitors refer to The Home Depot as “agent orange”) and jeans as they visit stores throughout the southern, western, and northeastern United States.
Pivotal to the continued growth of the company is their “work in process” attitude that leads to continuous improvement. When Marcus discusses The Home Depot employees, he says, “We listen to them. We care about them. We do the things they say are right. And when they show how stupid we are in the systems we have, we change the systems.” No wonder the company is among “America’s Most Admired,” according to Fortune magazine’s 1994 ranking.