The following is a conversation between Arthur Blank, Co-Founder of Home Depot and Author of Good Company, and Denver Frederick, the Host of The Business of Giving.

Arthur Blank, Co-founder of The Home Depot and author of Good Company ©

Denver: There’s been a lot written about values-based businesses, but far less from those who have actually lived it, and not in just one setting but across a wide range of enterprises, with each producing the same exceptional results. One such person is Arthur Blank, Co-Founder of Home Depot, Owner of the Atlanta Falcons among other businesses, and author of a wonderful new book titled Good Company.

Welcome to The Business of Giving, Arthur! 

Arthur: Thank you, Denver. It’s great to be with you. And we’ve chatted for a brief minute before about all the shared backgrounds that we’ve had. So it’s an honor for me to have a chance to chat with you and with your listeners. Thank you so much.

Denver: Thank you, and me as well. Having core values guide decisions, we hear a lot about that now. But you started Home Depot back in 1978, so you and your co-founder Bernie Marcus saw the importance of that so much earlier than just about everybody else. How were you able to do that, Arthur? 

Arthur: Well, I think it probably had to do, I’d say in Bernie’s case as well as mine, is that our backgrounds were very similar. We came from families that came from Eastern European countries. They came through Ellis Island where you’ve been very much involved. They passed the Statue of Liberty where you were very much involved. And so they started out with very little in America, and both families, I think proved to be successful in terms of being able to create all necessities for a family. 

So in my case, I lived in Queens. We lived in an apartment until I was… When I was 31 years old, I finally bought my first home, and it cost a total of $31,000 that included…. that was not the mortgage, monthly mortgage. That was the price of the home. And I remember telling my wife at that time, I said, “Well, I’ll keep current on the payments, but I don’t know if we’ll be able to pay this thing off.” 

But, in any event, I think both myself and Bernie, our values, I think, were instilled by our parents who were very hardworking, came with nothing but a set of values in terms of having the tenacity to make this trip across ocean, to start life anew someplace else, and believed in the American dream.

And for them, it had some degree of success, not to the extent that, obviously, that Bernie or I have had, but I think a lot of these values were instilled by our parents… in my case, by my father who passed away at an early age. 

Denver: You were 15.

Arthur: Yes. He was 44 at the time. And I think that built in me a sense of urgency about getting on with life, making a difference; doing it sooner… don’t do it later; you don’t ever know how long you have to live. All of that. I didn’t think about it that way, but I think that was in my wiring at that point then. And my mother was always involved in community, always involved in anything where issues of equality and fairness and helping others… creating a real neighborhood, if you will. All of that was very important to us. 

So I think those values were instilled in the two of us at early ages, and we just carried that forward and reflected in how we treated our customers and how we treated our associates in Home Depot. 

Denver: When I read through your entire book, your mom’s words of “Do the right things for the right reasons, and live with the consequences” were present on every single page.

Arthur: Yes. Well, it’s true. And she would say that, and probably at that age, I didn’t fully understand all of what that meant, but today, I do understand it completely, and I try to live that way. I’m not perfect. There is nobody who is, but I do try to live that way. And with understanding, making the right decisions for the right reasons, and living with the consequences. The consequences, in terms of business, have been incredibly successful. All these businesses are. 

And then also, from a social standpoint, having a calling that’s beyond just the bottom line. It does include the bottom line because I do believe you want to have sustainability for a good business. You want to be able to make money and keep the business growing and rolling, and taking care of associates and people you’re serving. But also giving back to others and running your business in a way that’s not focused necessarily on every single decision, every moment, based on how it affects the bottom line, but rather how does it affect the human relationships — who you’re serving, your associates, communities that you’re living in, communities you’re operating in.  And I think that produces a win, not only for the financial bottom line, but for the soul and the purpose of the business as well, and for the associates who feel a special sense of pride in their connection, then.

 And so the only way we could do this…is that when we promote people, we promote first on the basis of: Do they understand the culture? Do they live the culture? Are they great examples of the culture? And then if they are, then we could consider them for promotions. But if they didn’t do that, we couldn’t consider them in any other opportunities. 

Denver: Absolutely. And what you were just talking about, there are those values. And as you know now, today, every company has their core values, and I think anyone you would talk to at those companies would say they’re very important. But I know, and you know that in certain cases, they’re on the wall or on a piece of paper or whatever, and they’re not being lived. So how do you keep values front and center and alive to guide decisions among your associates? 

Arthur: Denver, I think that’s a great question. Let’s go through our core values: put people first; listen and respond; include everybody; innovate on a continuous basis;  lead by example; and giving back to others. 

So I think if you focus on one for a second, let’s talk about: lead by example. So I think our associates, let’s say, at Home Depot, or Atlanta Falcons, or Atlanta United; or our PGA Tour Superstore, the largest golf retail in America today, or any of our businesses, ranches or otherwise, people watch what leadership does and the decision-making that they do, and what becomes the highest priority, and what’s the second priority, and the third priority, and then go down from there. 

So when you maintain a leadership group, a management group that believes in these core values, that’s promoted based on these core values and not because they’re the best at any one thing, but they have to fundamentally believe and be the ambassadors and be people that are willing to live these values and set that example… then other people in the organization, they see that and they understand that if they want to grow in the organization, they want to become an important player, want to have more of a bigger role, they’re going to have to adhere to and understand, and most important is to live these values.

So, you’re 100% right. There hasn’t been a company that I’ve been associated with, since getting out of college when I was 20 years old, that doesn’t have a set of values. There’s very few of them that have a set of values that are actually lived every day, by everybody. 

And I’ve got to tell you one quick story, which I don’t think is in the book. There was a book written by McKinsey. They did a study on six companies, and it was called The War for Talent. And it was run out of their Chicago office where their most senior partner from McKinsey in human resources was living. And I was the last person that he interviewed in our company, at Home Depot. And I remember coming in, and him saying to me, sitting down, he said, “I have to tell you something.” And he was in his 70s then. And he said, “I’ve done this my entire life, human resources and all this kind of stuff and connecting to associates.” He said, “We traveled all over, basically all of your stores. We went to Mexico. Went to the United States, all over the United States. Went to Canada. We even went down to South America.” At that point, we were running stores in Chile. 

He said, “You know, we spoke to a hundred of your associates– from cashiers, a lot of engineers, assistant managers, store managers, presidents,” he said, “every single one of them. And we asked them ‘tell us about this thing, what you call orange-blooded philosophy, these core values,’ every single one of them, every single person without exception, could describe them. Now the words were a little bit different, but the essence of all these six core values were described fully.” He said, “I don’t know how you could do that. I don’t know how you’re able to maintain that with a quarter of a million associates.” 

And it really goes back to an earlier story that when we went public in September of ’81, I had a visitor from Wall Street, Joe Ellis, who was the senior partner at Goldman Sachs at that time. And Joe said, “You know, your culture in these Atlanta stores is really unique, but you’re not going to be able to maintain it.” He didn’t ask me my opinion.

Denver: He just told you what was going to happen. 

Arthur: Yes. He just told me what was going to happen. And I was 37 years old, and this was like the King of Wall Street, and I said, “Oh, God.” So I went in to see my partner two weeks later, Bernie Marcus. I said, “Bernie, I had a visit. I had lunch with Joe Ellis and he follows the stock and all of this he said, but he was very assured that this culture that you and I both know is so critical, we could not maintain. And so the only way we could do this,” I said to him that time, “is that when we promote people, we promote first on the basis of: Do they understand the culture? Do they live the culture? Are they great examples of the culture? And then if they are, then we could consider them for promotions. But if they didn’t do that, we couldn’t consider them in any other opportunities.” 

Denver: Nothing else mattered.

Arthur: Nothing else mattered as much. So, therefore, the people that were promoted, it created the leadership group in our company, and all of our existing companies today are people that understand what our core values are.

Denver: I always found, Arthur, the great litmus test is to ask the middle managers… because if your middle managers can recite your core values, you’re onto something, but that’s the place where they usually can’t. Senior managers know it; people who just onboarded know it, but the middle managers don’t, and they’re really the key to getting things done. 

Arthur: You’re 100% right, Denver. And that is very rarely done. We didn’t have enough time to tell a million stories, but I remember after I retired — another quick one — a major competitor of ours at Home Depot was Lowe’s. I was invited as a guest to play golf at Augusta, and he was there that day as well as a guest. And he left me a notice that “if you’re here by such and such  time, I’m out on the putting green, come say Hi.” I walked out, said Hi to him and said, “How you doing?” I retired, he had retired, but we had known each other well over the years we were competing together. And he said, “Every year, we would travel,” and he said, “200-a-year stores we would go to. And we copied everything. We copied the size of the store, the product mix, the signing, the pricing. We copied everything.” He said, “The one thing we could never copy was your culture. We never understood. How could you maintain this culture? Every place you’re at, these people, they talk and they believe the same support culture that you’re describing now.”

 So, you’re 100% right. 

Denver: That’s a unique, distinct, competitive advantage that somebody can’t steal from you. 

Arthur: Exactly. Exactly. 

Denver: Well, I really saw your cultures and values on display when you went about building the Mercedes-Benz Stadium. Tell us a little bit about that process and how you reached out to the community before you went to work. 

Arthur: Well, the stadium is built in downtown Atlanta. We wanted it to be in downtown Atlanta. We didn’t tell everybody that at the time we were looking for a site because we were trying to make sure it was somewhat competitive. But most people knew that I wanted it to be in downtown Atlanta, as opposed to out in the middle of the suburbs someplace. 

But the position that I took at that time is that “We’re going to build the finest sports entertainment complex in the United States, if not any place in the world. It’ll be passed at some point, but right now, it was going to be at the very top of the heap.” I said, “However, we’re doing it adjacent to the west side of Atlanta. If you know Atlanta, that’s where Dr. King was born. That’s where Maynard Jackson was born. The history of the civil rights movement started there, and the scenario there, it had gone from 60,000, 70,000 people living in fairly nice, middle-class communities to one that was leading, in some ways, the whole East Coast in terms of crime and drugs and all kinds of bad activities. So I said: our commitment is to raise the west side as well. 

So we spent time walking around the streets on the west side, asking people living there, “Look, we’re building the stadium a quarter-mile away, half a mile away. How can we help the community? How can we be a participant to help  the community, to raise the bar for everybody to have opportunity, education, healthy ways to live, et cetera?” So they told us three or four things that they all wanted. We went to see them. We spent time with the clergyman in those areas as well. And basically, they said, “We don’t need a lot of buildings. We need to raise our capacity of the people who are living here.”

So, as an example, we started this workplace training program where we trained… at that point, there were about 7,000 people living there, down from 70,000. And we’ve trained over a thousand of those people living in these communities. They’ve gone out, and they brought back to their homes something close to $22 million of earned income. So that training in construction, and culinary, and nursing, and technology, all of that helped bring this community back to where crime rate is down by 45% of what it was two years ago.

Denver: Fantastic.

Arthur: Public education is up dramatically. Schooling is better. There’s a lot of other wonderful things going on there. So we took on that as a role. We’re going to have… on one end of the barbell this great stadium. The other end of the barbell, equally important, is going to be: How do we raise and restore the west side and create with other people, other partners and help them in doing that? So we were successful in doing that. 

It was by really trying to hear what they were saying and responding to it, and not being smarter than them. Have a sense of humility; have a sense of that they really know better than we do what they really want. We may think we know what they want, but they actually do know what they want. And if you give them what they want, they’re going to respond in a positive way.

Denver: Yes. The whole ecosystem. Business books are always talking about how you have to put the customer first. You have to be customer-centric. But you kind of alluded to it before…. you have always placed a special emphasis on the employees and the associates because I guess they’re the ones who serve the customer. And in your example, you actually sit in the back of the airplane with the players. You started doing that. Explain a little bit of that and the benefits that came from that. 

Arthur: Well, when I bought the team, it was the last game we played in the 2000 season, 2001 season. And so we came back from St. Louis where we had lost a game. And so, I entered the back of the plane and walked around and met with the players in small groups. And I said, “Look. I’m Arthur Blank. I’m your new owner. Our deal has been announced. We’ll be closing February, et cetera. But tell me… you don’t want me — I played high school ball — but you don’t want me on the field. You don’t want me in a uniform. You don’t want me calling plays, but tell me how I can help. Tell me what I can do to help you, help us, and put you in a better position to win.” They said, “Just fill up the stadium.” They said, “Right now, our stadium is… 40% of it is empty!” And that was true. “Of the 60% that were there, half were rooting for the visiting team. Rooting for them.” 

Denver: A lot of transplants in Atlanta, so that could have been the case. Sure. 

Arthur: We had no home-field advantage.” So what we did is we went out and we spent some time in the communities, again, listening and responding, listening to the fans that would not come into the stadium, asking them: Why are you not coming? Why don’t you come? And it wasn’t a list of 600 things. There were about six things that they said were really important. One was pricing. And at that point, they felt the pricing was just too high for the product that was on the field, et cetera.

 So, we decided as an organization — a gentleman, Dick Sullivan, who runs our PGA Superstore business today, was my partner at that time — and we decided we’re going to reduce the pricing on 20,000 seats in the building to $10 a ticket or $100 for a season ticket. I called Commissioner Tagliabue at that time and I said, “Paul, I know we don’t have to get approval on this, but I want to at least get your wisdom, your consultation, et cetera.” So I told him what we were going to do, and it was like for 10 seconds, there was stone silence. You don’t think… 10 seconds is a longer time than you think it is.

Denver: Oh, I’ve been there before.

Arthur: For 10 seconds, there was nothing. Finally, Paul said, “Well, I can tell you this. I’ll tell you a couple of things.” He said, “One, you have the right to do it. It’s your franchise. We don’t control pricing. It’s your decision. Number two, you’re going to get a lot of owners really pissed at you because a lot of owners have empty seats in the stadium, but they maintain their pricing. They’re not as concerned as you are.” 

And he didn’t tell me the third, but the third, which turned out to be true is that we sold 20,000 seats in two hours. We sold them all out within two hours. And we sold out the stadium for… actually since 2002, sold out all of our games all the way through. Michael Vick broke his leg in 2007. We had three games that we didn’t sell out. But so, it’s a way to think about:  How do we take care of the people that are providing us the basis for this business? 

Denver: Yes, absolutely. 

Arthur: It was by really trying to hear what they were saying and responding to it, and not being smarter than them. Have a sense of humility; have a sense of that they really know better than we do what they really want. We may think we know what they want, but they actually do know what they want. And if you give them what they want, they’re going to respond in a positive way. 

…in all of our businesses, I always want to walk the talk with our associates… I always want the associates to feel like I’m right there with them. I’m right alongside them. I’m not hidden someplace in a suite or a box or someplace where I’m not exposed to where the realities of the business are being played out. 

Denver: You’re right. A lot of other owners would have just built them a new complex thinking that’s what they wanted. What they wanted were some fannies in the seats, which you made a little bit bigger, by the way, too. And the way you lead that team, I’ve always admired, Arthur, how you walk alongside them. And I see that because you’re on the field in the fourth quarter. You’re not up in the big seats in the suites. You’re down there with them. That’s an important message, isn’t it? 

Arthur: It is because in all of our businesses, I always want to walk the talk with our associates who are in our players, in our PGA stores, or in our guest ranches where I’m actively involved, et cetera. I always want the associates to feel like I’m right there with them. I’m right alongside them. I’m not hidden someplace in a suite or a box or someplace where I’m not exposed to where the realities of the business are being played out. 

In this case, I’ve made it a practice for 20 years, in the middle of fourth quarter, win, lose, or whatever, I go down to the field. I stay between the goal line and the 35-yard line, which is where no players are permitted to be or coaches during that time of the game. So I stay there myself. I don’t get in the middle of anything, but they know that I’m there for them. They know that I’m down there, I’m with them, whatever it goes, going on, I’m there shoulder to shoulder with them, and that’s important to them for them to know that.

Denver: I’ve observed it from my perch up here and I’ve always tipped my hat to you.

You were not only an early adopter of value-based leadership, but you were among the first to sign the Giving Pledge, and you’re doing that through the Arthur M. Blank Family Foundation. And you’re looking to leverage the power of connected philanthropy. Tell us a little bit about that and connected philanthropy. 

Arthur: Thank you, Denver, for the question. In order to join the Giving Pledge, you have to commit that at least 50% of your estate… It’s going to be given to a philanthropy either during your lifetime or afterward. In my case, I’ve publicly pledged… 95% of it’s going to be given back to society through the family foundation. Our children have foundations as well, et cetera. So I’ve made that clear. And that’s important, by the way, to our associates because they know, in all the businesses we operate today, they know that 95 cents on a dollar of what they’re making is going to go back to society in one form or another. So that makes them feel good about their efforts and the production of their efforts. 

And we try to connect that notion of philanthropy and giving back in all of our businesses. I think I said this earlier, too. We have associate-driven funds in all of our businesses, probably close to $15 million this year were just our hourly associates — the Falcons or the soccer team or our guest ranches or PGA stores. We just made a grant to First Tee the largest grant they’ve ever had to receive in their history that will be put through our stores throughout America, et cetera. 

But those grants are made by the associates, the hourly associates, working in a committee with certain guidelines. They do the site visits. They do the grantmaking. They do the post evaluations. They do all of that work, and that gives them a tremendous sense of pride. Not only in what the family foundation is doing with our gift for the Stuttering Program out of University of Texas now, which we’ll make nationwide, or we just granted the $200 million to build a children’s hospital here in Atlanta. They take great pride in those things, but these are the ones that they’re personally involved, coming up with the ideas and helping evaluate, and actually following them. 

…the stuttering itself should never define who we are. And that doesn’t define the quality of our thinking, the quality of our spirit, the quality of our thoughts… And that whether you stutter or not is not material in terms of the quality of your brain, the quality of what you want to say, the quality of the ideas that you want to bring forth…

Denver: Let’s talk a little bit about that grant you made to the Moody College of Communication at the University of Texas, where they’re going to establish the Arthur M. Blank Center for Stuttering Education and Research. And as you and I had discussed earlier, we crossed paths in 2011 with the American Institute for Stuttering, when you were the Honoree there. 

And a year or two before you were honored, then-Vice President, Joe Biden was honored. And I remember him saying, Arthur, that he felt that his greatest achievement in life was overcoming his stutter because it opened the gates to everything else he was able to do after that. It gave him the belief and the self-confidence to do it. What was the impact that stuttering had on you in informing your career and your leadership? 

Arthur: Well, I think as a young man, I remember the experience we shared earlier about in college when I would raise my hand and the kids would shake, “Oh boy, here it goes. What should be a two-minute answer, it’s going to be a five-minute answer.” And I was in the first row, raising my hand, asking questions, et cetera. And I didn’t eliminate my stutter, but I kept pushing through that and understanding more fully that stuttering really was not going to define me. As a result, I became the senior class president of student government. I was active in a whole variety of ways in college– Babson College, in Wellesley, Massachusetts.

So what’s interesting about the program at the University of Texas, that one has been produced by Dr. Byrd, and it’s been highly successful, is that it has a different twist, Denver, than most stuttering programs do. Most stuttering programs in any form or fashion across the nation or throughout the world really are based on that fluency really is going to help define you, that you being fluent is going to define who you are. So it’s dependent on you getting over the stutter.

Her approach, which based on all the research, she’s probably the leading researcher today in the country on the subject, and one of the leading in terms of education, is that a lot of times, the fluency issue can be overcome over time with maybe techniques, maybe just age, et cetera, but the stuttering itself should never define who we are. And that doesn’t define the quality of our thinking, the quality of our spirit, the quality of our thoughts, et cetera. And that whether you stutter or not is not material in terms of the quality of your brain, the quality of what you want to say, the quality of the ideas that you want to bring forth, et cetera.

So her whole approach is that it’s a very holistic approach to the whole psychology of that: You don’t let stuttering define you; fluency doesn’t define you. It’s not a disability. It just happens to be something that you have wired into your system. It’s a  neurological issue that’s often passed on genetically, and that you can’t be defined by it.

And so I’ve spent time with our students, and it’s amazing. A lot of them still stutter; a lot of them don’t stutter. A lot of them still stutter;  most still stutter, but they’re smiling. They’re happy. They’re forthright. They stand up in front of 300 people and talk and do it with a smile on their face. It’s like they’re freeing up their minds and their bodies and their soul to speak in ways that ordinarily they would not do that because they would feel, “Well. I stutter. Nobody wants to listen. They’re not going to have patience with me. They’re going to think I’m not so smart, et cetera.” So I think hard work is…

Denver: I love it.

Arthur: It’s wonderful. It’s beautiful because it’s like… my mother used to always say to me and Jack Welch, who was a good friend of mine. He’s passed away, rest in peace. But Jack would say, or I would say, and my mother would tell me, “What you have to say is important. People will listen to you; take your time. Get it out. Whatever it may be, say it. Don’t keep it to yourself.” And I follow that throughout my life, and Jack did as well. Jack’s attitude was that, “You know what? I got important things to say. When GE was really a real company, major company in the world. Jack would… his attitude was that “You know, what I have to say is important, and people are going to listen to it.”

So our plan is to create these centers similar to what she has done in Austin, Texas, all over the United States. And she’s done work internationally… she wants to do it internationally as well. So I’m a huge fan.

Denver: It sounds great. Two other things about Jack, I remember. I remember him saying that his mother told him that his brain worked too fast for his mouth.

Arthur: That’s right.

Denver: And the other thing he said was that he was at Boston College, and he loved tuna fish and he would try to order tuna fish, but he would say “tu-tuna fish” and he would always get two tuna fish sandwiches, that would be served up. 

Finally, Arthur, proceeds from the sale of this book are going to support the National Center for Civil and Human Rights, which is based in Atlanta. Tell us about them and why you really felt they were the right beneficiary for the proceeds of the book. 

Arthur: I think the Center, if you have a chance to visit at some point, Denver, or any of your listeners, they would find it so emotionally moving because it really reflects on not just civil rights, but human rights really throughout the world and over history over time, and it does it in a very beautiful way. 

And it’s so important that it be in Atlanta, in my opinion. Andy Young, who is a disciple of Dr. King’s and is still with us…John Lewis, who’s gone this year, was a very close supporter of it as well. But it’s a unique place in that it tells a story and a history and really asks the big questions about: How do we make this not happen again? How do we avoid this in the future? Well, what can you do, and what can we do?

So, when we were honored to have the Super Bowl in Atlanta in 2017, we used that facility as a place to host the owners’ dinner. It’s amazing. I will tell you to this day, I have some of the oldest owners — the McCaskey family, the Mara family, Jerry Jones and his family — folks who’ve been around… they’ve told me it was the finest owners’ dinner that they’ve ever attended in the history of the NFL.

We had John Legend who was a spokesperson that night, performed that night. Dr. King’s children, all there that night. I had… on one side of me was Andy Young and the other side of me was John Lewis. It was a beautiful —

Denver: You were in good company.

Arthur: Yes. I was in good company. Amen. I was in good company. 

Denver: Fantastic. Well, the name of the book is Good Company, and the lessons and advice therein are really transferable and applicable to just about every company and organization. So do yourself a favor and pick it up. Thanks, Arthur. It was such a pleasure and honor to have you on the program. 

Arthur: Thank you. Denver, it was my pleasure, and any more of this good work that you’re doing, please keep me in mind. It’s beautiful work that you’ve done here historically, and I’m sure you’re doing currently. So thank you very much.

Denver: Thank you very much.

Arthur: Be well. Thank you.

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