Thirty Minute Mentors Podcast Transcript: Former Home Depot CEO Frank Blake

I recently interviewed Frank Blake on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:

Adam: Our guest today was the leader of the largest home improvement retailer in America and one of the largest companies in the world. Frank Blake was the CEO of Home Depot where he led the turnaround of the customer experience, the employee experience, and not in-coincidentally, Home Depot stock price. Frank, thank you for joining us.

Frank: Adam, it's a pleasure.

Adam: Pleasures mine. You spent eight years as a Fortune 50 CEO, but growing up in Boston, through your time in college and law school, to the early stages of your career, your sights were set far from corporate America. But from an early age, you enjoyed great success. Academically you attended Harvard and Columbia Law School, success professionally you clerked for the great Supreme Court Justice John Paul Stevens, can you take listeners back to your early days? What were the key experiences and lessons that shaped your worldview and shaped the trajectory of your success?

Frank: Well, first, Adam, again, pleasure to be on the show. And I don't know about how my earlier days shaped my worldview. But I started as you indicated professionally as a lawyer. I was a lawyer for many years. I was in Washington, D.C. I had a very traditional kind of Washington, D.C. legal practice in a law firm, actually a law firm, that I and a few colleagues started. Then in government, I worked for George Bush and President Reagan and ultimately ended up working for George Bush's son and left D.C. to work at GE, as a lawyer at GE, and I was the great beneficiary. I tell people about the HR process of GE because GE would rotate business leaders. I happened to be in Schenectady, New York. I was in business doing a large power turbine that was based in Schenectady, New York, the original manufacturing facility for Thomas Alva Edison. And it was a huge change from a career perspective. But I moved into the business side because while GE would rotate business leaders through places like Schenectady on a regular 18-month basis, you know, they never bothered to rotate the lawyers. And after about five years, I actually understood the business pretty well. And I got to your around the table and you start making comments that are relevant on the business side. Eventually, I got a chance on the business side. And that gave me the opportunity that ultimately led to Home Depot. But the worldview question, which is interesting, in shaping my worldview, I developed many perspectives on large organizations, having worked in the government and working with GE. And also having started a business and then growing into a fairly large size, about some of the difficulties inherently in large businesses and how large businesses often lose sight of the ultimate customer and lose sight of really doing what's best for their employees. So that was the shaping vision. That's where it came from.

Adam: That's going to be a big part of our conversation. Today, we're going to talk a lot about the customer experience and how to build a customer-centric organization. But before we do, I want to ask you about the skills you developed as you arise within your career. What were the most important skills that enabled you to become the leader of a multibillion-dollar business? And what were the skills that were most valuable in your capacity as the leader of Home Depot?

Frank: Another great question. I don't know if it's a skill or a mindset. I think it helps to have a mindset that is endlessly curious. So I'm really curious about things. I think it helps to have a mindset that recognizes you have to reach out to others for our answers and to grow your understanding. And listen. You have to listen and be respectful and be curious about what's going on.

Adam: Great leaders are great listeners. I believe that listeners of this podcast have heard me say that ad nauseum.

Frank: Well, I couldn't agree with you more.

Adam: What do you believe are the key characteristics to be a great leader and what can anyone do to become a better leader?

Frank: I believe just as you said, I think listening is critical. I think having some edge, having a point of view that's different from others, and having your own personal commitment around that point of view is important. But I'll give you an answer to that. Really interesting. I worked for Jack Welch for quite a while and attracted a lot of different commentary. I happen to think these are great business leaders of our time. And when I became CEO of Home Depot, I gave him a call. I said, “Jack, I need some CEO one-on-one training”. And he's very gracious about that. For one day a year for eight years, I would fly down to his house in Florida, and he'd spend a day with me and just answer questions like you're asking. And on the last year, when I knew I wouldn't have the opportunity again, and I also knew I wouldn't be embarrassed by asking the question, I asked, “All right, Jack, if you had to boil it down, what is the single most important characteristic?”. And that's the sort of question that if you knew Jack, you'd be a little bit reluctant to ask as he might rip your head off. So I got my courage up. And I asked him the question and his answer was shocking. His answer was: generosity. A leader has to be generous. And I think I scrunched up my face in some element of surprise, that was an answer I sort of I wasn't expecting. And so I said, “Can you explain that?”. He said, “Every great leader is fueled by the success of the people around them. Every great leader draws his or her energy by seeing the people around them become more successful”. And while I hadn't completely understood that working for Jack, he was a very demanding boss, a very difficult boss. I could see in retrospect, rewinding the tape, that yeah, he, in his own way, was investing into me and wanted me to succeed. And I believe that the first question as a leader you need to ask yourself is whether the people in your organization believe that you have their best interests at heart and that you want them to succeed. And if they see that you're investing into their success, they'll invest into your success. And it's not a hell of a lot more complicated than that. So I thought that was a really profound answer. And I probably wouldn't have come to that on my own. But now, I think there's a great truth.

Adam: There's so much to unpack there. And we could spend the entire episode just talking about this. 

Frank: Yeah, absolutely. 

Adam: Right? Starting off right off the bat, great Leaders ask great questions. Great leaders are inquisitive. And Frank, listeners, hopefully, observe this about you. You took the initiative to reach out every year. Now, not everyone has access to one of the great leaders of our day. But you, year in and year out, asked the best questions that you could and weren't afraid to ask questions. And more importantly, ask great questions. Great leaders are lifelong learners. Great leaders have the humility to know that no matter how much success they've achieved, no matter how much they know, they don't know everything. They know what they don't know. And they continually want to learn, continually want to grow, continually want to know more. Great leaders love people, great leaders, to your point and to Jack Welch's point, have the best interest of others at heart. The question that I have for you is, how do great leaders show that they have the best interest of others at heart? How do great leaders build trust within their organization?

Frank: Yeah, so first, I think it does start with you actually having to have their best interests at heart. So you have to want their success. You have to be open to their input. All of those things sound simple, but they aren't. I thought one of the elements of Jack that was pure genius, was that. And mind you again, I started out as a lawyer in a company that is dominated by engineers and finance. And that's not the path to obvious success in that company. But as just a junior person in the business I internalized, I believed that the path to success was to disagree with the chairman of the company and be right, and to have the confidence of my position that I would stick to it. Now, I also knew that if I disagreed and I was wrong, that might be seriously career limiting. But I knew that that was what the company did. I can't tell you how hard that is. I can't tell you how hard that is within an organization. And how many leaders in lots of subtle and sometimes direct ways really indicate that they don't want a full discussion. They don't want what someone can bring to the table, they just want them to go do what they told them to do. Ultimately, you get to a point in a decision process where you do just want to say decisions made you go do it. But that input and encouraging real feedback is hugely important. I just give another anecdote because I've had the privilege of working with some amazing leaders and their little soundbite sticking in my head. Bernie Marcus, who founded Home Depot, at one point early on, we were sitting down, and Bernie said, “You know, let me tell you something about your new job boom”, as I became CEO, who said, “You're gonna sit down at a table, and you're gonna tell a joke, and everyone's gonna laugh. And just remember, you're not funny.” And that is another thing, that you can unpack the wisdom from that forever and ever because that's what happens to leaders is they start to think, rather than investing in other people's success, and drawing out their knowledge, that basically, they figured it out. They're just telling everybody what to do. And you just have to be aware that when those heads are nodding, when everybody's laughing at your jokes, and when everybody's saying how right you are, then it's true. It isn't true. You don't get there on your own. You get there by building up other people and making them successful.

Adam: That quote really says it all: the importance of going out and seeking contrarian opinions, the importance of not getting too caught up in your own success.

Frank: Yeah, Jack's comment all the time was, I can pay someone at the time, I can pay someone $10 an hour to sit around the table and always group. That's not a lot of value. And you're here because I want to get your point of view. There are lots of different ways of showing people that you invest in them, give them opportunities. So the company gives them opportunities to develop and take courses and compensation and all that stuff. But at the core, the way you invest in someone's success is to give them an opportunity to express themselves. And so that's how you really invest in something.

Adam: I love that. And I want to dive deeper into that topic because a key reason why you ultimately became the CEO of Home Depot was the company was struggling with poor customer service. And when you took over, you went on a mission to transform the customer experience, which was also tied to transforming the employee experience. How did you do it? And how can leaders build winning organizational cultures and customer-centric organizations?

Frank: I feel like I learned one really important thing in my time at Home Depot, I hopefully learn more than one. But there's one that if your listeners take everything else that I say for a grain of salt, this is actually really important. I always tell people in an organization that they have a mistaken notion that the words of the boss go like gravity down to the organization, and that there's going to cascade this message down. And my comment to leaders of any stripe is, gravity is never your friend. Gravity is always your enemy. You're pushing a point of view and a perspective up through an organization, not down. And I would joke that you do a lot of store walks in retail. And if I'm walking in the store, and I talked to a store manager, I say how's everything going? There's only one right answer to that question when the boss asks you, how's everything going? And the right answer is, everything's going great, you're wonderful, please leave. The organization is not there to take your thoughts and amplify. So you have to figure out another way to do it. And the other way to do it as you do it through your power of recognition and celebration. You, as the leader in whatever organization you are in and leading, you set what that organization is about by the people you literally or figuratively take up onto the stage. And the people that when you take them up on the stage you tell everybody else here's the amazing thing that this person or this team did. Here's why there are funds when you recognize and celebrate people, and you do it consistently and intentionally. And if you do it consistently and intentionally enough, the organization starts swinging around. Because first off, you have people in the audience who go, gosh, I can't believe that he or she got pulled up on the audience to get recognized like that. I do that kind of stuff every day. They need to understand that I do that kind of stuff every day. And so the organization starts looking for that, they start looking for those examples that are what the leader is asking for. And as they look for it, they do it more as you celebrate it, people are more comfortable doing it. They understand the story behind it. And the stories are really critical. You need to explain to people, your organization, why do we give this promotion to Joe or Janice when they get the promotion? So many companies, you get that promotion announcement, the announcement on the promotion just says oh, you know, they spent a year in Pepsi, and then two years in Seattle, and three years in Singapore, and we liked them a lot. Now they're an officer versus saying, here's what they did. Here's what distinguishes them. And if you want to know how to get ahead in the organization, here's what. So in the example of customer service, customer service is such a bland general construct. What does it mean? You take all of the examples of great customer service and you make a conscious effort to always be expressing those and thanking them, and celebrating them. And airing those out than the rest of the organization. We had lots of different ways of doing it. You can come up with lots of different ways of doing it. But it's the single most important thing to do.

Adam: I actually recently did an interview with the CEO of Overstock. And one of the things he shared right along these lines is the power of positive reinforcement. And all too often, we look at things and try to find areas of improvement. What can this person do better? How can we as leaders find ways to try to help our teams get to the next level? And that's great. But what if instead, we focus on all the things that people are doing well, and use that to your point, as an example, to allow everyone on the team to look at that person and say, that's great, this is amazing. I want to be like that. And it's really all about building a culture of positivity, highlighting the things that are going well. And one of the things that you did that was a hallmark of your leadership at Home Depot when someone did a good job, you would write a letter to that employee, acknowledging them. The notion of celebrating the people around you in a personalized way. The notion of patting someone on the back can be so powerful.

Frank: Yeah, I'm a big believer in the power of handwritten notes. I learned that from working for George Bush, that, who that's what he did, he wrote a ton of handwritten notes. I also, as you said, Adam, it's anything you do that says, you all know what we value. Here's an example of it. And you're special because of it. David Novak is, I think, just one of the great retail leaders of all time. He ran yum brands, you know, KFC and Taco Bell and all the rest. He had a great habit. I learned from him that I then did a Depot, that was fantastic. When he would do a store walk, everybody takes selfies and stuff. And that was a big deal. People like their photos. Whenever I'd go into a store walk, I'd say to the store manager who are the two or three best associates, and everybody would gather around and explain to me why these people are so great. Here's what they do for customer service. I took their photo and I said, I'm putting it on my office wall. Anytime you come into Atlanta and you want to see your photo on the wall, my office, you walk in. And in some of the most moving times, I had people would literally come with their family to show their photos on the wall of the CSR. And there are lots of things like that to do, where you show both that you're paying attention that people matter. And, again, hopefully being consistent and intentional about what you're recognizing and celebrating.

Adam: A big takeaway from me listening to your advice is that it's so important to learn from others who have done it. Well, you've given some great examples from great leaders, you've been around. At the same time, it only works if you genuinely care if you really want to do it. And if this is at the core of who you are about,

Frank: Yeah, I agree with that. I agree. That's the best part of this. Absolutely the best part of businesses. I tell people when they get old like I am, and they're retired, but the fun part will be the folks whose careers they've made or the impacts that they've had on their lives. I mean, you're gonna last since you've forgotten what your EBITDA was for whatever year, and what your operating margin was, you'll remember the people and you'll remember the impact. And they'll remember you and the impact you add.

Adam: Along those lines, you took over as CEO of Home Depot in January of 2007. Less than two years into your tenure, the U.S. economy is on the brink of falling apart. At the time, Home Depot had more than 300,000 employees, that number is now almost half a million. And you're leading them. What are the best lessons that you learned from leading during that time of crisis? And what are your best tips for anyone listening on how to lead successfully during times of crisis, uncertainty, and change?

Frank: Yeah, and sadly, as you say, I took over in 2007, January 2007. And the housing market was already collapsing in January 2007. The Great Recession followed later, but we were in trouble almost from day one. And the lessons are you do have to keep your eye firmly fixed on the customer, and making sure you're doing the right thing by the customer. And then making sure you're doing the right thing by your employees. I had a great board of directors and they allowed us to invest in our employees, even in the most difficult of economic times. And I like saying that great crises don't build character, they reveal character, and they reveal the character of an organization. And so it's a question of focusing more thoroughly and being confident that what you're doing is the right thing for the customer and the right thing for your employees.

Adam: What was your daily routine as a Fortune 50 CEO? And in your experience, what are the keys to optimizing your time, optimizing your energy, optimizing your focus?

Frank: So my routine buried a lot because I tried to be on the road a fair amount. And so I would visit stores. I had as an objective, to visit all 2200 some odd Home Depot stores. I didn't get there, I got to a little less than 1700. But that's a lot of stories to visit. But the hardest thing, the most important thing, and I think this applies to leadership at all levels, is as much control as possible over your account that by and large, the real value you add, as a leader, is bringing in a different vantage point. So if everybody knows that something's right, the odds are it's not right. Odds are the things that are going to make the difference, the vectors of change are going to come by analogy to some of your business or are going to be seen by somewhere else in the organization other than the C suite. So you have to protect your calendar and give you the time to go around and talk to the people on the floor of the store, in our case or your customer. I have another great Bernie comment that I think is very true, which is again, early on, he said, “You know, you have a prominent job because you get to call and talk to investors and speak to things or beyond and podcasts, but you don't have a significant job. The only significant jobs are the jobs for people who are helping customers”. And as long as you remember that, you have to make sure it's so easy for your routine, to get inwardly focused to care more about what happens inside the company than outside the company. He's just got to remember that great companies are great because they solve some customers’ needs better than anybody else. And you got to keep doing it. Great companies aren't great because they saw their own.

Adam: What a powerful perspective. What was the most difficult decision that you had to make as a leader? And what did you learn from it?

Frank: So early on, again, as you said, we went through the Great Recession. The most difficult decisions were shutting stores, we shut some stores down, we shot some businesses. Those are always tough decisions. They should be tough decisions, you're impacting people's livelihood. You try to do it as fairly as you can. But those are hard decisions. And what you learn from it is, I don't know that there's a lot you learn from it other than to try not to have to do it again and try to run the business well enough. So you never have to do that. I'm a believer that executives shouldn't be getting a lot of bonuses for laying people off. That our job is to avoid doing that.

Adam: If nothing else, it very much humanizes the decision-making process. It humanizes your experience as a leader.

Frank: Yeah, you still have to do it. But the collective entity, yeah, exactly right. You have to humanize, you have to understand the human dimension of your decisions. And those are difficult.

Adam: You've mentioned Bernie Marcus and his advice a few times over the course of this conversation, you mentioned a few other bosses of yours. So far, I want to throw some names at you, including some of the names you've mentioned. And see if you could share the single best lesson you've learned from each of them. And I'm going to start off with a boss who you mentioned, former president of the United States, George Herbert Walker Bush.

Frank: So I'm a huge fan of the President. I learned so much about how you interact with people. I believe that Desert Storm was a success because of the way he maintained a network of connections around the world and was careful in his decision-making. He epitomized. for me, someone who was very much focused on what was good for the country and caring about everyone.

Adam: Interestingly enough, I did an interview with his daughter, who I'm sure you know, a great nonprofit leader. And I asked her, “What did you learn from your dad on the topic of leadership?”. And what she shared was how important it is to be kind as a leader. Yeah, the importance of the human side of leadership, and just being good to other people.

Frank: She's entirely right. I can tell you having worked for him as a staff person, he would start every day. So you get to observe what a leader does. And he started every day, spending an hour sending out notes. And he did it actually, not handwritten as our little typewriter. But this was 1981. So we didn't have emails and stuff. But as a staff member, when you got to know from the vice president that said, You did X, Y, or Z, thank you, or just commenting on something, what a difference it made. Or you walk through the wall for the man. I mean, really, and it's both kindness but also investing. It's that sense of someone investing really notable and an enormous difference is a great man.

Adam: What are the single best lessons you learned from the founders of Home Depot, Bernie Marcus and Arthur Blank? 

Frank: I learned a lot from Bernie, from Arthur, from Ken Langone. And we haven't mentioned Ken, he was my lead director and just an absolute. Any of the success that you began with would not have happened. But for Ken, I think the great thing about Home Depot that was instilled in the company, by all of its founders by Bernie Arthur and him, was that really the attitude of we are here to provide great customer service, and we are here to invest in our employees. And the very big saying at Depot was take care of your customers, take care of your employees, and everything else takes care of itself. And that was how the company really thought and operated.

Adam: And that's universally applicable no matter what company you're running, doesn't need to be Home Depot, doesn't need to be a Fortune 500 business, doesn't need to be a retailer, any business you're in, take that to the bank.

Frank: Anything you do, you take care of your customers, you take care of your people, pretty much you can be confident things will be taken care of as true.

Adam: Frank, what can anyone listening to this conversation do to become more successful personally and professionally?

Frank: Here's what I think everybody ought to do regardless, whether it makes them more successful, and hopefully it will make them more successful along the way, is take the time and say thanks, express gratitude. It's helpful to yourself, and it's helpful to just take the time to say thanks.

Adam: Frank, thank you for all the great advice. Thank you for being a part of Thirty Minute Mentors.

Frank: Absolutely. That was a blast. Thank you.

Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.

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