since its founding in 1967 fast andol has grown from a small Fastener store in Winona Minnesota into a multi-billion dollar Global organization the company's known for its exceptional leadership Innovation and success fenol was the top performing stock in America during the quarter Century that began with the market crash of 1987 how did a small town nuts and bolts shop become one of the world's most dynamic growth companies when never
asked company founder Bob kierin a attributes fascal success to the company's high quality employees and their commitment to a common goal this is something he's going to repeat that is his main idea the one he repeats most throughout the entire book that your company should be organized and oriented around a commitment to a common goal and this is their common goal growth through customer service so whenever ask company
founder Bob kin attributes fascal success to the company's high quality employees and their commitment to a common goal growth through customer service the company is organized in order to serve those four words growth through customer service underlying that simple answer is an unshakable belief in people that ordinary individuals can accomplish extraordinary things if given the opportunity in 1997 kierin published
this book in an effort to share the unconventional business practices that stem from this philosophy and fuel fal's success the ideas presented Within These Pages flew in the face of the prevailing business wisdom at the time and they
remain every bit as relevant and challenging today the original idea was to provide a teaching tool for future generations of Fastenal leaders but to anyone with the courage to unleash the vast human potential within your
business organization team or group welcome that is an excerpt from the back cover of the book I'm going to talk to about today which is the power of fascin all people and is written by the founder of fast andol Robert kierin so the way I would describe this book is it's a cult classic it's hard to find and it's about a compounding machine I'm going to read from the acknowledgements preface and introduction all of which are very short
what I love about Robert is he gets right to the point and then I'm going to put the book down briefly and give you an overview of this very unique company so I want to give you a little background first on Bob kierin he was the founder he's still alive he's the he founded fol in 1967 and served as the co-founder and CEO for 35 years so fasten is going to grow from 1 1,000 squ foot location in 1967 to over 3,400
stores by 2023 they are doing like 7.5 billion dollar a year in sales and their market cap is almost $40 billion before founding the company Bob got a degree in mechanical engineering and then also an MBA and so in the acknowledgement section he tells us exactly what why he's writing the book and what what this is all about the content of this book derives from what people have taught me sometimes in classes but more often
through their example my parents were my first teachers those that followed in grade school high school and college added to my knowledge I was privileged to observe good leaders in my early business career perhaps I was also
privileged to observe some bad ones too I learned from them all and the need to write this book deres out of these two sentences I am aware that fenol is a unique organization fenol succeeds because its people succeed and so it's
very obvious as you start to read this book there's a lot of buffet and mesque things in it and that popped out of me from the very first page because he's he's going through all the people he had to thing to write the book but then he says something like this no need to than any typist however every little character was entered by one of my fingers into a computer at home one of Charlie Munger and Warren Buffett's
favorite Founders is this guy Les Schwab who I've done two episodes on Les Schwab writes this incredible autobiography which again is short and to the point and Les starts that book with this sentence I did write this 100% with my
40-year-old typewriter I did not have a ghost writer I wanted it in my own words and so there's going to be a lot of things that Bob believes in and the traits that he has is he's going to share in common with a lot of buffet
Ander favorite Founders he talks about the fact that hey you know this is the updated version so he's like I wrote this book 20 years ago since then our sales have actually grown by a factor of 12 and I think it's even higher now but he says it all comes from this basic belief that has provided the fuel for this growth and it's Bob's heartfelt belief in people and their ability to do great things have given the opportunity
now now think about how crazy this is so he first wrote this in 1997 this updated version is printed 23 years later so think about all the technological change that has occurred in that that 23-year period although the applications of new
technology such as the internet smartphones barcodes vending and automated stocking have changed the how of industrial distribution which is their business okay it's changed the technology changed the how they have not
changed the why of a distributor's success success still stems from the ingenuity risk-taking hard work of people working together as a team and he goes back to his really he has one idea is the way I would say this we continue to pursue our common goal and we continue to find ways to bring out and use the potential of our people I'm not sure why but when I got to that sentence or that paragraph rather where he's
talking about listen the technolog is going to change technology that influences your business may change the how of how you deliver your service but it will not change the why Michael Bloomberg in his autobiography said something that's very interesting he says a lot of companies mistake their product for the device that delivers it listen to this this is from Bloomberg's autobiography the technology that we pioneered in the early 1980s has long
since been ancient history but we never made the error that so many others have mistaking their product for the device that delivers it Kodak thought that they were in the camera and film business instead of the photography business the digital photography Revolution passed them by and after more than a century as one of the most Innovative companies in the world they filed for bankruptcy at Bloomberg we got out of the business of
building physical computers as soon as PCS began taking off we knew our core product was data and analytics not Hardware do not make the mistake of confusing your product for the device that delivers it and then he ends the preface with repeating this main idea the first requirement to have a successful organization the need to have every member of the organization pursuing a common goal he already said what his common goal on the very back
cover growth through customer service and then he continues about the fact that he was a reluctant author that he had to be pushed to write this book and the reason he did I love he says I became more aware that PE that the
people principles we practice at fenol are uncommon and they're in need of defense this book has only one purpose to support ideas that don't seem either common or accepted these ideas come from my experiences in life and are offered
to younger people with the hope that by understanding them here they can avoid needing years to learn from their own experience these examples come mostly from my 47 years with the Fastenal Company so this is what I love about autobiographies you know he has almost half a century of experience it's almost like having a to to read this book or to listen to the podcast it's almost like having a one-sided conversation with
somebody has 50 years of entrepreneurial experience fasol is a people centered company fasol has no unique product and no unique process but it has some ideas about people that are at least uncommon if not unique so I want to put the book down briefly remember the what is the title of the book The Power of people the power of fast and all people so I going to give you this company overview and a story about the CEO that succeeded
kierin and Warren Buffett that I think just knowing all this at the very beginning I think we'll make the ideas that he repeats over and over again that Bob repeats over and over again in the book very important what's the most important part of Fastenal success that Outsiders discovering the company for the first time don't understand the number one thing is the people aspect the goal is to unleash entrepreneurial
passion a commitment that I will be self-driven to do better than what you can expect it is a mindset this is what they're telling their employees run your business like you own it when you trust people to solve problems and make decisions you let them go and you let them go that's where magic happens that is the story of this company fenol Embraces a spirit of radical decentralization and autonomy each of its 2700 stores operates as a standalone
business with a clear leader and full p&l responsibility we grow from the ground up based on the actions and decisions of thousands of people who run their businesses like they own it I want those people to stay with us forever they will never have to stop at a certain level you may have to move you may have to learn a new market category but there will always be opportunities here we call ourselves a blue collar sales
company when our folks in the stores are doing it right customers say this guy knows my business better than I do we don't care when we went to school we care what they can't teach in school wisdom Savvy entrepreneurial Spirit we want to know our customers businesses so well what they spend how they could be more efficient that they can't imagine doing business with someone else we are not one giant organization we are 2700
small businesses so keep in mind this is I'm what I'm reading from is about 10 years old so now they have you know over 3,400 we are not one giant organization we are 2700 small businesses wrapped up into one big company Society tell tells
us you're a big company act like it we say no you don't get to Define us we Define ourselves we go against the grain in almost everything that we do and so there's just crazy stats about the company that more more than
95% of our current batch of general managers have been promoted from within for nearly all of our senior leaders have worked their way up from entry level positions so that leads into the second thing I want to tell you about
which is this interview with the CEO that had succeeded kierin kierin our Bob we'll call him Bob uh when he stepped down his name is Will oberton oberton started out at Fel as a store clerk so he went all the way from they they mean
business they went all the way from store clerk to CEO and so what I'm reading from I found this out after I finished the book because I'm like it's just obvious I like I wonder if Buffett and Monger have ever talked about these about this company or the way they about the founder or anything like this and it turns out when you search it's like oh yeah Buffett would bring up this company in interviews and so I just want to pull
out a couple things from this interview with the CEO so it talks about what fasal is it's North America's largest wholesale and Retail distributor of nuts bolts hand tools and other supplies to the construction and Manufacturing markets it has built a loyal following among customers due quality and service and won countless fans on Wall Street for its Thrifty noons ways Warren Buffett is an admirer having praised
fasel in an interview he loved its robust financial performance and its straightforward business plan this is their business plan boosting Sal by adding customers and increasing its interaction with them the unexpected shout out prompted fast andol CEO will Overton to trk to Omaha to have lunch with Warren Buffett the two cost conscious bosses hit it off we talked about the importance of sticking to the basics and one thing they talk about is
that the CEO is not afraid to get his hands dirty in fact this is something a bob preaches throughout the book so you know see he'll jump in wherever it's needed and the commitment that he has so let's say they're behind he'll go help with deliveries he'll help with sales he'll help with customer service calls he actually the CEO actually earned went through the process of getting a CDL which is the commercial uh truck driving
license so he could pitch in when drivers truck truck drivers are sick and so there's another description of fas that talks about the fact that when what Buffett realized that it says the two cost conscious bosses hit it off and how having a low cost structure is actually a major competitive Advantage because all the other things that it fuels and so it says anybody who claims that expense Management in fality is not a
competitive Advantage should pull up the long-term chart of fast and all stock price and see how a company that sells nuts and bolts and keeps cost low somehow has been able to eat their competitors lunch for decades by this is the The Virtuous cycle I think that Buffett realized as well by keeping operating costs very low fasol is able to pay their employees increas incrementally higher wages and thus more effectively develop and retain talented
salespeople the quality of service and depth of knowledge that the employees have eventually brings in more Revenue which grows the business and allows it to further lower operating expenses as a percentage of Revenue thus allowing for more hiring of top quality employees which brings in more Revenue this is an overlooked virtuous circle of sorts and then one last thing before I pick back up the book My Friend R Addie
and I were texting about this so R is the one he he does the rain maker podcast he's a phenomenal researcher he's also the one this book is really hard to find so he's actually sent me this book and after reading it he came to the same conclusion that I did and he says I realized how much Bob embodied the Monger isms on incentives and how he only focused on how he can make fast and all the best company to work for the
results speak for themselves $38 billion market cap for a company selling commodity products and then he picks up on something that Bob says himself it's crazy to me how stuff like this is kind of common knowledge but people don't
really apply it and so immediately the book begins with an idea that's going to sound a a lot like one of monger's famous fa favorite Founders which is Jim snagle of Costco of Costco leadership must constantly be replenished every
leader knows that a big part of leadership is training other people to be good leaders so let's pause right there every leader knows that a big part of leadership is training other people to lead good leaders that's the way Bob says it you know the way that Jim syal says it he says as a the leader of your company if you're not spending 90% of your time teaching you're not doing your job the business organization achieves
long-term success by continuously replenishing leaders inside the organization the word inside is important you can bring in a leader from the outside of the organization but it's much more efficient to develop those you already have and then immediately Bob pushes back on this idea that the person that starts the company can't be the person that leads the company the belief that entrepreneurs must eventually be replaced or supplanted by skilled
management is false entrepreneurs are often time perceived to be eccentric yeah definitely this can lead to a belief that a more systematic planner is needed to quote unquote manage the organization entrepreneurs can learn
leadership just as well as anybody else an entrepreneur success is as much due to his leadership skills as his work ethic Walmart's Sam Walton was a leader when the company he started was small and he remained a leader throughout its
remarkable growth so we're already into you know I'm on page six of the book for God's sake and there's there's already been at least three examples of people that monger and Buffett admire Sam Walton Jim Sagle Les Schwab the commonality between how they all ran their businesses just jumps out at you in fact the two pages later he's going to come up with an idea or actually the next page that sounds a hell of a lot
like what Monger would repeat as well and so he starts out with saying hey keeping your organization simple is not simple but it is very important and so his idea is like the way to keep your organization simple is Orient everything around this commitment to a common goal our society places too much importance on organizations we tend to hold up the structure as important rather than the people who make it up our first step is
to show organizations for what they really are groups of people who come together for a common purpose the business organization combines the talents of many in the pursuit of a common purpose all of his ideas okay this entire book all of his ideas serve that idea that you need to commit your entire organization to a common goal and then you have to look out for things that distract from that common goal that is why he's saying keeping the
organization simple isn't so simple human nature goes against it successful organizations will achieve their success because they find better ways to involve their members in the purpose of the organization so that is what I meant about sounds a hell of a lot like Munger well Munger says that the most elusive of all human goals is keeping things simple and remembering what you set out to do I really think this book and Bob's
main thesis this which he calls hey we need to keep everybody in uh your organization you know in concentrated in pursuit of that common purpose of that common goal is the way Monger would would summarize that for us is that you have to keep things simple and then remember what you set out to do and that's very difficult because especially over a long period of time because it goes against your human nature that's
why he says it's the most elusive of human goals and so Bob like many of the Great Founders they do a great job of distilling down to the essence the principles upon which their business is built into maxims and aphorisms that you can remember you can repeat and you can take with you so he says Hey keeping the organization simple isn't so simple what's the next one The Uncommon pursuit of the common goal I almost feel like
when I'm reading this book he's saying hey guys this isn't rocket science this is a simple idea that's not easy to do over the long term and so what is the uncommon Pursuit of the common goal organizations succeed to the extent that
all of their members pursue a common goal this is one of those simple ideas that are so difficult to practice the greatest danger to the success of the organization is that it starts developing unnecessary subgroups and
these subgroups start pursuing their own goals rather than the common goal of the organization that is bureaucracy is what he's describing listen to what Napoleon said nothing this is a direct quote from Napoleon nothing is more important than unity of command you should have one Army acting on one line and led by one Commander Bob says organizations succeed to the extent that all of their members pursue a common goal and what I love
about the simple language and the simple examples he gives in the book it immediately makes you stop it made me stop it's like okay what is my common goal that I am pursuing and then once you identify that then you start
auditing how you're spending your time and so obviously my common goal is very simple to help you learn from History's Greatest entrepreneurs and to do that better than anybody else can in the entire world and so the second step with
that I was like okay well let me audit how I'm actually spending my time because anything that's not in service of that common goal is a distraction and should be eliminated and so then Bob says well how do you keep everybody focus on a common goal remember he says we sell commodity products for God's sake the only the only competitive Advantage is we have is our people so it says uh how do you keep everyone focused
on a common goal first you start treating everybody equally the organization cannot have some people who are put in a different status than the rest you don't have executive dining areas and assigned parking spots or
stock options for only the highest paid people or even dress codes for only some of the people if the engineers can take off to watch their kids in a softball game so can the lath operators and the data entry people so pause right there
immediately when Pops to mind when I get to that section that sounds a hell of a lot like the stuff that Les Schwab and Sam Walton would preach as they built their business this is from Les Schwab's autobiography we have had over the years some people in the office that sometimes think that they are more important than the stores the office serves only one purpose and that is to serve the stores some of our office people sometimes
wonder about this but I've warned them don't to me because this is the way I want it if you want to go out and start at the bottom changing tires and work into a manager's job then hop right to it if it weren't for those men in the stores working their asses off in all kinds of weather missing meals and working God awful hours you wouldn't even have a job so if you're working for Le Schwab is he not easy to interface
with he's very easy to understand there's no those that's like five sentences there add the end of the five sentences you know exactly what Les believes and how he runs his wants it to run his business same Walton said very
similar he says if you're not supporting the customers or supporting the people that support the customers then we don't have need for you in Walmart kept it very very simple the reason that's so important because if it's not simple it
won't scale Bob continues make sure that everybody can enter your building through the same door so this whole point is like listen these like special stock options these assigned parking spots these executive dining areas these separate entrances over time it just you just you're telling people with your actions these are the special people you guys aren't the special people so let me go back to jungju Yong chungju Yong
wrote the most inspiring autobiography I have ever read I got to redo do another episode on it because I think it was like episode 1 17 or something like that chungju young right is the founder of hondai he starts off so poor as a son of a he's is a peasant son of a peasant farmer that he has to eat tree bark in the winter to survive who ends up dying as the richest person in South Korea this is what he says from his
autobiography he's writing his autobiography he's like 90 and it's going to sound a hell of a lot like what Le Schwab says what Sam Walton was saying what Bob is saying in this book some time ago someone proposed installing a separate elevator for executives at the company headquarters I rejected the idea right on the spot I truly despise the inflated sense of ser superiority held by Executives who expect different treatment from their
workers why on Earth would anyone need a separate elevator he continues when I dropped by a construction site one day the workers were busy laying a new carpet believing that this was a formality that they should observe for a their boss so literally like a red carpet so their when their boss is a site visit he he can walk on it this was chun's response such formality is meaningless with our company motto their company M motto was dilig
frugality and affection hanging right there in the wall should they have a spared a second to think about the workers laying carpet is laying this carpet practicing for gity a carpet was a luxury that I despised after luxury comes corruption I have never seen a country Prosper with a leader who enjoys luxury I have never come across a company that thrives under a luxury loving wasteful owner and so we go back to Bob why is it so important to have
everybody working as a single cohesive team to have everybody thinking that their role that they're playing is just as important as the person next to them at fast andol we believe that you can be the best salesperson in the world but if the order picker doesn't pick it right or the truck driver doesn't get it there on time or the billing clerk doesn't bill it correctly you end up with an unhappy customer everyone is key you are
better off working to make everyone equal so they stay focused Co back what do you think he's about to say I bet you can already finish his sentence for him you are better off working to make everybody equal so they stay focused on the common goal of pleasing the customer he's going to give us more advice on how to do that you need to install a reward system that keeps everyone focused on the common goal he's talking about
incentives if you have fast and all's common goal of growing our company through customer service you will avoid any rewards that don't fit that goal and so when I got to this part of the book I thought about monger Charlie monger's
like three rules for incentives and so this is what he said number one everyone underestimates the power of incentives number two never ever think about anything else before thinking about the power of incentives and number three
which Bob is nailing the most important rule in management get the incentives right and again you have to be careful of these subgroups that are going to naturally develop in your company because his whole point is like listen your incentives have to they have to fit your overall common goal right right the common goal of pleasing the customer and so he gives an example if you do these incentives based on like separate groups
they can optimize for things that go against your common goal so he gives an example that this is a really smart idea we do not reward production people for minimizing scrap if some of that scrap you eliminate comes from the extra parts that guarantee you have a full order quantity ready when the customer wants it the incentive superpower that Monger talks about you clearly see by picking up the book we're like a quarter into
the book that Bob clearly has thought a lot about this of course he has he had 35 years of experience I think by the time he wrote the book and I think 47 years by the time it was published again or something like that just a ton Decades of thinking about this and experience with a single company another piece of advice if you want to use a financial reward to motivate pay it right away do not wait until the end of
the year or pay a special bonus for to to to pay special Bon bonus or profit sharing at pay it at the end of each month if you can so right you know right after the to reinforce that good behavior that you want or at least at
the very least quarterly do not wait till the end of the year another main theme of the book is the fact that he's got this radical belief in encouraging and using everybody's creativity throughout your entire organization and
he really goes against remember he's got an NBA and this is what one of the things that also reminded that I think Bob had in common with monger and Buffett when you read the shareholder letters you listen to them what they said at their AGM he just repeat over and over again like like business school they're teaching you the bad things and so his whole point is like this command and control structure was not something
that Bob believed in he thought it was actually would limit the growth of the company and so he said and he gives an example of the idea that like one person or like a group of leaders at the very top should should should do everything is actually harmful and is eventually going to lead to the decrease of growth in your company and he learned this one of the ways he learned this is when he was a boy scout when he was a young boy
one of my first lessons in how not to promote creativity came from the Boy Scouts The Troop that I joined when I was 10 had a leader who did not challenge the kids he arranged everything for us so they' go on camping trips and instead of teaching them you know obviously when you teach somebody when you let them do something they've never done before they're going to make mistakes and so the troop leader like oh
you know I'll set up the the the tent I will do all the cooking I will start the fire they're essentially just sitting around useless and he says we watched other troops cooking stew making fires setting up TPS and rope Bridges while we sat around at the end of a few years nobody was above the rank of second class Scout in our troop today I probably couldn't survive in the woods for more than a few hours and immediately translates that lesson to
what he observed in his you know multi-decade career too many business organizations practice central planning to the extent that the creativity of their people is effectively 95% curtailed and he rails against this because he was taught that this is better management and he clearly does not agree with this businesses that become large and quote unquote better managed saw their markets and profits eaten up by Nimble startup firms with
great ideas and efficient execution many large companies resemble small socialist States ideas and plans all come from the top the majority of the workers are treated differently than the top planners and most of the workers receive little or no self-fulfillment in their jobs and so this is when he starts repeating another one of his ideas like you have to learn to delegate he was afraid to delegate it's a common he calls
the fear of uh delegation common but he thinks it's a terrible bad habit why do companies develop such bad habits simply because the people at the top of the organization start focusing on how smart they are rather than focusing on how little they know if 95% of the people in your company do not participate in the creation of ideas they will spend their time thinking and talking about cars Sports and office politics to add insult
to this loss of creativity most of the people who are ignored are on the front lines to go back to What Les said Les Schwab said and Sam Walton said right you're either serving the customer or serving the people that serve the
customer we don't need you the founder of UPS Jim Casey same thing he didn't want to sit and talk to his Executives all day right I've told the story a million times because it's just very memorable and hilarious all not even
hilarious just like very informative the fact that every he had a driver and he he instructed his driver every time that we pass a big brown UPS truck pullover and Jim would spend all his time as much time as possible talking to the people on the front lines the people actually delivering the service to his customers so let's go back to this to add insult to this loss of creativity most of the people who are ignored are on the front
lines running the machines are talking to the customers while the people doing the thinking and the planning are isolated from both which group do you think receives the best stimulus to Foster creativity decentralize decision-mak decentralize decision-making decentralize decision-making he wrote wrote that three times I'm not you know I'm not repeating that on my own say it a few times so it becomes a mantra he feels decentralized this extreme
decentralized decision- making is one of the most valuable things that they have in their company culture with over 2600 stores around the world the decisions about which items to stock in each store are left to the people in the store computers help to pick a basic starting inventory but items are added as as store personnel gather information about customers in their local market the people in our stores are able to
special order items that their customers request that are usually unavailable within our warehouse system that idea of allowing them right you have a a one-off special request from a customer that then you can fill you have the complete autonomy and Trust from your organization to fulfill that request what's going to H like and then you obviously inform the customers like hey this is special we have to do this for you and then you do it to their
satisfaction you have a customer for life this is something that I I one of my favorite biographies I've ever read I think it's episode 316 it's on the founder of Bugatti and the reason I even found this book is because I became obsessed with Enzo Ferrari and I did a bunch of episodes on him and in Ferrari's biographies it talks about hey his blueprint he was just copying what Bugatti did and so I find this like
crazy biography of Bugatti written by his daughter I think in like the 1960s and there's a story in there that I never forgot that Bugatti receives a letter from one of his customers okay about a car that's still operational a Bugatti car uh that the guy bought 30 years ago and he something broke on it he needed it fixed and Bugatti reads his letter and then writes him back and the the the the punchline is the the
incredible level of customer service and and just love for the work his work that Bugatti had was Bugatti offered to custom make they didn't stock that part they didn't even have it anymore he's like hey I'm going to custom make this
replacement part part for that car that's almost 30 years old and I'm to give it to you at cost that longterm view okay not trying to make a couple dollars on this C first of all even doing it it's remarkable right and then
selling it at Cost is actually genius because how many people is that satisfied customer going to tell a lot more than whatever markup you would make on that oneoff part and so Bob then tells us why is this so important because it's this virtuous cycle it leads to consider where your new product ideas come from we encourage people in each store to come up with products to add to our general lines if a customer asks for a product that we don't
currently sell we encourage our people to find a possible source to satisfy this customer's request if successful the store may then start selling the same product to other customers our nearby stores May then also start offering the item eventually it becomes a companywide product so a lot of people are like okay well how are you going to manage you know you got at the time 2700 of these little stores you know they're
all run independently and he's like listen Bob's like of course you need some rules but you don't need these thick manuals that nobody's reading you need you need a handful of principles all oriented oriented around the goal of
the organization this is why it's so genius this idea of just organizing my entire company on this commitment to a common goal and then regularly checking like is the action is the way we're spending time is this idea in service of
that common goal yes or no uh so he says you need rules but you can probably put them on three sheets of paper and give them to each new employee these rules will state the common goal for the organization these rules should instill a good understanding of the common goal of the organization he's repeating it again and he says what his common goal is growing our cor our company through customer service eliminate all those
three- ring binders filled with standard management practices another suggestion to develop the potential of your people is to emphasize training most of the people who join us come out of school with little expertise in our product line we see their potential and give them an opport opportunity to achieve most of our executive officers started in entrylevel positions in Fastenal stores so he's going to use this this
importance of constantly training over and over again I actually think there's a better word for that Soul price who is the most influential retailer to ever live Sam Walton took more ideas from him Jim Costco or Jim Costco Jim snagle of Costco with Soul prices uh mentee and he started working for so price when he's like 19 he gives this interview when he's like 70 he like people like oh you must have learned a lot so price he like
no I didn't learn a lot I learned everything I know the amount of successful retailers that built you know in in some cases many cases hundreds of billions of dollars of retail companies Costco Home Depot Walmart that talked
about and learn from Soul price it's just absolutely incredible but I think Soul has a better he has this this Mantra this this Maxim that he would repeat and he says you train an animal you teach a person and so when Bob uses
the word training I automatically substitute that for the word teaching that's why think about why Jim Sagle who is obviously the mentee uh of so price he's like if you're not spending 90% of your time teaching you're not doing your job you're teaching or training all of the people in your organization the standards and expectations of this common goal that your entire business is oriented around and so the way Bob would
describe this is he wants leaders he doesn't want managers and if you're a leader it's much more like a coach than it is and he gives us baseball he gives us Sports analogy right and so he talks about the difference between a coach in basketball and a manager remember he wants leaders not managers and a manager in baseball have you ever considered and this this will basically illustrate his entire idea around this uh chapter have
you ever considered the top supervisor on a baseball team is called a manager while the top supervisor on a basketball team is called a coach look at the control each one has his whole point is like you got to give a sphere of
relinquishing control the baseball manager is controlling each move of the player waving the short stop over a little or signal when the runner should steal uh the base or ordering the pitcher to walk a runner in the baseball
game the manager is in complete control and fits the old style idea of a manager what he means by old style idea of a manager is what they teach in business school which he feels is useless in the basketball game the coach is relying on each player to make quick decisions about passes and shots this is much more of Bob's uh philosophy okay the coach may send in a play after a timeout but control swiftly passes back to the play
on the court in business the manager controls what each person does assigning tasks and communicating the results upward Bob does not like that the leader however tells the team members what the group has to accomplish and challenges them to find the best way to do so so now that we know that he wants leaders and not managers let's get to his definition of a leader a leader is somewhat like that of the master learner
among Apprentice Learners of all different levels with the intention of developing in more Master Learners to allow the organization to grow goes back to that his stated goal on the back cover our commitment to a common goal
which is growth through customer service and then he tells a story to illustrate what this would look like inside of an organization I worked one summer in quality control Department of a Metal Products manufacturer there were two
people who managed the department the first was the general manager who had a separate office the other was an assistant who had a desk out with the rest of us whenever we had a question or a problem arose nobody went to the general manager who's hiding in his cave right we all went to the assistant who was accessible the assistant was growing in stature with the overall plant managers because the assistant knew so much more
about everything else that was going on so over time the assistant leapfrogged the manager within the organization the assistant was the true leader stay out there on the front lines where the action takes place you learn more when you see everything up close and then he repeats do not deviate from the common goal and the way he would say this is the team's pursuit of its common goal must be defended by outside attempts to weaken it and then
spread throughout the book it this simple but I would say very valuable pieces of advice here's one of them pay attention to the Silent People when you are leading if half of the people are not asked for their new ideas you only have a 50% chance of finding the best solution pay attention to the Silent People when you are leading this reminded me of uh Brad Jacobs uh one of the most popular episodes I've done
recently was episode 335 it's how to make a few billion dollars by Brad Jacobs excellent book also written by a person that loves Founders Brad sent me a great message that he said he was addicted to these founder book reviews
but in that book that he wrote I thought it was actually genius so you know he buys a bunch of uh new companies all the time and he was shocked that how many people never solicit advice from the people working in the company it's very
similar to what Bob's telling is here and so he's got two questions they would ask every single employee and I think there's genius in the Simplicity of this idea number one what's the single best idea to improve our company or what's your single best idea to improve our company rather and number two what is the stupidest thing that we're doing as a company and he makes the point in the book like you would be shocked at how
much valuable information that you get just from asking this two simple questions sounds very similar to what Bob is saying here if half the people are not asked for their ideas you only have a 50% chance of finding the solution and then something Bob also talks about is just how much he learned just by the example that other people examples good and bad from other people he worked with and worked for over the years and this is really like we're
halfway through more than halfway through the book and it really clicked for me the first time I was going through because you obviously you know before I sat down to talk to you I I not read the book but I reread it the highlights and notes over and over again I I'll read what I wrote on the Note in one second he says while I attended College I worked for a manufacturing company that employed about 300 people I
spent a lot of hours in the office on Saturdays sometimes other people came in on Saturdays but only one person was certain to show up the president and founder of the firm at the time he was 72 years old he had an obvious interest and pride in what was going on he knew each employee and appreciated his or her contribution I count him as one of the three people who was most influenced who has most influenced my understanding of
leadership and so I got to that part and I reread it I was like wait a minute he knew each employee and appreciated his or her contribution and this is when it started to click if his goal we're talking about Bob now okay this is my
note to myself if his goal if Bob's goal is growth through customer service he has to fully develop every single employee that delivers that service his constant repeating that fastenal's Advantage is people serve his main goal
all of his ideas work together it's that virtuous cycle that virtuous flywheel there's another advantage of decentralized this extreme decentralized decision making and that's the flexibility to respond to changes in the
future the future is not just next week or next month but years out fast andol has been growing at a rate where it doubles in size every 2 and 1 half years that means that in five years we are four times the size so our people have
to think that in 5 years we will haul four times as much product around the country I love this sentence good ideas start by simple approaches to what lies ahead a proactive leader understands that unless one attends to the Future you get locked into the past the main reason fast andol doesn't grow much through acquisition is that we would buy too much old baggage with acquired companies we want our leaders to do what
is best for what lies ahead rather than repeating what brought success in the past anytime you stop thinking about the future some people with better ideas will come along to eat your lunch anytime you stop thinking about the future some people with better ideas will come along to eat your lunch and if you have the flexibility and the empowerment of all and the decentralized decision-making and this complete autonomy that fast all does sometimes
you're the one that is inventing the future so let me go back I'm going to put the book down for one second and I want to go back to that story of the CEO that was meeting with Buffett the see that succeeded cin so this giant part of fastenal's business now after this was invented after this book was written okay the F the first the first uh version in 1997 was the fact that they have these vending machines and the way
I think about the vending machines is like you know think of every anytime you've been in like a hardware store right you go Ace Hardware or home deep or anywhere else and think about how all the equipment and supplies are presented you know like kind of like searching through it's kind of like a chaotic mess so will Overton which was the the CE the former CEO but he's not longer CEO now but he's the one that was CEO after Bob
okay Overton also developed an industrial vending machine system there's a video on YouTube that's fascinating about this it's from fenol fenol has their own YouTube channel you can see the vending machine if just type in fast andol vending machine if you're interested in this I thought it was actually cool uh Overton developed an industrial vending machine and I searched for it after I read this I like I got to see what this looks like
Overton had developed an industrial vending machine system helping Bob realize a lifelong goal in 1951 as a 12-year-old working in his father's auto part store Bob was bothered by the fact that his dad had to send customers searching for nuts and bolts to someone else's store he imagined that a vending machine installed at his father's place might pop out fasteners like gumballs once on his own he tried to convert a
cigarette vending machine to this purpose he couldn't get it to work so he started selling Fasteners over the counter thus fenel was born 40 years later working with a snack machine manufacturer and off-the-shelf software will Overton got the job done fast vending machines have been a big hit with customers so their vending machines are actually installed in their customers locations it cannot get simpler for this you got to watch the
video I'm telling you Overton got the job done Fastenal vending machines had been hit been a hit with customers generally helping them save 30% on supplies the machines have cut down on theft and enabled automated reordering
that four-year-old business which I think now is like 15 years old with within four years old they this new idea already started contributing to 36 % of the overall sales of fasta who know I think it's like over 40% now think about
that go back so now I'm picking back up the book think about the vending machine idea which was not invented when Bob wrote these words this makes these words hit so hard we want our leaders to do what is best for what lies ahead rather than repeating what brought success in the past anytime you stop thinking about the future some people with better ideas will come along to eat your lunch thank God God due to their unique enabling of
this and this super belief in the power of people they were the ones that came up with the better idea they were the ones that invented the future thus avoiding somebody else coming along and eating their lunch and so that relates to this idea of Bobs that you have to overcome the common fear of delegating and he has a really interesting way to illustrate this idea that was rather unexpected to me and I don't think I've heard
described like this way this way anywhere else the death of a family member or a close friend gives us a sense of great loss a feeling some that something will now be missing in our life what we are missing is the uniqueness of the person who has died a uniqueness that we were privileged to know and understand that same uniqueness is present in everybody we just don't come around to seeing it and to understanding it our first step to
becoming a better leader is to start valuing everybody for The Unique humanness when I was a young man I learned that everyone did better at tasks than I thought they would before starting them I recognized this as a bias within me and adjusted my willingness to delegate accordingly I delegated more than I used to and I saw even better outcomes my bias was a common fear of delegating this came from not appreciating what talents lie hidden
in other people and he talks about people that started just picking out orders are now CEOs or or very valuable executives people who started picking orders or answering phones at Fastenal have grown to lead hundreds and thousands of new team members and so some of this fear of delegating comes from you know this the giant egos that a lot of people in entrepreneurship have and a lot of leaders and Executives
definitely have and so he's got a piece of advice and he's got four ways to do that he's like you have to learn to suppress your ego Sam Walton said the exact same thing he said listen you don't have to have a small ego to work at Walmart but you have to be you know very Adept at height it at essentially suppressing your ego is the way Sam Walton is the way Bob describes Sam Walton's idea so Bob says learn to suppress your ego the first place to
start if you want to suppress your ego is to admit that you have one we all have one and nobody likes Theirs to be insulted and in a work environment egos in a typical work environment especially at a successful company egos are in full bloom so how do you work at suppressing your ego I can give you four suggestions that I observed over the years number one treat everyone as equals number two learn to stay silent sometimes number
three be willing to get dirty that goes back to the CEO you know who's answering customer calls and he's driving trucks he's not like I'm the CEO of this you know public company how how can I be a truck driver he's like well what's my goal our common goal our commitment is to this common goal of growing through customer service is not driving a truck because we're short-handed in that department and therefore our customer delivery
comes late later than it would if i' get behind the wheel is that serving our customer is that me being committed to this common goal no it is not so number three be willing to get dirty number four do good things anonymously and then he feels the need to offer what he calls a few words of caution there's some things that you're going to have to watch out for goes back to this number one keep the team goal consistent with that of the main or
organization so you know you're going to have subgroups he calls them subgroups teams they will naturally develop their own goals and in many cases those goals will be in conflict with that of the main organization one Department can develop such great spirit and cohesiveness that it loses sight of its role in the larger organization keep that team goal consistent make sure all your team goals are consistent with that
of the main organization and another way to keep on the path keep reminding yourself how little you know pardon me if I keep telling you how to forget how smart you are even if you are smart you're better off forgetting about it
start thinking instead about how little you know compared to the vast amount of knowledge in the world consider that everything that I have written here about leadership is something I learned from someone else they either taught me
or I learned from their example good or bad nothing here stands out as a brilliant breakthrough everything is a passage of information through the lens of my observations and I have no way of knowing how much is still out there to learn and so he talked about earlier in the book let me go back to that real quick that even as an elderly gentleman he's still constantly learning at my senior citizen age I am still improving
perhaps at a faster rate than I was several decades ago with the experience of a lifetime you're able to find the final pieces to complete the puzzle and then if you think about what he's saying here he like you know there's nothing
here stands out as a brilliant breakthrough everything that I wrote everything I've learned I learned from other people either through their example or otherwise that's another form of suppressing his ego of keeping your
ego in check and a good way to keep your ego in check is just to keep reminding yourself how little that you know Thomas Edison has a great quote about this and he says we don't know 1 1,000% of anything and I think it's important to point out the reason he keeps talking about pride and ego is because that gets in the way of your organization's commitment to the common goal so he's going to summarize this because he loves
maxims and he he talk he makes this 10 basic rules about leadership and he says the Simplicity of each rule must overcome the thick walls of Pride that prevent its implementation one can only dream of a world where these rules are universally practiced and we know because human nature doesn't change they they'll never be universally practiced and so our ability to actually learn and change our Behavior will always be at odds with the larger human
nature that's why I think it's so valuable it's not because the ideas are are so hard to understand they're so hard to apply and especially apply them over you know since 1967 like fenol has number one challenge rather than control number two treat everyone as your equal number three stay out of the spotlight number four share the rewards number five listen rather than speak number six see the unique humanness in all persons
number seven develop empathy number eight suppress your ego number nine let people learn number 10 remember how little you know follow these rules and provide leadership to your world and then what I love is he ties this all together to serve a mission that is bigger than anyone person anyone company anyone industry any one lifetime he says the example that we set in the workplace will live on after us your life is an example for all to
imitate what parts of it others will imitate depends on the respect they have for you if you have earned respect through your leadership others will imitate your actions and you will Influence People beyond your generation the exceptional leadership of a Thomas Jefferson are an Abraham Lincoln or Martin Luther King or Helen Keller or Alexander the Great lives on for centuries and makes the world a better
place for all of us become a leader at home and in your work make the world a better place because of what you do and that is where I'll leave it for the full story highly recommend reading the book if you want to buy the book using the link that's in the show notes on the podcast player or available at Founders podcast.com you'll be supporting the podcast at the same time that is 360 books down 1,000 too and I'll talk to you again soon