Arthur Blank, one of the founders of Home Depot, wakes up every morning saying “Who will destroy me today if I don’t keep my eyes open.” Knowing that retailers can’t sit still or they’ll be eclipsed by the competition, Arthur Blank and Bernie Marcus started Home Depot after being laid off unexpectedly from Handy Dan Home Improvement.
Rather than follow the standard hardware store model, they looked outside the box and envisioned a huge warehouse store for the Do-It-Yourself person. They figured that rather than make separate trips to plumbing suppliers, electric suppliers, lumber yards, and so on to complete a home remodeling job, customers would prefer a one-stop warehouse with many departments.
Moreover, rather than hiring salespeople, they visualized hiring tradespeople with real-life experience to man the different departments. And not only would these workers be paid in salary; they also would receive stock options so they would have a vested interest in the company’s success.
The plan worked. At Home Depot payroll is not considered an expense but an investment. The strategy paid off so well that management had to develop policies to limit managers from working more than 55 hours per week because they became so dedicated to their stores’ success. Also no one, not even executives working for headquarters, can work without first working in a store.
This keeps the focus on the store and not on headquarters. Even vendors at Home Depot are encouraged to strap on the orange and work the floor to better understand the customers. Successful entrepreneurs know that you always have to keep your eyes open and constantly need to look at new ideas to separate you from the competition.
What are you doing to keep one step ahead of your competition?
