Preface: We will ensure that associates continue to possess unsurpassed product knowledge and maintain their dedication to customer service and respect for their colleagues and for the communities in which they work and live. — Arthur Blank
Home Depot: Two Good Guys Success
“Bernie Marcus and Arthur Blank dreamed up The Home Depot from a coffee shop in Los Angeles in 1978. Avid DIYers, they envisioned a superstore that would offer a huge variety of merchandise at great prices and with a highly-trained staff. Employees would not only be able to sell, but they would also be able to walk customers at every skill level through most any home repair or improvement.
With help from investment banker Ken Langone and merchandising guru Pat Farrah, Marcus and Blank opened the first two Home Depot stores in Atlanta the following year. The 60,000-square-foot warehouses dwarfed the competition with more items than any other hardware store. But the heart of Home Depot was the expertly trained floor associates who could teach customers how to handle a power tool, change a fill valve or lay tile. It wasn’t enough to sell or even tell — associates also had to be able to show. Soon, The Home Depot began offering DIY clinics, customer workshops and one-on-one sessions with customers.
Marcus and Blank implemented a customer “bill of rights,” which stated that customers should always expect the best assortment, quantity and price, as well as the help of a trained sales associate, when they visit a Home Depot store. These commitments were an extension of the company’s “whatever it takes” philosophy.” [i]
Bernie Marcus was the son of a poor Russian Orthodox Jewish immigrants. With ambitions to be a psychiatrist during his high school years, but unable to afford college or medical school, he faced his career realities and obtained a job in discount retail. His map to the entrepreneurial launch point began at United Shirt Shops eventually leading him to Two Guys discount Store in New Jersey. With a sharp-eye towards making the journey count, he was soon in charge of more than $1.0B in business at Two Guys. That position gave him the visibility for an opportunity to obtain an executive position with Handy Dan Home Improvements Centers where he was chairman and CEO.
Arthur Blank was raised in Queens New York. He learned the accounting trade and obtained a job at Arthur Young & Company following his formal education. Blank then joined his family’s pharmaceutical business that was purchased by Daylin Corporation. Daylin was an investor in Handy Dan Home Improvements Centers.
Bernie offered Arthur a job at Handy Dan and the two enterprising future business partners soon became best friends. Soon the Daylin Corporation CEO set the two free to pursue their dreams from that coffee shop conversation in 1978, by firing them both. As Bernie and Arthur made their way out the door, the CEO Mr. Langone told them to “open up that store you talked about!”
They initially considered such names as MB Warehouse and Bad Bernie’s Buildall, and then an investor suggested the name Home Depot. Working business connections with Ken Langone a New York investment banker who organized the initial group of investors, and merchandising consultant Farrah helped that coffee shop dream to bud into a very successful enterprise.
When they opened the first store, Home Depot had so few customers that if Bernie or Arthur saw someone leaving their store empty-handed, they took it personally. The legacy of Home Depot is build on the tenet that they are in the training business, and that they are the college for learning flooring installation, kitchen and bath remodeling, millwork and even computerized registers.
Bernie and Arthur summarize the impressive ascension from humble beginnings to entrepreneurial success as learning how important the folks are with whom they surrounded themselves, and that is their secret — they surrounded themselves with people at the Depot who were better, smarter, and more talented than they were, and invited them along on the Home Depot train.