There are plenty of inspiring stories in William C Taylor’s Simply Brilliant that allow any business to change its trajectory. However, the wholesaler in you is going to love the part where the author visits Fastenal, a distributor of industrial supplies based in Winona, Minnesota.
Winona is famous for lending its name to TV and film star Winona Ryder, who was born nearby, but Fastenal is famous for a Bloomberg Businessweek report, which claimed that in the 25 years after the October 1987 global stock market crash, it was the most successful listed company in the US. The share price of the company that ‘makes the unavailable part available’ rose by 38,565%, compared to Microsoft’s 10,000% and Apple’s 5,542%.
Taylor, who rose to fame as the editor of Fast Company, which charts the successes of Silicon Valley start-ups, finds that Fastenal’s success is built on its people. The company operates about 2,700 stores, each a standalone business with ‘a clear leader, full profit and loss responsibility, and grassroots zeal for growth and service. It also maintains a proudly old-fashioned culture… that recruits many employees while they’re still attending college, starts a majority of them in part-time jobs, prizes lifetime careers, and drills everyone on the timeless basics of sales and service.’
Lee Hein, one of Fastenal’s vice presidents of sales, explains to Taylor that the business’ success is built on people who run their businesses like they own them, “who stay up late thinking about the next customers [and] the next piece of business”.
Fastenal started out in 1967 as a 1,000sq ft store that sold nuts and bolts. A second location followed in 1971. In 1987, when it listed, it had 50 stores, 250 employees and US$20m in sales; today, it has US$3.7bn in sales, achieved by growing one store at a time.
“It’s a mindset,” says Hein. “Run your business as if you own it. When you trust people to solve problems and make decisions then let them go, that’s when the magic happens.”
Another VP, Gary Polipnick, says: “The toughest thing for the new generation coming in is the culture. We want people with common sense, a strong work ethic; people who want to learn the business, understand our customers, figure out how to solve their problems and save them money.
“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 where you went to school; we care about what they can’t teach in school – wisdom, savvy, entrepreneurial spirit.”
Taylor argues that Fastenal is a success because its leaders obsess about creating an environment in which its people can be successful. They are less obsessed with the resources and assets they control and more confident about when they set the stage for each of their 2,700 local companies.
Going forward, he writes, the business leaders with the biggest impact will be the ones who figure out how to win the most allies, not the ones who issue the most commands or exert the most power.
Linda Hill, of Harvard Business School, agrees: “Those in positions of authority have been taught to think that it’s their job to come up with the big idea,” she says. “[In reality though], sustained innovation comes when everyone has an opportunity to demonstrate a ‘slice of genius’. Breakthroughs come when seemingly ordinary people make extraordinary contributions.”
Taylor illustrates this with the story of how Rob McEwen, head of Canadian mining company Goldcorp, set up a competition to advise where he should drill for gold on a 55,000-acre site. In Taylor’s words, he “turned a bunch of unknown brainiacs into mini-celebrities in the gold-mining business”, and turned Red Lake into one of the most productive mines on the planet.
There are seven other chapters that will equally challenge and inspire you. Simply Brilliant will help you to your pot of gold by helping you reshape your business strategy.