[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_138":-5,"_139":-5,"_140":141,"_142":143,"_144":145},"routes/clips.$id.$slug",{"_9":10,"_11":12},"clip",{"_13":14,"_15":16,"_17":-5,"_18":19,"_20":-5,"_21":22,"_23":24,"_25":26,"_27":28,"_29":30,"_31":32,"_33":34,"_35":36,"_37":38,"_39":40,"_41":-5,"_42":-5,"_43":-5,"_44":45,"_46":-5,"_47":48,"_49":50,"_51":-5},"canonicalUrl","https://howleaderslead.com/clips/1632/use-referral-bonuses-to-find-great-talent","id",1632,"title","Use referral bonuses to find great talent","subtitle","transcript","WEBVTT\n\n1\n00:00:00.000 --> 00:00:05.000\nAnd so we have a referral program that pays them significant amounts of money.\n\n2\n00:00:05.000 --> 00:00:09.000\nA lot of you have been doing sign-on bonuses and we've tried those and they\n\n3\n00:00:09.000 --> 00:00:09.440\nmight work\n\n4\n00:00:09.440 --> 00:00:10.440\nhere or there.\n\n5\n00:00:10.440 --> 00:00:14.720\nI tell you what has worked for us and we've done it a long time and we amped it\n\n6\n00:00:14.720 --> 00:00:15.340\nup during\n\n7\n00:00:15.340 --> 00:00:16.880\nthe depths of COVID.\n\n8\n00:00:16.880 --> 00:00:21.260\nAnd that's a referral bonus because first of all, when an auto-zoner puts their\n\n9\n00:00:21.260 --> 00:00:21.640\nname\n\n10\n00:00:21.640 --> 00:00:25.320\non somebody else, they're going to put their name on if they believe that they\n\n11\n00:00:25.320 --> 00:00:25.840\n're going\n\n12\n00:00:25.840 --> 00:00:27.400\nto be a good auto-zoner.\n\n13\n00:00:27.400 --> 00:00:29.160\nAnd I think that that's really helped us.\n\n14\n00:00:29.160 --> 00:00:34.870\nBut we're still challenged with the labor situation and staffing issues in our\n\n15\n00:00:34.870 --> 00:00:35.480\nstores\n\n16\n00:00:35.480 --> 00:00:39.520\nand distribution centers or in the other parts of the organization.\n\n17\n00:00:39.520 --> 00:00:44.120\nBut we're in much different place today than we were, say, April of this year.\n\n18\n00:00:44.120 --> 00:00:46.280\nEvery leader casts the...\n","pretty_transcript","start_time",1600199,"end_time",1644059,"keywords","Hiring, recruiting, HR, referral, labor, staffing, labor shortage, autozone, automotive","slug","use-referral-bonuses-to-find-great-talent","origin","cms","mux_playback_id","aS2aDiyhRLNP0100ehtIgrhycq023jdGMppa00tO01miridc","mux_asset_id","nOrJ8tCQWpsi79o4lCcUmp33KfyTTpHcJjCN00XagZhs","leader_id",21,"episode_id",168,"updated_at","2025-03-07T15:21:30.000000Z","meta_title","meta_description","og_image_media_id","web_url","https://www.howleaderslead.com/clips/1632/use-referral-bonuses-to-find-great-talent","og_image_url","leader",{"_13":36,"_102":103,"_104":105,"_106":107,"_25":108,"_109":110,"_61":111,"_58":111,"_112":113,"_68":114,"_39":115,"_116":-5,"_41":-5,"_42":-5,"_43":-5,"_117":118,"_90":119,"_44":120,"_121":122,"_123":124,"_46":-5,"_125":126,"_127":128,"_94":129,"_51":-5},"episode",{"_13":38,"_15":52,"_27":53,"_17":-5,"_54":55,"_18":56,"_20":57,"_58":59,"_60":-5,"_61":59,"_62":-5,"_63":64,"_65":66,"_67":-5,"_68":-5,"_69":70,"_71":72,"_73":74,"_35":36,"_39":75,"_41":-5,"_42":-5,"_43":-5,"_76":77,"_78":79,"_80":81,"_82":83,"_84":-5,"_85":-5,"_86":87,"_88":89,"_90":-5,"_46":-5,"_91":92,"_93":-5,"_94":-5,"_51":-5},"og_image_media","Value those you lead","value-those-you-lead","summary","

Today’s guest is Bill Rhodes, the CEO and Executive Chairman of AutoZone.

Get this: AutoZone is one of the only companies around who has grown both their earnings per share AND their revenue EVERY year for the past TWENTY years.

That kind of consistency is just remarkable.

But you won’t hear Bill take the credit for it. For him, it is all about his team and what they can do together.

He’s got this deep and genuine admiration for his people, whom he calls AutoZoners. That respect drives how he makes decisions, implements, finds and trains talent, and more.

When we truly respect those we lead, we see leadership for the privilege it really is. It’s the secret to getting big things done – and to getting the kind of growth we all want to have.

You’ll also learn:

The surprising benefit of a company culture that’s not for everybody
How to grow both a retail and wholesale business
A practical idea to help you find great team members (even in a tough labor market)
What “executive courage” means and how it can change your approach to decisions
How golf helped Bill get his foot in the door at a top accounting firm

Take your learning further. Get proven leadership advice from these (free!) resources:

The How Leaders Lead App: A vast library of 90-second leadership lessons to stay sharp on the go

Daily Insight Emails: One small (but powerful!) leadership principle to focus on each day

Whichever you choose, you can be sure you’ll get the trusted leadership advice you need to advance your career, develop your team, and grow your business.

","WEBVTT\n\n1\n00:00:00.000 --> 00:00:07.710\nWelcome to How Leaders Lead, where every week you get to listen in while I\n\n2\n00:00:07.710 --> 00:00:08.560\ninterview some\n\n3\n00:00:08.560 --> 00:00:10.520\nof the very best leaders in the world.\n\n4\n00:00:10.520 --> 00:00:14.020\nI break down the key learnings so that by the end of the episode, you'll have\n\n5\n00:00:14.020 --> 00:00:14.600\nsomething\n\n6\n00:00:14.600 --> 00:00:18.760\nsimple you can apply as you develop into a better leader.\n\n7\n00:00:18.760 --> 00:00:21.720\nThat's what this podcast is all about.\n\n8\n00:00:21.720 --> 00:00:26.960\nMy guest today is Bill Rhodes, who's been the CEO of AutoZone since 2005.\n\n9\n00:00:26.960 --> 00:00:32.410\nNow, get this, AutoZone is one of the only companies around who has grown both\n\n10\n00:00:32.410 --> 00:00:32.920\ntheir\n\n11\n00:00:32.920 --> 00:00:39.120\nearnings per share and their revenue every year for the past 20 years.\n\n12\n00:00:39.120 --> 00:00:44.560\nBoy, I got to tell you, that kind of consistency is remarkable.\n\n13\n00:00:44.560 --> 00:00:48.280\nNot just remarkable, it's amazingly remarkable.\n\n14\n00:00:48.280 --> 00:00:50.800\nBut there's no way Bill is going to take the credit for it.\n\n15\n00:00:50.800 --> 00:00:54.540\nI don't care how hard you try to get him to do it, it's just not going to\n\n16\n00:00:54.540 --> 00:00:55.240\nhappen.\n\n17\n00:00:55.240 --> 00:00:59.600\nFor him, it's all about his team and what they can do together.\n\n18\n00:00:59.600 --> 00:01:04.870\nHe's got this deep and genuine admiration for his people, who he calls AutoZone\n\n19\n00:01:04.870 --> 00:01:05.400\ners.\n\n20\n00:01:05.400 --> 00:01:09.870\nThat respect drives how he makes decisions, how he implements new ideas, how he\n\n21\n00:01:09.870 --> 00:01:10.160\nfinds\n\n22\n00:01:10.160 --> 00:01:13.440\nand trains talent, and a whole lot more.\n\n23\n00:01:13.440 --> 00:01:17.500\nWhen we truly respect those we lead, we see leadership for the privilege it\n\n24\n00:01:17.500 --> 00:01:18.800\nreally is.\n\n25\n00:01:18.800 --> 00:01:23.040\nIt's the secret to getting big things done and to getting the kind of growth we\n\n26\n00:01:23.040 --> 00:01:23.640\nall want\n\n27\n00:01:23.640 --> 00:01:24.800\nto have.\n\n28\n00:01:24.800 --> 00:01:26.960\nSo hey, let's get right down to it.\n\n29\n00:01:26.960 --> 00:01:37.120\nHere's my conversation with my good friend and soon to be yours, Bill Rhodes.\n\n30\n00:01:37.120 --> 00:01:39.120\nBill is great to have you on the show.\n\n31\n00:01:39.120 --> 00:01:42.680\nSo great to be with you and thank you for the mission of How Leaders Lead.\n\n32\n00:01:42.680 --> 00:01:47.000\nI am a consumer of your program and have enjoyed it thoroughly.\n\n33\n00:01:47.000 --> 00:01:51.870\nIt's a great way to go out on a run and think about something other than the\n\n34\n00:01:51.870 --> 00:01:52.560\npain.\n\n35\n00:01:52.560 --> 00:01:53.560\nThat's great.\n\n36\n00:01:53.560 --> 00:01:57.080\nSo I have to tell you, listen to your voice here.\n\n37\n00:01:57.080 --> 00:01:58.080\nYou're Sam Elliott.\n\n38\n00:01:58.080 --> 00:01:59.080\nYou got the mustache.\n\n39\n00:01:59.080 --> 00:02:00.240\nYou got the beard.\n\n40\n00:02:00.240 --> 00:02:02.440\nYou sound exactly like Sam Elliott.\n\n41\n00:02:02.440 --> 00:02:06.400\nAnd it's all gray and I guess that's why my voice is so raspy.\n\n42\n00:02:06.400 --> 00:02:07.640\nToo many years, David.\n\n43\n00:02:07.640 --> 00:02:08.640\nToo many years.\n\n44\n00:02:08.640 --> 00:02:12.390\nI really can't wait to get into how you lead and talk about the great job that\n\n45\n00:02:12.390 --> 00:02:13.120\nyou've done\n\n46\n00:02:13.120 --> 00:02:14.920\nat the AutoZone.\n\n47\n00:02:14.920 --> 00:02:18.720\nBut first, at the time in this recording, it's the new NBA season.\n\n48\n00:02:18.720 --> 00:02:22.780\nIt's just beginning and as one of the owners of the Memphis Grizzlies, which I\n\n49\n00:02:22.780 --> 00:02:23.320\nknow you\n\n50\n00:02:23.320 --> 00:02:28.000\nare, what's it feel like knowing you get to watch the job, the rent, dunk on\n\n51\n00:02:28.000 --> 00:02:28.520\nall the\n\n52\n00:02:28.520 --> 00:02:30.200\npeople for the next several months?\n\n53\n00:02:30.200 --> 00:02:31.200\nThat's got to be fun.\n\n54\n00:02:31.200 --> 00:02:35.320\nYeah, David, I'm a miniscule owner of the Memphis Grizzlies.\n\n55\n00:02:35.320 --> 00:02:39.630\nBut myself and several other Memphians, when there was an ownership change a\n\n56\n00:02:39.630 --> 00:02:40.240\nnumber of\n\n57\n00:02:40.240 --> 00:02:44.190\nyears ago, almost a decade ago now, all came together to make sure that we\n\n58\n00:02:44.190 --> 00:02:44.920\nsecured the\n\n59\n00:02:44.920 --> 00:02:48.280\nMemphis Grizzlies in our great hometown of Memphis, Tennessee.\n\n60\n00:02:48.280 --> 00:02:51.280\nI've really enjoyed my association with the Grizzlies.\n\n61\n00:02:51.280 --> 00:02:54.520\nJohn Moran is like none other to watch.\n\n62\n00:02:54.520 --> 00:02:57.760\nBut our front office now is really fantastic.\n\n63\n00:02:57.760 --> 00:03:01.560\nHe's got a lot of great players around him and there's nothing.\n\n64\n00:03:01.560 --> 00:03:06.560\nThere is nothing that brings the citizens of Memphis together like the Memphis\n\n65\n00:03:06.560 --> 00:03:07.520\nGrizzlies.\n\n66\n00:03:07.520 --> 00:03:08.520\nThat is great.\n\n67\n00:03:08.520 --> 00:03:09.600\nAnd you had a great run last year.\n\n68\n00:03:09.600 --> 00:03:11.000\nThat team's coming together.\n\n69\n00:03:11.000 --> 00:03:12.160\nSo it'll be a lot of fun.\n\n70\n00:03:12.160 --> 00:03:16.480\nYou know, what did the Grizzlies taught you or reinforced about leadership?\n\n71\n00:03:16.480 --> 00:03:18.400\nJust watching it all unfolds.\n\n72\n00:03:18.400 --> 00:03:21.400\nWe have a couple of leaders of the organization.\n\n73\n00:03:21.400 --> 00:03:24.480\nJason Wexler is the CEO of the Grizzlies.\n\n74\n00:03:24.480 --> 00:03:27.960\nAnd Zach Klimann was the youngest GM of the Grizzlies.\n\n75\n00:03:27.960 --> 00:03:29.680\nAnd these are two non-traditional.\n\n76\n00:03:29.680 --> 00:03:32.600\nThese are not long-term basketball guys.\n\n77\n00:03:32.600 --> 00:03:35.800\nBut they've come in and they've brought innovation.\n\n78\n00:03:35.800 --> 00:03:38.360\nThey've brought data and data analysis.\n\n79\n00:03:38.360 --> 00:03:42.910\nAnd they've made some really great decisions like picking John Moran number two\n\n80\n00:03:42.910 --> 00:03:43.360\nin the\n\n81\n00:03:43.360 --> 00:03:45.920\nNBA draft coming out of Murray State.\n\n82\n00:03:45.920 --> 00:03:46.920\nI'm looking at you.\n\n83\n00:03:46.920 --> 00:03:49.640\nAnd you got your red AutoZone shirt on.\n\n84\n00:03:49.640 --> 00:03:51.320\nYou got your name badge.\n\n85\n00:03:51.320 --> 00:03:54.720\nI'd say you're true blue, but I think you're actually true red.\n\n86\n00:03:54.720 --> 00:03:55.720\nYeah, sure.\n\n87\n00:03:55.720 --> 00:03:57.480\nMy luck leads AutoZone red.\n\n88\n00:03:57.480 --> 00:03:58.480\nIt's Monday.\n\n89\n00:03:58.480 --> 00:04:01.000\nIt's Monday at the Store Support Center.\n\n90\n00:04:01.000 --> 00:04:03.720\nNow listen, I didn't say the headquarters.\n\n91\n00:04:03.720 --> 00:04:05.520\nI didn't say the corporate office.\n\n92\n00:04:05.520 --> 00:04:07.960\nIt's Monday at the Store Support Center.\n\n93\n00:04:07.960 --> 00:04:12.080\nEveryone here's role is how do we best support our stores?\n\n94\n00:04:12.080 --> 00:04:16.330\nWe just finished our four and a half hour executive committee meeting where\n\n95\n00:04:16.330 --> 00:04:16.960\neveryone\n\n96\n00:04:16.960 --> 00:04:22.320\nis dressed just like me and everyone in this building is dressed just like me.\n\n97\n00:04:22.320 --> 00:04:27.060\nOn Mondays, we wear our store uniforms in solidarity with the most important\n\n98\n00:04:27.060 --> 00:04:27.640\npeople in\n\n99\n00:04:27.640 --> 00:04:31.820\nour company, which are the people in our stores and our distribution centers,\n\n100\n00:04:31.820 --> 00:04:32.560\nwho are closer\n\n101\n00:04:32.560 --> 00:04:36.280\nto the customer and taking care of the customer every day.\n\n102\n00:04:36.280 --> 00:04:37.680\nEverybody has recognition pens.\n\n103\n00:04:37.680 --> 00:04:44.240\nAs you know, as a leader, a huge part of leading an organization is recognition\n\n104\n00:04:44.240 --> 00:04:44.320\n.\n\n105\n00:04:44.320 --> 00:04:45.800\nAnd we do it on a regular basis.\n\n106\n00:04:45.800 --> 00:04:50.040\nThe one on my right collar is a shrink buster pen.\n\n107\n00:04:50.040 --> 00:04:53.320\nHow do we control shrink or loss in the company?\n\n108\n00:04:53.320 --> 00:04:57.650\nSomething I earned when I was a divisional vice president back in 2000, I\n\n109\n00:04:57.650 --> 00:04:59.600\nbelieve it was.\n\n110\n00:04:59.600 --> 00:05:03.320\nThe top left on my left hand side is the Lib the Pledge pen.\n\n111\n00:05:03.320 --> 00:05:07.740\nEverybody who goes through their first day of orientation at AutoZone, we call\n\n112\n00:05:07.740 --> 00:05:08.680\nfoundations,\n\n113\n00:05:08.680 --> 00:05:10.400\ngets a Lib the Pledge pen.\n\n114\n00:05:10.400 --> 00:05:15.340\nThey should put it on their uniform or dress code as we call it every single\n\n115\n00:05:15.340 --> 00:05:16.240\nday and have\n\n116\n00:05:16.240 --> 00:05:20.480\na recommitment to living the AutoZone pledge.\n\n117\n00:05:20.480 --> 00:05:22.240\nDo you know the AutoZone pledge, David?\n\n118\n00:05:22.240 --> 00:05:25.480\nWell, no, you tell me, but I think I have an idea of what it is.\n\n119\n00:05:25.480 --> 00:05:30.220\nSo whenever five or more of us are gathered, including my executive committee\n\n120\n00:05:30.220 --> 00:05:30.880\nmeeting at\n\n121\n00:05:30.880 --> 00:05:36.810\n10 o'clock central today, we begin the meeting by all standing up and clapping\n\n122\n00:05:36.810 --> 00:05:37.400\nand then we\n\n123\n00:05:37.400 --> 00:05:38.640\nspell AutoZone.\n\n124\n00:05:38.640 --> 00:05:40.440\nA-U-T-O-Z-O-N-E.\n\n125\n00:05:40.440 --> 00:05:43.920\nWho's the best AutoZone?\n\n126\n00:05:43.920 --> 00:05:44.920\nWho's number one?\n\n127\n00:05:44.920 --> 00:05:45.920\nThe customer.\n\n128\n00:05:45.920 --> 00:05:48.000\nAutoZoneers always put customers first.\n\n129\n00:05:48.000 --> 00:05:49.560\nWe know our parts and products.\n\n130\n00:05:49.560 --> 00:05:51.320\nOur stores look great.\n\n131\n00:05:51.320 --> 00:05:54.200\nWe got the best merchandise at the right price.\n\n132\n00:05:54.200 --> 00:06:00.490\nSo this pen signifies to 112,000 people every morning when they're getting\n\n133\n00:06:00.490 --> 00:06:01.480\ndressed what\n\n134\n00:06:01.480 --> 00:06:03.160\nit means to be an AutoZone.\n\n135\n00:06:03.160 --> 00:06:07.120\nAnd that's to live that pledge that like everything else at AutoZone always\n\n136\n00:06:07.120 --> 00:06:07.800\nstarts with\n\n137\n00:06:07.800 --> 00:06:08.800\nthe customer.\n\n138\n00:06:08.800 --> 00:06:11.610\nWhen I was at Yum, we had a Yum cheer, but you've taken it to a whole different\n\n139\n00:06:11.610 --> 00:06:11.920\nlevel\n\n140\n00:06:11.920 --> 00:06:14.040\nwith that with your pleasure.\n\n141\n00:06:14.040 --> 00:06:15.040\nThat's great.\n\n142\n00:06:15.040 --> 00:06:18.040\nAnd it's a lot of fun to start those meetings with that cheer, isn't it?\n\n143\n00:06:18.040 --> 00:06:19.040\nOh, it's awesome.\n\n144\n00:06:19.040 --> 00:06:21.040\nYou know, it's interesting.\n\n145\n00:06:21.040 --> 00:06:24.920\nIt was not created here, our founder was on the board of Walmart, borrowed a\n\n146\n00:06:24.920 --> 00:06:25.720\nbest practice\n\n147\n00:06:25.720 --> 00:06:27.440\nfrom somebody else.\n\n148\n00:06:27.440 --> 00:06:30.160\nWe do it as well, if not better than anybody else.\n\n149\n00:06:30.160 --> 00:06:34.540\nBut think about being in a meeting setting and how many people come in, some of\n\n150\n00:06:34.540 --> 00:06:34.880\nwhich\n\n151\n00:06:34.880 --> 00:06:39.090\nare late, many of which are at low energy or they're focused on their phone or\n\n152\n00:06:39.090 --> 00:06:39.760\nsomething\n\n153\n00:06:39.760 --> 00:06:40.760\nelse.\n\n154\n00:06:40.760 --> 00:06:44.320\nAnd instead, they have to stop everything that they're doing.\n\n155\n00:06:44.320 --> 00:06:49.770\nStand up, raise the energy level of the entire organization that's in that room\n\n156\n00:06:49.770 --> 00:06:49.800\n.\n\n157\n00:06:49.800 --> 00:06:51.600\nAnd also, you know what?\n\n158\n00:06:51.600 --> 00:06:55.600\nIf you get there after the cheer and pledge, everybody knows you were late.\n\n159\n00:06:55.600 --> 00:06:57.800\nI was going to share one more thing with you.\n\n160\n00:06:57.800 --> 00:06:59.520\nAnd that's this pin.\n\n161\n00:06:59.520 --> 00:07:01.080\nIt's a service pin.\n\n162\n00:07:01.080 --> 00:07:05.300\nEvery AutoZone or from their first anniversary on gets recognized for their\n\n163\n00:07:05.300 --> 00:07:06.320\nyears of service.\n\n164\n00:07:06.320 --> 00:07:09.690\nAnd, you know, in today's society, many people say people won't stay with\n\n165\n00:07:09.690 --> 00:07:10.520\norganizations\n\n166\n00:07:10.520 --> 00:07:11.520\na long time.\n\n167\n00:07:11.520 --> 00:07:16.880\nYou'll notice my pin is a 27-year pin and about six weeks I'll be celebrating\n\n168\n00:07:16.880 --> 00:07:17.720\nmy 28th\n\n169\n00:07:17.720 --> 00:07:19.200\nanniversary with AutoZone.\n\n170\n00:07:19.200 --> 00:07:21.680\nHere's a crazy statistic.\n\n171\n00:07:21.680 --> 00:07:26.160\nWe have our CEO team, which is the vice president of the organization.\n\n172\n00:07:26.160 --> 00:07:33.960\nAs of today, I rank 18th out of 63 people in tenure at almost 28 years.\n\n173\n00:07:33.960 --> 00:07:36.000\nI got to ask you, how do you do that?\n\n174\n00:07:36.000 --> 00:07:38.200\nI mean, nobody has that kind of tenure.\n\n175\n00:07:38.200 --> 00:07:40.000\nI think it's the AutoZone culture.\n\n176\n00:07:40.000 --> 00:07:43.080\nFirst of all, I think we're incredibly selective of people.\n\n177\n00:07:43.080 --> 00:07:49.410\nI have a saying that AutoZone is not right for everybody and everybody is not\n\n178\n00:07:49.410 --> 00:07:50.160\nright for\n\n179\n00:07:50.160 --> 00:07:51.440\nAutoZone.\n\n180\n00:07:51.440 --> 00:07:53.600\nAnd that's okay.\n\n181\n00:07:53.600 --> 00:07:54.920\nWe're pretty unique.\n\n182\n00:07:54.920 --> 00:07:57.240\nHow many people feel comfortable doing a cheer and a pledge?\n\n183\n00:07:57.240 --> 00:08:00.120\nHow many people feel comfortable wearing the uniform?\n\n184\n00:08:00.120 --> 00:08:05.120\nHow many people want to get as passionate as we do about our business?\n\n185\n00:08:05.120 --> 00:08:09.140\nAnd if they're not that kind of person, if they're not competitive, they don't\n\n186\n00:08:09.140 --> 00:08:09.440\nlike\n\n187\n00:08:09.440 --> 00:08:10.440\nto win.\n\n188\n00:08:10.440 --> 00:08:12.800\nThey need to go somewhere else because this wouldn't be the place for them.\n\n189\n00:08:12.800 --> 00:08:16.240\nI got to ask you, how did you first get introduced to AutoZone?\n\n190\n00:08:16.240 --> 00:08:17.240\nGreat story.\n\n191\n00:08:17.240 --> 00:08:21.180\nSo I was a CPA coming out of college, went to grad school at the University of\n\n192\n00:08:21.180 --> 00:08:21.760\nMemphis\n\n193\n00:08:21.760 --> 00:08:23.360\nand got an MBA.\n\n194\n00:08:23.360 --> 00:08:27.390\nAnd from there, I was recruited to Ernst & Young to be an intern that ended up\n\n195\n00:08:27.390 --> 00:08:28.040\nresulting\n\n196\n00:08:28.040 --> 00:08:29.800\nin a full-time job.\n\n197\n00:08:29.800 --> 00:08:34.070\nBut I was with Ernst & Young, Ernst & Wendy Ernst & Young for about six and a\n\n198\n00:08:34.070 --> 00:08:35.040\nhalf years.\n\n199\n00:08:35.040 --> 00:08:42.080\nThe first client that I ever worked on at E&W at the time was Malone and Hyde.\n\n200\n00:08:42.080 --> 00:08:46.940\nAnd it was the divestiture of Malone and Hyde, which was the parent company of\n\n201\n00:08:46.940 --> 00:08:47.880\nAutoZone.\n\n202\n00:08:47.880 --> 00:08:51.480\nSo I worked on that originally, then went away for about a year.\n\n203\n00:08:51.480 --> 00:08:57.450\nAnd in preparation for AutoZone's initial public offering in 1991, I came on\n\n204\n00:08:57.450 --> 00:08:57.680\nmaybe a\n\n205\n00:08:57.680 --> 00:09:01.000\ncouple of years before that and worked on the AutoZone account.\n\n206\n00:09:01.000 --> 00:09:03.000\nSo I spent five years or so.\n\n207\n00:09:03.000 --> 00:09:06.560\nI would spend three or four months a year at AutoZone.\n\n208\n00:09:06.560 --> 00:09:10.080\nAnd it's in my hometown of Memphis, Tennessee.\n\n209\n00:09:10.080 --> 00:09:12.040\nAnd I liked the culture.\n\n210\n00:09:12.040 --> 00:09:14.680\nI loved the competitiveness of the culture.\n\n211\n00:09:14.680 --> 00:09:18.910\nI liked the fact that I didn't have to wear a tie to work every day like I did\n\n212\n00:09:18.910 --> 00:09:19.240\nat E&W.\n\n213\n00:09:19.240 --> 00:09:20.480\nI loved the people.\n\n214\n00:09:20.480 --> 00:09:24.300\nI looked at the business model and saw how successful the business model and\n\n215\n00:09:24.300 --> 00:09:25.440\nhow sustainable it\n\n216\n00:09:25.440 --> 00:09:26.440\nwas.\n\n217\n00:09:26.440 --> 00:09:32.210\nAnd so December of 1994, I was asked to come to AutoZone as the manager of\n\n218\n00:09:32.210 --> 00:09:34.040\ninventory accounting.\n\n219\n00:09:34.040 --> 00:09:38.120\nAnd I had five people on my team and the rest, as they say, is history.\n\n220\n00:09:38.120 --> 00:09:39.720\nWho did you interview with, Bill?\n\n221\n00:09:39.720 --> 00:09:41.000\nI interviewed with three people.\n\n222\n00:09:41.000 --> 00:09:45.480\nI interviewed with the chief financial officer, got him Chuck Bell, who was\n\n223\n00:09:45.480 --> 00:09:46.840\nalso an E&W alumni.\n\n224\n00:09:46.840 --> 00:09:50.640\nAnd I interviewed with the guy that was going to be my new boss, Richard Adams.\n\n225\n00:09:50.640 --> 00:09:54.660\nAnd then the last interview that I had was with a gentleman by the name of Pitt\n\n226\n00:09:54.660 --> 00:09:54.880\nHyde.\n\n227\n00:09:54.880 --> 00:09:59.920\nAnd Pitt Hyde was the founder of AutoZone, who I had never met before until\n\n228\n00:09:59.920 --> 00:10:00.680\nmaybe six\n\n229\n00:10:00.680 --> 00:10:03.320\nweeks before this whole interview process.\n\n230\n00:10:03.320 --> 00:10:09.320\nAnd for the last 28 years, Pitt has been a huge mentor.\n\n231\n00:10:09.320 --> 00:10:13.060\nPitt and his wife Barbara are mine and my wife's Amy, still an anthropic\n\n232\n00:10:13.060 --> 00:10:13.800\nmentors.\n\n233\n00:10:13.800 --> 00:10:18.570\nAnd he's a dear friend and certainly a confidant to help me think through some\n\n234\n00:10:18.570 --> 00:10:19.360\nthings from\n\n235\n00:10:19.360 --> 00:10:20.360\ntime to time.\n\n236\n00:10:20.360 --> 00:10:23.920\nDid Pitt give any coaching when you had that interview with him?\n\n237\n00:10:23.920 --> 00:10:25.240\nHe didn't give me coaching.\n\n238\n00:10:25.240 --> 00:10:28.200\nBut at the end of the interview, he allowed me to ask him three questions.\n\n239\n00:10:28.200 --> 00:10:30.000\nOr he said, would you have any questions?\n\n240\n00:10:30.000 --> 00:10:33.240\nI said, yes, sir, do you know where my office is going to be?\n\n241\n00:10:33.240 --> 00:10:36.470\nAnd he said, no, son, you won't have an office, but we really don't know\n\n242\n00:10:36.470 --> 00:10:37.320\nexactly what you're\n\n243\n00:10:37.320 --> 00:10:38.600\ngoing to do yet.\n\n244\n00:10:38.600 --> 00:10:40.480\nSo we don't know where your cubicle will be.\n\n245\n00:10:40.480 --> 00:10:41.960\nHe said, well, anything else.\n\n246\n00:10:41.960 --> 00:10:45.120\nI said, yes, sir, do you know what my title will be?\n\n247\n00:10:45.120 --> 00:10:47.960\nAnd he said, no, we don't know what your title will be.\n\n248\n00:10:47.960 --> 00:10:49.120\nWe're still trying to figure it out.\n\n249\n00:10:49.120 --> 00:10:51.760\nWe're trying to enhance the finance and accounting staff.\n\n250\n00:10:51.760 --> 00:10:53.760\nWe think you'd make a good addition.\n\n251\n00:10:53.760 --> 00:10:55.280\nI said, OK, he said, anything else.\n\n252\n00:10:55.280 --> 00:10:58.840\nI said, yes, sir, how much money am I going to make?\n\n253\n00:10:58.840 --> 00:11:03.600\nAnd he said, son, you're way too into the details.\n\n254\n00:11:03.600 --> 00:11:06.160\nYou need to decide if you want to be an AutoZoneer.\n\n255\n00:11:06.160 --> 00:11:09.280\nAnd if you do, everything else will take care of itself.\n\n256\n00:11:09.280 --> 00:11:13.200\nAnd boy, no truer words were ever spoken about.\n\n257\n00:11:13.200 --> 00:11:14.600\nI love it.\n\n258\n00:11:14.600 --> 00:11:20.760\nAnd then at age 39, you've become the youngest Fortune 500 CEO.\n\n259\n00:11:20.760 --> 00:11:23.600\nTell us the story of when you got that news.\n\n260\n00:11:23.600 --> 00:11:25.000\nWell, what an interesting time.\n\n261\n00:11:25.000 --> 00:11:27.280\nSo back up just a little bit.\n\n262\n00:11:27.280 --> 00:11:29.800\nIt was the week after spring break.\n\n263\n00:11:29.800 --> 00:11:32.200\nAnd I'd been on a skiing trip with my family\n\n264\n00:11:32.200 --> 00:11:35.320\nand had a bad skiing accident on Wednesday.\n\n265\n00:11:35.320 --> 00:11:37.960\nIt's been all day Thursday in the hospital.\n\n266\n00:11:37.960 --> 00:11:41.040\nWith a severe concussion, we ended up coming home\n\n267\n00:11:41.040 --> 00:11:43.360\nso that I could get some rest.\n\n268\n00:11:43.360 --> 00:11:46.400\nAnd I started finding out on Friday night--\n\n269\n00:11:46.400 --> 00:11:49.400\nsorry, Saturday night-- that I may need to come back to Memphis\n\n270\n00:11:49.400 --> 00:11:52.080\nbecause something was going on, but I didn't know.\n\n271\n00:11:52.080 --> 00:11:54.840\nSo I got up Sunday morning and got ready to go do whatever\n\n272\n00:11:54.840 --> 00:11:55.480\nI needed to do.\n\n273\n00:11:55.480 --> 00:11:56.400\nThere was some discussion.\n\n274\n00:11:56.400 --> 00:11:59.920\nI might need to go to New York that day, whatever.\n\n275\n00:11:59.920 --> 00:12:01.400\nI got up at about 5 o'clock.\n\n276\n00:12:01.400 --> 00:12:04.280\nI was ready to go to work, do whatever I needed to do.\n\n277\n00:12:04.280 --> 00:12:05.520\nBut they kept ticking on.\n\n278\n00:12:05.520 --> 00:12:07.440\nSo finally, I said, well, I'm going to go to church.\n\n279\n00:12:07.440 --> 00:12:10.480\nI went to church with my family, had a quick lunch,\n\n280\n00:12:10.480 --> 00:12:12.280\nand came back home and was waiting.\n\n281\n00:12:12.280 --> 00:12:14.800\nAt about 4 o'clock that afternoon, our founder called me.\n\n282\n00:12:14.800 --> 00:12:19.480\nOur CEO, the pre-seeded me, had decided\n\n283\n00:12:19.480 --> 00:12:22.720\nto go to Office Depot as the chairman and CEO.\n\n284\n00:12:22.720 --> 00:12:25.200\nAnd the board had met that weekend,\n\n285\n00:12:25.200 --> 00:12:26.440\nkind of on a surprise thing.\n\n286\n00:12:26.440 --> 00:12:29.840\nAnd it selected me to be the president and CEO.\n\n287\n00:12:29.840 --> 00:12:32.240\nAnd our founder, who was the one that called me at 4 o'clock\n\n288\n00:12:32.240 --> 00:12:34.240\non Sunday afternoon, they decided\n\n289\n00:12:34.240 --> 00:12:37.120\nthat he would come back as the chairman of the board\n\n290\n00:12:37.120 --> 00:12:38.840\non an interim basis.\n\n291\n00:12:38.840 --> 00:12:41.120\nAnd so it was very fortunate for me\n\n292\n00:12:41.120 --> 00:12:43.920\nthat here's this mentor of mine that's going to come back\n\n293\n00:12:43.920 --> 00:12:47.800\nand help me through this massive change.\n\n294\n00:12:47.800 --> 00:12:49.120\nBut that's how I found out.\n\n295\n00:12:49.120 --> 00:12:50.840\nWow, that's a great story.\n\n296\n00:12:50.840 --> 00:12:54.320\nDid you feel any pressure, Bill, being so young?\n\n297\n00:12:54.320 --> 00:12:57.040\nOr were you old enough to even know the difference?\n\n298\n00:12:57.040 --> 00:12:59.200\nAs you can see, David and others can't.\n\n299\n00:12:59.200 --> 00:13:01.800\nI always looked so much older than I was,\n\n300\n00:13:01.800 --> 00:13:04.920\nthat frankly, in all candor, it was a benefit to me,\n\n301\n00:13:04.920 --> 00:13:08.080\nwhether I was at Ernst & Young or at AutoZone.\n\n302\n00:13:08.080 --> 00:13:11.280\nI might have looked 10 or 15 years older than I was.\n\n303\n00:13:11.280 --> 00:13:14.000\nAnd it was funny, we went to this party\n\n304\n00:13:14.000 --> 00:13:17.040\nof retirement celebration or departure celebration\n\n305\n00:13:17.040 --> 00:13:18.520\nfor the previous CEO.\n\n306\n00:13:18.520 --> 00:13:21.760\nI went with Pitt and he looked around, he said,\n\n307\n00:13:21.760 --> 00:13:24.400\n\"I'm so tired of people asking me what I'm doing,\n\n308\n00:13:24.400 --> 00:13:26.880\nputting a 39 year old in the road.\"\n\n309\n00:13:26.880 --> 00:13:28.680\nAnd he said, \"What they don't realize\n\n310\n00:13:28.680 --> 00:13:32.680\nwas I became the CEO, Pitt became the CEO\n\n311\n00:13:32.680 --> 00:13:36.120\nof Malone and Hyde, his grandfather's company,\n\n312\n00:13:36.120 --> 00:13:40.760\na New York Stock Exchange Company at the age of 26.\n\n313\n00:13:40.760 --> 00:13:45.000\nHe was the youngest ever CEO of a New York Stock Exchange\n\n314\n00:13:45.000 --> 00:13:47.320\nCompany at the time for years.\n\n315\n00:13:47.320 --> 00:13:52.000\nHe had confidence in me and that certainly helped.\n\n316\n00:13:52.000 --> 00:13:54.960\nAnd I would say age never played a part for me,\n\n317\n00:13:54.960 --> 00:13:57.880\nbut our business was in tough spot at the time.\n\n318\n00:13:57.880 --> 00:14:01.440\nWe announced simultaneously with me becoming the CEO\n\n319\n00:14:01.440 --> 00:14:04.560\nand Pitt coming back that our same store sales\n\n320\n00:14:04.560 --> 00:14:07.000\nwere down 7%.\n\n321\n00:14:07.000 --> 00:14:07.920\nYou know what that means.\n\n322\n00:14:07.920 --> 00:14:09.240\n- That's not good.\n\n323\n00:14:09.240 --> 00:14:12.560\n- We ended the quarter down 5%, the worst performance\n\n324\n00:14:12.560 --> 00:14:14.120\nin the company's history.\n\n325\n00:14:14.120 --> 00:14:16.720\nSo I was scared, but it wasn't because of my age.\n\n326\n00:14:16.720 --> 00:14:21.400\n- You joined the company as a CEO in 2005.\n\n327\n00:14:21.400 --> 00:14:25.320\nTalk about the business that you inherited when you were CEO\n\n328\n00:14:25.320 --> 00:14:26.840\nand what you're leading today.\n\n329\n00:14:26.840 --> 00:14:28.400\nJust give us a little snapshot.\n\n330\n00:14:28.400 --> 00:14:31.680\n- I'd been at the company for 10 years and four months.\n\n331\n00:14:31.680 --> 00:14:35.000\nI've been around the company for 15 and a half years or so.\n\n332\n00:14:35.000 --> 00:14:38.160\nSo it was a company that I knew very, very well.\n\n333\n00:14:38.160 --> 00:14:39.880\nBut we were going through a tough spot.\n\n334\n00:14:39.880 --> 00:14:41.040\nWe'd made some changes.\n\n335\n00:14:41.040 --> 00:14:42.040\nA lot of them worked.\n\n336\n00:14:42.040 --> 00:14:44.560\nSome of them didn't, just like always.\n\n337\n00:14:44.560 --> 00:14:47.400\nBut we were in a spot where we were underperforming\n\n338\n00:14:47.400 --> 00:14:51.080\nin a pretty significant way when I became the CEO,\n\n339\n00:14:51.080 --> 00:14:53.320\nwhich was frankly very fortunate\n\n340\n00:14:53.320 --> 00:14:56.600\nbecause it allowed this new team,\n\n341\n00:14:56.600 --> 00:15:00.360\nthe executive committee at the time to come together\n\n342\n00:15:00.360 --> 00:15:03.680\nand really say, what is working, what's not working,\n\n343\n00:15:03.680 --> 00:15:04.960\nwhat needs to be tweaked.\n\n344\n00:15:04.960 --> 00:15:07.920\nAnd within a matter of a couple of months,\n\n345\n00:15:07.920 --> 00:15:12.800\nthe new team had come together and put together a new strategy.\n\n346\n00:15:12.800 --> 00:15:15.440\nNow, it could have very easily been marketed as\n\n347\n00:15:15.440 --> 00:15:17.200\nback to the basics.\n\n348\n00:15:17.200 --> 00:15:19.760\nBut as you know, if you want to inspire people,\n\n349\n00:15:19.760 --> 00:15:22.200\nyou don't talk about going back to anything.\n\n350\n00:15:22.200 --> 00:15:25.320\nSo we coined it, Live the Pledge.\n\n351\n00:15:25.320 --> 00:15:27.160\nThat pledge I shared with you earlier,\n\n352\n00:15:27.160 --> 00:15:30.760\nthis pin was a product of that strategy.\n\n353\n00:15:30.760 --> 00:15:33.800\nAnd so we came to our big national sales meeting and said,\n\n354\n00:15:33.800 --> 00:15:36.560\nlook folks, here are the things we're going to do.\n\n355\n00:15:36.560 --> 00:15:40.560\nAnd they were very simple basics of this business.\n\n356\n00:15:40.560 --> 00:15:45.240\nBut they left the room and left the meeting with a level of confidence,\n\n357\n00:15:45.240 --> 00:15:47.600\nconfidence that they could go make it happen.\n\n358\n00:15:47.600 --> 00:15:53.400\nBecause as our founders father said, no individual builds a business.\n\n359\n00:15:53.400 --> 00:15:58.280\nThe individual builds an organization and the organization builds a business.\n\n360\n00:15:58.280 --> 00:16:02.040\nAnd we had to motivate and inspire and engage and get people excited\n\n361\n00:16:02.040 --> 00:16:04.160\nabout what we could do together.\n\n362\n00:16:04.160 --> 00:16:07.160\nAnd it certainly wasn't a quick turnaround.\n\n363\n00:16:07.160 --> 00:16:11.040\nWe quickly stabilized the sales of the organization.\n\n364\n00:16:11.040 --> 00:16:16.120\nBut it was about three more years before we really saw some significant growth.\n\n365\n00:16:16.120 --> 00:16:18.120\nWhat's the scope of your company today?\n\n366\n00:16:18.120 --> 00:16:22.720\nToday, we will pass 7,000 locations, stores.\n\n367\n00:16:22.720 --> 00:16:30.400\nThe majority of them, about 6250 are in the US, a little over 700 in Mexico and\n\n368\n00:16:30.400 --> 00:16:32.120\n70 in Brazil.\n\n369\n00:16:32.120 --> 00:16:34.280\nWe have 112,000 people.\n\n370\n00:16:34.280 --> 00:16:37.240\nWe don't call them employees because they're special.\n\n371\n00:16:37.240 --> 00:16:38.920\nWe call them auto-zoners.\n\n372\n00:16:38.920 --> 00:16:41.040\nWe just finished our fiscal year at the end of August.\n\n373\n00:16:41.040 --> 00:16:44.480\nWe did $16.3 billion in sales.\n\n374\n00:16:44.480 --> 00:16:49.680\nWe made about $3.2 billion, $3.3 billion in EBIT or operating profit.\n\n375\n00:16:49.680 --> 00:16:56.020\nIt's a terrific business model in a great industry with the most fabulous\n\n376\n00:16:56.020 --> 00:16:57.280\npeople executing it.\n\n377\n00:16:57.280 --> 00:17:00.360\nAnd you have a great retail and commercial business.\n\n378\n00:17:00.360 --> 00:17:03.800\nAnd how do you think about the growth of each business\n\n379\n00:17:03.800 --> 00:17:08.120\nand how have you structured the company to attack both those opportunities?\n\n380\n00:17:08.120 --> 00:17:12.880\nThe company started on July 4, 1979.\n\n381\n00:17:12.880 --> 00:17:16.200\nThe most American company on the most American day.\n\n382\n00:17:16.200 --> 00:17:18.560\nBut we started on as a retailer.\n\n383\n00:17:18.560 --> 00:17:21.720\nSo our founder was in the wholesale grocery business.\n\n384\n00:17:21.720 --> 00:17:26.480\nSo think of being the supply chain for the independent grocers in the '70s.\n\n385\n00:17:26.480 --> 00:17:29.720\nAnd Pitt saw that that future probably wasn't very bright.\n\n386\n00:17:29.720 --> 00:17:31.720\nSo he diversified the organization.\n\n387\n00:17:31.720 --> 00:17:35.840\nHe got into drug distribution, running some grocery stores,\n\n388\n00:17:35.840 --> 00:17:40.000\ngot into sporting goods retailing, got into drug store retailing.\n\n389\n00:17:40.000 --> 00:17:43.800\nSeveral different things, and the last one that they got in was auto parts.\n\n390\n00:17:43.800 --> 00:17:45.960\nBut solely as a retailer.\n\n391\n00:17:45.960 --> 00:17:49.920\nFast forward 17 years to 1996.\n\n392\n00:17:49.920 --> 00:17:52.440\nAnd they said, look, we're servicing part of the market.\n\n393\n00:17:52.440 --> 00:17:55.400\nAnd frankly, the smaller part of the market.\n\n394\n00:17:55.400 --> 00:17:58.640\nWhy don't we open it up a lot of the same inventory?\n\n395\n00:17:58.640 --> 00:18:02.480\nThe same stores can be distribution points for the commercial market.\n\n396\n00:18:02.480 --> 00:18:05.800\nSo in 1996, we started the commercial business.\n\n397\n00:18:05.800 --> 00:18:11.010\nI just mentioned that we finished the last fiscal year with $16 billion in\n\n398\n00:18:11.010 --> 00:18:11.480\nsales.\n\n399\n00:18:11.480 --> 00:18:15.160\nThe majority of it was in US retail.\n\n400\n00:18:15.160 --> 00:18:20.280\nBut about 40% now, $4 billion a year is in our wholesale business.\n\n401\n00:18:20.280 --> 00:18:24.640\nOur US retail business is our most important strategic priority.\n\n402\n00:18:24.640 --> 00:18:29.240\nOur commercial business is our greatest growth opportunity in the mid to long\n\n403\n00:18:29.240 --> 00:18:29.600\nterm.\n\n404\n00:18:29.600 --> 00:18:34.280\nAnd then we have an international strategy today that is about Mexico and now\n\n405\n00:18:34.280 --> 00:18:35.240\nBrazil.\n\n406\n00:18:35.240 --> 00:18:40.640\nYou have 112,000 team members, and you say those 112,000 people are not\n\n407\n00:18:40.640 --> 00:18:41.440\nemployees.\n\n408\n00:18:41.440 --> 00:18:42.920\nThey're auto zoners.\n\n409\n00:18:42.920 --> 00:18:44.720\nYou obviously have a lot of pride in that.\n\n410\n00:18:44.720 --> 00:18:49.740\nAnd one of the things that I noticed about you, Bill, we both were at a golf\n\n411\n00:18:49.740 --> 00:18:50.160\nouting.\n\n412\n00:18:50.160 --> 00:18:53.880\nAnd there are a lot of very good golfers, fun guys around.\n\n413\n00:18:53.880 --> 00:18:58.400\nBut I noticed you spent, I would say almost as much time talking to the staff.\n\n414\n00:18:58.400 --> 00:19:00.720\nI mean, you're really into the front line.\n\n415\n00:19:00.720 --> 00:19:03.760\nI mean, where did that get into your DNA?\n\n416\n00:19:03.760 --> 00:19:08.400\nI say first started with my mom and dad, who I learned all my values from.\n\n417\n00:19:08.400 --> 00:19:11.680\nBut my dad was a regional manager for TerminX.\n\n418\n00:19:11.680 --> 00:19:13.120\nHe was always a people person.\n\n419\n00:19:13.120 --> 00:19:15.160\nMy dad wanted to be a coach.\n\n420\n00:19:15.160 --> 00:19:17.800\nHe played sports and high school and college.\n\n421\n00:19:17.800 --> 00:19:19.440\nAnd he always wanted to be a coach.\n\n422\n00:19:19.440 --> 00:19:24.600\nHe ended up being a coach, but doing pest control instead of being on fields.\n\n423\n00:19:24.600 --> 00:19:27.680\nAnd then I would also say auto zone has taught me that.\n\n424\n00:19:27.680 --> 00:19:33.720\nAuto zone, we can't be successful at auto zone without every single person\n\n425\n00:19:33.720 --> 00:19:37.400\non our team, every single auto zone are being engaged.\n\n426\n00:19:37.400 --> 00:19:41.320\nAnd when I think about some of the unspoken values at auto zone,\n\n427\n00:19:41.320 --> 00:19:44.120\nthere are two that I think are at the forefront.\n\n428\n00:19:44.120 --> 00:19:45.600\nOne is humility.\n\n429\n00:19:45.600 --> 00:19:47.280\nThe other one is empathy.\n\n430\n00:19:47.280 --> 00:19:51.120\nBut we ask our people to do every single day.\n\n431\n00:19:51.120 --> 00:19:53.720\nYou think about most sectors of retail.\n\n432\n00:19:53.720 --> 00:19:57.870\nPeople are walking in the store because they want to buy some Kentucky fried\n\n433\n00:19:57.870 --> 00:19:58.640\nchicken.\n\n434\n00:19:58.640 --> 00:20:00.680\nAre they want to buy taco?\n\n435\n00:20:00.680 --> 00:20:04.840\nAre they want to go to Best Buy and Buy TV that they've been saving up for?\n\n436\n00:20:04.840 --> 00:20:08.440\nAt auto zone, they're walking in the store many times because they got up that\n\n437\n00:20:08.440 --> 00:20:08.720\nmorning\n\n438\n00:20:08.720 --> 00:20:12.720\non their way to work and their car won't start.\n\n439\n00:20:12.720 --> 00:20:17.240\nAnd they're going to have to spend 100, 150 dollars that they didn't plan on\n\n440\n00:20:17.240 --> 00:20:18.640\nspending.\n\n441\n00:20:18.640 --> 00:20:23.400\nAnd our auto zoners are at that pain point for the customer.\n\n442\n00:20:23.400 --> 00:20:26.080\nAnd they're there to solve that problem.\n\n443\n00:20:26.080 --> 00:20:31.540\nAnd so I've learned forever that if you really want to understand what's\n\n444\n00:20:31.540 --> 00:20:32.680\nmissing in a business\n\n445\n00:20:32.680 --> 00:20:37.480\nor what we need to improve, you go straight to the front lines and you deal\n\n446\n00:20:37.480 --> 00:20:38.120\nwith the people\n\n447\n00:20:38.120 --> 00:20:40.440\nthat are dealing with a customer every day.\n\n448\n00:20:40.440 --> 00:20:42.080\nThey know Best.\n\n449\n00:20:42.080 --> 00:20:46.160\nAnd then I just have tremendous respect for what they do.\n\n450\n00:20:46.160 --> 00:20:48.640\nAnd frankly, they're just wonderful people.\n\n451\n00:20:48.640 --> 00:20:52.360\nAnd I love to be around them, whether that's in an auto zone store or at that\n\n452\n00:20:52.360 --> 00:20:52.760\nevent you\n\n453\n00:20:52.760 --> 00:20:53.840\nwere talking about.\n\n454\n00:20:53.840 --> 00:21:01.780\nWe'll be back with the rest of my conversation with Bill Rhodes in just a\n\n455\n00:21:01.780 --> 00:21:03.040\nmoment.\n\n456\n00:21:03.040 --> 00:21:07.240\nYou know, there are some leaders like Bill who are so good at building teams.\n\n457\n00:21:07.240 --> 00:21:11.770\nWhen they talk, you can just hear how much they care about the people they lead\n\n458\n00:21:11.770 --> 00:21:11.880\n.\n\n459\n00:21:11.880 --> 00:21:15.670\nThat comes through loud and clear in my conversation with John Caliperi, head\n\n460\n00:21:15.670 --> 00:21:16.640\nbasketball coach\n\n461\n00:21:16.640 --> 00:21:18.280\nat the University of Kentucky.\n\n462\n00:21:18.280 --> 00:21:22.800\nI'm trying to teach them that you're going to come across fame and fortune.\n\n463\n00:21:22.800 --> 00:21:24.840\nThe question is, what are you going to do with it?\n\n464\n00:21:24.840 --> 00:21:27.680\nDo you know how to build joy within you?\n\n465\n00:21:27.680 --> 00:21:29.000\nIt's what you do for somebody else.\n\n466\n00:21:29.000 --> 00:21:32.240\nIt's not what you're gathering or what you're dragging in.\n\n467\n00:21:32.240 --> 00:21:37.880\nAnd so part of our pillars of what we want to do in our culture is that it's\n\n468\n00:21:37.880 --> 00:21:38.560\nnot about\n\n469\n00:21:38.560 --> 00:21:40.440\nwinning basketball games.\n\n470\n00:21:40.440 --> 00:21:43.520\nIf we take care of everything else, we'll win our basketball games.\n\n471\n00:21:43.520 --> 00:21:48.740\nWell, the chance if we love on them and they love on each other, well, the\n\n472\n00:21:48.740 --> 00:21:49.560\nchance to win\n\n473\n00:21:49.560 --> 00:21:51.120\nthe national title.\n\n474\n00:21:51.120 --> 00:21:55.180\nIf you want to elevate your team and help them be at their best, go listen to\n\n475\n00:21:55.180 --> 00:21:56.240\nmy conversation\n\n476\n00:21:56.240 --> 00:22:06.960\nwith Coach Cal, episode 22 here on How Leaders Lead.\n\n477\n00:22:06.960 --> 00:22:12.290\nYou talk about empathy and humility as a couple of your core values for your\n\n478\n00:22:12.290 --> 00:22:13.160\npeople.\n\n479\n00:22:13.160 --> 00:22:16.480\nIs that what you describe to be an auto-zoner?\n\n480\n00:22:16.480 --> 00:22:19.520\nWhat is an auto-zoner versus a typical employee?\n\n481\n00:22:19.520 --> 00:22:21.720\nI think an auto-zoner is a problem solver.\n\n482\n00:22:21.720 --> 00:22:26.340\nIf somebody walks into our store, particularly on the retail side, and they say\n\n483\n00:22:26.340 --> 00:22:27.360\n, \"My car sounds\n\n484\n00:22:27.360 --> 00:22:32.240\nlike my car smells like my car is shaking.\n\n485\n00:22:32.240 --> 00:22:38.340\nI've got whatever the issue is and our people take the time to listen to the\n\n486\n00:22:38.340 --> 00:22:39.440\ncustomer and\n\n487\n00:22:39.440 --> 00:22:41.960\nunderstand what exactly is the problem.\n\n488\n00:22:41.960 --> 00:22:46.000\nThen we begin to try to or they begin to try to isolate where the problem is.\n\n489\n00:22:46.000 --> 00:22:50.870\nWe take a fixed finder and put it in your OBD2 port and find out that you've\n\n490\n00:22:50.870 --> 00:22:51.680\ngot a problem\n\n491\n00:22:51.680 --> 00:22:54.200\nwith your downstream O2 sensor.\n\n492\n00:22:54.200 --> 00:22:56.760\nThey're problem solvers and I just love it.\n\n493\n00:22:56.760 --> 00:23:01.200\nI also understand that you have a practice at AutoZone called Gotcha.\n\n494\n00:23:01.200 --> 00:23:04.040\nTell me about it and share a story that brings it to life.\n\n495\n00:23:04.040 --> 00:23:06.280\nGo out to the customer's automobile.\n\n496\n00:23:06.280 --> 00:23:07.400\nThat's what it stands for.\n\n497\n00:23:07.400 --> 00:23:13.370\nYou can walk into an auto-zone store and you can say, \"Hey, my car is doing\n\n498\n00:23:13.370 --> 00:23:14.280\nthis.\"\n\n499\n00:23:14.280 --> 00:23:20.380\nWe encourage and incentivize our folks to go out of the store and go to the car\n\n500\n00:23:20.380 --> 00:23:20.800\n.\n\n501\n00:23:20.800 --> 00:23:22.720\nThat's where the problem is.\n\n502\n00:23:22.720 --> 00:23:25.500\nYou can open the hood and you can look and see, \"Oh, my goodness, they think\n\n503\n00:23:25.500 --> 00:23:25.960\nthey have\n\n504\n00:23:25.960 --> 00:23:26.960\na bad battery.\n\n505\n00:23:26.960 --> 00:23:28.520\nThey don't have a bad battery.\n\n506\n00:23:28.520 --> 00:23:30.920\nThey got corrosion on their terminals.\"\n\n507\n00:23:30.920 --> 00:23:37.060\nWe need to take the terminals off, clean the post, put some felt washers on\n\n508\n00:23:37.060 --> 00:23:37.440\nthere, put\n\n509\n00:23:37.440 --> 00:23:39.480\nit back together, and there they go.\n\n510\n00:23:39.480 --> 00:23:44.160\nThey may have spent $3 when they thought they were going to spend $150.\n\n511\n00:23:44.160 --> 00:23:46.520\nThat's what Gotcha is.\n\n512\n00:23:46.520 --> 00:23:50.480\nEverybody you have coming to CU is not really looking forward to it.\n\n513\n00:23:50.480 --> 00:23:52.360\nThat's really a great point.\n\n514\n00:23:52.360 --> 00:23:55.600\nHow have you really trained people on that notion?\n\n515\n00:23:55.600 --> 00:23:58.530\nYou've talked about a couple of things, but that is a very different\n\n516\n00:23:58.530 --> 00:23:59.720\norientation than most\n\n517\n00:23:59.720 --> 00:24:01.480\npeople would have with their customers.\n\n518\n00:24:01.480 --> 00:24:05.010\nThere are certainly people that come into our stores that are excited about\n\n519\n00:24:05.010 --> 00:24:05.800\naccessorizing\n\n520\n00:24:05.800 --> 00:24:10.200\ntheir store, but that's less than 20% of our business.\n\n521\n00:24:10.200 --> 00:24:15.220\nFor 80% of our businesses, either failure, water pump, starter, alternator,\n\n522\n00:24:15.220 --> 00:24:15.880\nbattery,\n\n523\n00:24:15.880 --> 00:24:17.880\nmy car won't run, or maintenance.\n\n524\n00:24:17.880 --> 00:24:22.310\nWe need new windshield wipers, need brake pads or brake rotors, whatever the\n\n525\n00:24:22.310 --> 00:24:22.880\ncase may\n\n526\n00:24:22.880 --> 00:24:23.880\nbe.\n\n527\n00:24:23.880 --> 00:24:27.580\nA lot of times we're hiring new auto-zoners that don't have automotive\n\n528\n00:24:27.580 --> 00:24:28.480\nknowledge.\n\n529\n00:24:28.480 --> 00:24:33.370\nWe spend a ton of time and money creating training modules so that they can get\n\n530\n00:24:33.370 --> 00:24:33.680\nup to\n\n531\n00:24:33.680 --> 00:24:34.680\nspeed.\n\n532\n00:24:34.680 --> 00:24:39.550\nBut more than anything else on the training front, we train them how to be an\n\n533\n00:24:39.550 --> 00:24:40.560\nauto-zoner.\n\n534\n00:24:40.560 --> 00:24:44.820\nAnd a big part of that is being a good listener, being empathetic to the\n\n535\n00:24:44.820 --> 00:24:46.400\ncustomer situation.\n\n536\n00:24:46.400 --> 00:24:51.020\nAnd by the way, if you don't have the knowledge today to solve that customer's\n\n537\n00:24:51.020 --> 00:24:51.880\nproblem, somebody\n\n538\n00:24:51.880 --> 00:24:56.360\nelse in the store does, and it is just fine to raise your hand and say, \"Hey,\n\n539\n00:24:56.360 --> 00:24:56.920\nDavid, can\n\n540\n00:24:56.920 --> 00:24:57.920\nyou help me with this?\n\n541\n00:24:57.920 --> 00:25:03.160\nI've gotten over my head talking about a smog pump or whatever the case may be\n\n542\n00:25:03.160 --> 00:25:03.160\n.\"\n\n543\n00:25:03.160 --> 00:25:07.880\nYou know, excellent customer service is in the DNA of every great company.\n\n544\n00:25:07.880 --> 00:25:12.570\nAnd you obviously have got this fantastic culture that you're so proud of that\n\n545\n00:25:12.570 --> 00:25:13.080\nyou used\n\n546\n00:25:13.080 --> 00:25:14.760\nto really drive it.\n\n547\n00:25:14.760 --> 00:25:19.000\nBut what's the biggest challenge you face now in keeping that culture alive and\n\n548\n00:25:19.000 --> 00:25:19.520\nkeeping\n\n549\n00:25:19.520 --> 00:25:21.320\nthat customer service going?\n\n550\n00:25:21.320 --> 00:25:22.880\nBecause it's not easy.\n\n551\n00:25:22.880 --> 00:25:26.940\nI mean, you're very upbeat and optimistic and positive, but I hear a lot of\n\n552\n00:25:26.940 --> 00:25:27.920\npeople whining\n\n553\n00:25:27.920 --> 00:25:30.800\nabout how tough the work environment is these days.\n\n554\n00:25:30.800 --> 00:25:34.600\nIt's the toughest labor market in my career.\n\n555\n00:25:34.600 --> 00:25:37.200\nAnd frankly, it started before the pandemic.\n\n556\n00:25:37.200 --> 00:25:42.780\nIf you know, there's been a lot of discussions about hourly wages and gaps and\n\n557\n00:25:42.780 --> 00:25:43.880\nwages between\n\n558\n00:25:43.880 --> 00:25:47.240\ncertain parts of society, and they were real.\n\n559\n00:25:47.240 --> 00:25:50.900\nAnd I began talking about it probably five years ago that the wage market was\n\n560\n00:25:50.900 --> 00:25:51.560\nmoving up\n\n561\n00:25:51.560 --> 00:25:54.080\nmuch quicker than it had in the past.\n\n562\n00:25:54.080 --> 00:25:58.740\nDuring the pandemic, obviously, there was a tremendous amount of economic\n\n563\n00:25:58.740 --> 00:25:59.540\nstimulus,\n\n564\n00:25:59.540 --> 00:26:05.370\nsee that true stimulus or enhanced unemployment or child tax credits, PPP money\n\n565\n00:26:05.370 --> 00:26:06.520\n, a lot of different\n\n566\n00:26:06.520 --> 00:26:11.560\nmoney that flowed into the economy and has been well documented.\n\n567\n00:26:11.560 --> 00:26:15.840\nThere was a significant amount of the population that left the workforce.\n\n568\n00:26:15.840 --> 00:26:20.080\nI think the last time I saw it now, we're about 1% below.\n\n569\n00:26:20.080 --> 00:26:26.500\nI think it was 63% versus 62% in the job penetration in the country.\n\n570\n00:26:26.500 --> 00:26:31.020\nSo it's been a very tough time for us to find people, particularly in our\n\n571\n00:26:31.020 --> 00:26:31.840\nstores and in\n\n572\n00:26:31.840 --> 00:26:34.760\nparticular in our distribution centers.\n\n573\n00:26:34.760 --> 00:26:38.280\nBut what we try to do is leverage our greatest asset.\n\n574\n00:26:38.280 --> 00:26:40.400\nOur greatest asset is our autos owners.\n\n575\n00:26:40.400 --> 00:26:44.960\nAnd so we have a referral program that pays them significant amounts of money.\n\n576\n00:26:44.960 --> 00:26:48.800\nA lot of people have been doing sign-on bonuses and we've tried those and they\n\n577\n00:26:48.800 --> 00:26:49.360\nmight work\n\n578\n00:26:49.360 --> 00:26:50.360\nhere or there.\n\n579\n00:26:50.360 --> 00:26:51.920\nI'll tell you what has worked for us.\n\n580\n00:26:51.920 --> 00:26:56.820\nAnd we've done it a long time and we amped it up during the depths of COVID.\n\n581\n00:26:56.820 --> 00:26:58.540\nAnd that's a referral bonus.\n\n582\n00:26:58.540 --> 00:27:03.150\nBecause first of all, when an autos owner puts their name on somebody else,\n\n583\n00:27:03.150 --> 00:27:03.900\nthey're going\n\n584\n00:27:03.900 --> 00:27:06.910\nto put their name on if they believe that they're going to be a good autos\n\n585\n00:27:06.910 --> 00:27:07.300\nowner.\n\n586\n00:27:07.300 --> 00:27:09.100\nAnd I think that that's really helped us.\n\n587\n00:27:09.100 --> 00:27:14.820\nBut we're still challenged with the labor situation and staffing issues in our\n\n588\n00:27:14.820 --> 00:27:15.420\nstores\n\n589\n00:27:15.420 --> 00:27:19.420\nand distribution centers or in the other parts of the organization.\n\n590\n00:27:19.420 --> 00:27:24.280\nBut we're in much different place today than we were in site April of this year\n\n591\n00:27:24.280 --> 00:27:24.580\n.\n\n592\n00:27:24.580 --> 00:27:27.940\nEvery leader casts a shadow for their organization.\n\n593\n00:27:27.940 --> 00:27:30.660\nAnd I'm looking at you right now.\n\n594\n00:27:30.660 --> 00:27:35.620\nAnd as I mentioned earlier, your autos own red and you got your name badge on.\n\n595\n00:27:35.620 --> 00:27:39.540\nAnd underneath that name badge, it says customer satisfaction, I think.\n\n596\n00:27:39.540 --> 00:27:41.900\nI think that's what I can read right there.\n\n597\n00:27:41.900 --> 00:27:44.040\nHow did that come to be?\n\n598\n00:27:44.040 --> 00:27:48.520\nAnd as a leader, what do you do to really drive home that fact that customer\n\n599\n00:27:48.520 --> 00:27:49.480\nsatisfaction\n\n600\n00:27:49.480 --> 00:27:50.480\nis what it's all about?\n\n601\n00:27:50.480 --> 00:27:52.560\nBecause you're obviously passionate about it.\n\n602\n00:27:52.560 --> 00:27:53.560\nNo question.\n\n603\n00:27:53.560 --> 00:27:55.800\nSo yes, it says customer satisfaction.\n\n604\n00:27:55.800 --> 00:27:59.950\nI'll show you a copy of my business card that says Bill Rhodes, chairman,\n\n605\n00:27:59.950 --> 00:28:00.880\npresident, chief\n\n606\n00:28:00.880 --> 00:28:04.960\nexecutive officer, customer satisfaction.\n\n607\n00:28:04.960 --> 00:28:11.210\nEvery single autos owner, 112,000 strong today, 12,000 of which are outside of\n\n608\n00:28:11.210 --> 00:28:11.920\nthe United\n\n609\n00:28:11.920 --> 00:28:13.080\nStates.\n\n610\n00:28:13.080 --> 00:28:16.680\nEvery single person has customer satisfaction in their title.\n\n611\n00:28:16.680 --> 00:28:18.440\nI've talked a lot about our culture.\n\n612\n00:28:18.440 --> 00:28:21.520\nAs you can tell, I'm incredibly passionate about our culture.\n\n613\n00:28:21.520 --> 00:28:23.440\nI want to be crystal clear.\n\n614\n00:28:23.440 --> 00:28:25.440\nI didn't create this culture.\n\n615\n00:28:25.440 --> 00:28:30.540\nPitt, Hyde, Peter, Formanac, Linda Ireland, Tom Haneman, those great leaders\n\n616\n00:28:30.540 --> 00:28:31.200\nthat came\n\n617\n00:28:31.200 --> 00:28:36.480\nbefore us today, they created this culture and they've instilled it into us to\n\n618\n00:28:36.480 --> 00:28:37.160\ncontinue\n\n619\n00:28:37.160 --> 00:28:41.560\nto nurture it and grow it and change it with the times.\n\n620\n00:28:41.560 --> 00:28:45.640\nI tell you, one of the toughest jobs that we as leaders at Autosome today have\n\n621\n00:28:45.640 --> 00:28:46.440\nis as society\n\n622\n00:28:46.440 --> 00:28:53.490\nchanges, how do we change our culture to keep up with society while also and\n\n623\n00:28:53.490 --> 00:28:55.200\nmore importantly,\n\n624\n00:28:55.200 --> 00:28:59.940\nmaking sure we have non-negotiables, those things that we will never change,\n\n625\n00:28:59.940 --> 00:29:00.320\nlike our\n\n626\n00:29:00.320 --> 00:29:05.760\ndress code, like our uniform, as I call it, like customer satisfaction.\n\n627\n00:29:05.760 --> 00:29:09.310\nI can remember talking to a new executive one time and they said, you know,\n\n628\n00:29:09.310 --> 00:29:09.880\nthere's two\n\n629\n00:29:09.880 --> 00:29:12.720\nthings that really bother me and they're just hokey.\n\n630\n00:29:12.720 --> 00:29:15.640\nFirst of all, when we start a meeting, I've got to do a cheer and pledge.\n\n631\n00:29:15.640 --> 00:29:20.800\nAnd second of all, why do I have customer satisfaction on my business card?\n\n632\n00:29:20.800 --> 00:29:21.800\nThat's hokey.\n\n633\n00:29:21.800 --> 00:29:24.240\nI said, it goes back to what I said earlier.\n\n634\n00:29:24.240 --> 00:29:27.780\nFor Autosome, it's not right for everybody and everybody's not right for Autos\n\n635\n00:29:27.780 --> 00:29:28.200\nome and\n\n636\n00:29:28.200 --> 00:29:31.740\nthat's okay because if you can't buy into this culture, if you can't be\n\n637\n00:29:31.740 --> 00:29:32.600\npassionate about\n\n638\n00:29:32.600 --> 00:29:35.040\nthis culture, you don't need to be here.\n\n639\n00:29:35.040 --> 00:29:39.360\nSo you have almost 7,000 stores outside the United States and I know you're\n\n640\n00:29:39.360 --> 00:29:40.240\nkilling it\n\n641\n00:29:40.240 --> 00:29:41.320\nin Mexico.\n\n642\n00:29:41.320 --> 00:29:44.200\nWhat are the plans to grow the business internationally and how do you decide\n\n643\n00:29:44.200 --> 00:29:44.920\nwhere you're going to\n\n644\n00:29:44.920 --> 00:29:45.920\ngo to?\n\n645\n00:29:45.920 --> 00:29:48.080\nYeah, it's a very difficult decision.\n\n646\n00:29:48.080 --> 00:29:53.260\nYou know, it's pretty easy for us and again, I was not part of the decision to\n\n647\n00:29:53.260 --> 00:29:54.360\ngo to Mexico,\n\n648\n00:29:54.360 --> 00:30:00.860\nbut we had been on the border of Mexico for years, decades, and we saw how well\n\n649\n00:30:00.860 --> 00:30:01.760\nour stores\n\n650\n00:30:01.760 --> 00:30:04.080\nperformed on the Mexican border.\n\n651\n00:30:04.080 --> 00:30:07.130\nWe also saw that they didn't perform nearly as well in the Canadian border\n\n652\n00:30:07.130 --> 00:30:08.080\nwhere the climate\n\n653\n00:30:08.080 --> 00:30:09.080\nis different.\n\n654\n00:30:09.080 --> 00:30:12.400\nYou know, the people working with their hands is not as normal.\n\n655\n00:30:12.400 --> 00:30:14.480\nAnd so we decided, let's go to Mexico.\n\n656\n00:30:14.480 --> 00:30:19.020\nWe were already having to put most of our products in Spanish language as well\n\n657\n00:30:19.020 --> 00:30:20.000\nas English.\n\n658\n00:30:20.000 --> 00:30:22.600\nSo it was a pretty easy decision for us.\n\n659\n00:30:22.600 --> 00:30:26.320\nWasn't easy in the beginning where a lot of fits and starts and actually five\n\n660\n00:30:26.320 --> 00:30:26.680\nyears\n\n661\n00:30:26.680 --> 00:30:30.720\nin, we looked at, should we stay or should we leave?\n\n662\n00:30:30.720 --> 00:30:32.600\nThank goodness we decided to stay.\n\n663\n00:30:32.600 --> 00:30:37.160\nThank goodness we continued to trust and support and resource our team down\n\n664\n00:30:37.160 --> 00:30:37.880\nthere because they\n\n665\n00:30:37.880 --> 00:30:41.440\nbuilt a really phenomenal business in Mexico.\n\n666\n00:30:41.440 --> 00:30:46.240\nNow, fast forward a few years later, we began to see the success of Mexico.\n\n667\n00:30:46.240 --> 00:30:47.840\nWe said, where is next?\n\n668\n00:30:47.840 --> 00:30:52.720\nAnd I was in a position at that point, Tom, to help be part of the team that\n\n669\n00:30:52.720 --> 00:30:53.320\nlooked to\n\n670\n00:30:53.320 --> 00:30:54.320\nwhere we go next.\n\n671\n00:30:54.320 --> 00:31:00.070\nAnd we went to China and Taiwan and Canada and Poland and Hungary and Czech\n\n672\n00:31:00.070 --> 00:31:01.040\nRepublic and\n\n673\n00:31:01.040 --> 00:31:03.640\nBrazil and all these different places.\n\n674\n00:31:03.640 --> 00:31:07.440\nWe ultimately decided on Brazil, it's not for the faint heart.\n\n675\n00:31:07.440 --> 00:31:10.720\nIt's a tough place to do business as you well know.\n\n676\n00:31:10.720 --> 00:31:14.800\nBut it also has a tremendous population of people.\n\n677\n00:31:14.800 --> 00:31:17.480\nThere are also people that are inclined to do things.\n\n678\n00:31:17.480 --> 00:31:20.600\nThere's a lot of home improvement activities that happened there.\n\n679\n00:31:20.600 --> 00:31:23.400\nAnd there were also some competitors down there that we saw that we're doing\n\n680\n00:31:23.400 --> 00:31:24.120\nvery, very\n\n681\n00:31:24.120 --> 00:31:25.120\nwell.\n\n682\n00:31:25.120 --> 00:31:29.560\nAnd so about 10 years ago, we made the leap of faith to go begin building out\n\n683\n00:31:29.560 --> 00:31:30.400\nin Brazil.\n\n684\n00:31:30.400 --> 00:31:34.760\nAnd as you can tell, I think we had 72 stores at our last public reporting.\n\n685\n00:31:34.760 --> 00:31:38.560\nWe've taken our time, taken our time because it's been hard.\n\n686\n00:31:38.560 --> 00:31:39.560\nHas not been easy.\n\n687\n00:31:39.560 --> 00:31:42.480\nWe had to make sure that first it worked for the customer.\n\n688\n00:31:42.480 --> 00:31:44.680\nWe proved that pretty quickly.\n\n689\n00:31:44.680 --> 00:31:47.560\nThe harder part was to prove that it worked for us and our shareholders.\n\n690\n00:31:47.560 --> 00:31:50.000\nAnd it was a good economic venture.\n\n691\n00:31:50.000 --> 00:31:53.440\nWe tested it for about nine months before earlier this year.\n\n692\n00:31:53.440 --> 00:31:56.960\nThe board made the declaration we were no longer in test mode.\n\n693\n00:31:56.960 --> 00:31:59.960\nAnd it was now part of our growth strategy.\n\n694\n00:31:59.960 --> 00:32:05.120\nI believe AutoZone is one of the few and maybe the only company that I know of\n\n695\n00:32:05.120 --> 00:32:05.600\nthat has had\n\n696\n00:32:05.600 --> 00:32:10.890\nboth earnings per share growth and revenue growth for each year, the past 20\n\n697\n00:32:10.890 --> 00:32:11.600\nyears.\n\n698\n00:32:11.600 --> 00:32:16.290\nWhat do you think builds the key to driving that kind of consistent performance\n\n699\n00:32:16.290 --> 00:32:16.360\n?\n\n700\n00:32:16.360 --> 00:32:19.520\nWhat do you do to get that kind of consistency?\n\n701\n00:32:19.520 --> 00:32:21.480\nSo first of all, we're a great industry.\n\n702\n00:32:21.480 --> 00:32:22.960\nThat's part of the growth story.\n\n703\n00:32:22.960 --> 00:32:24.960\nYou got to pick a great industry.\n\n704\n00:32:24.960 --> 00:32:27.680\nSecondly, we've got a phenomenal team.\n\n705\n00:32:27.680 --> 00:32:31.200\nEverybody throughout our organization, I've talked about the tenure of this\n\n706\n00:32:31.200 --> 00:32:32.080\norganization.\n\n707\n00:32:32.080 --> 00:32:36.280\nWe've got to have people that are passionate about this business that are\n\n708\n00:32:36.280 --> 00:32:37.000\nlooking to grow\n\n709\n00:32:37.000 --> 00:32:38.080\nin an industry.\n\n710\n00:32:38.080 --> 00:32:42.970\nThe other thing that I think we do here that some people think is too\n\n711\n00:32:42.970 --> 00:32:44.280\nconservative, but\n\n712\n00:32:44.280 --> 00:32:47.000\nI think for us, it's played out pretty well.\n\n713\n00:32:47.000 --> 00:32:48.000\nYou have to grow.\n\n714\n00:32:48.000 --> 00:32:50.800\nAnd we have organic growth where we can grow our store count two and half,\n\n715\n00:32:50.800 --> 00:32:51.440\nthree percent\n\n716\n00:32:51.440 --> 00:32:56.280\na year and have for a long time and believe we can for quite a bit longer.\n\n717\n00:32:56.280 --> 00:32:58.960\nBut you also have to have innovation.\n\n718\n00:32:58.960 --> 00:33:05.400\nAnd when you say innovation, so many people think about radical innovation.\n\n719\n00:33:05.400 --> 00:33:09.720\nYou know, we're going to go create a new retail model or we're going to go\n\n720\n00:33:09.720 --> 00:33:10.480\nradically\n\n721\n00:33:10.480 --> 00:33:14.800\nchange what our stores carry or what they look like.\n\n722\n00:33:14.800 --> 00:33:22.680\nWe believe that AutoZone in incremental innovation, we call it evolution over\n\n723\n00:33:22.680 --> 00:33:24.320\nrevolution.\n\n724\n00:33:24.320 --> 00:33:31.880\nAnd we say because with revolutionary innovation, the messes are a lot bigger.\n\n725\n00:33:31.880 --> 00:33:36.550\nAnd if we'll challenge ourselves to get better every day, this whole notion of\n\n726\n00:33:36.550 --> 00:33:37.360\ncontinuous\n\n727\n00:33:37.360 --> 00:33:43.440\nimprovement and the notion that let's go test things, we have 7,000 stores.\n\n728\n00:33:43.440 --> 00:33:45.360\nYou got a great idea?\n\n729\n00:33:45.360 --> 00:33:48.440\nLet's go put it in a hundred stores and prove that it's a great idea.\n\n730\n00:33:48.440 --> 00:33:51.200\nWe don't have to put it in 7,000 stores.\n\n731\n00:33:51.200 --> 00:33:55.420\nAnd when we do almost inevitably, we make a mistake and we have to go back and\n\n732\n00:33:55.420 --> 00:33:55.920\nclean\n\n733\n00:33:55.920 --> 00:33:56.920\nit up.\n\n734\n00:33:56.920 --> 00:34:00.250\nAnd doing my research and you mentioned your dad a little bit earlier, but my\n\n735\n00:34:00.250 --> 00:34:00.960\nunderstanding\n\n736\n00:34:00.960 --> 00:34:04.160\nis that he used to take you to work with him on Saturday.\n\n737\n00:34:04.160 --> 00:34:07.610\nWhat were some of the big lessons you learned from just watching your dad in\n\n738\n00:34:07.610 --> 00:34:08.200\naction?\n\n739\n00:34:08.200 --> 00:34:13.120\nYeah, I didn't go with him every Saturday, but he went almost every Saturday.\n\n740\n00:34:13.120 --> 00:34:17.440\nTherein lies one of the biggest lessons that I learned.\n\n741\n00:34:17.440 --> 00:34:21.160\nNobody was tapping his shoulder telling him he had to go to work.\n\n742\n00:34:21.160 --> 00:34:23.200\nHe went to work every Saturday.\n\n743\n00:34:23.200 --> 00:34:26.120\nWhat happened as a result thereof?\n\n744\n00:34:26.120 --> 00:34:28.800\nHis branch managers were at work every Saturday.\n\n745\n00:34:28.800 --> 00:34:33.360\nAnd it's a lesson dad taught me years and years ago, I'm sure you know who Kim\n\n746\n00:34:33.360 --> 00:34:34.160\nmons Wilson\n\n747\n00:34:34.160 --> 00:34:37.560\nis, one of the great Memphians who found it holiday in.\n\n748\n00:34:37.560 --> 00:34:42.570\nI never get the quote exactly right, but my dad beat this quote into my head,\n\n749\n00:34:42.570 --> 00:34:42.720\nwhich\n\n750\n00:34:42.720 --> 00:34:49.210\nwas, \"If you want to be successful, all you have to do is work half a day,\n\n751\n00:34:49.210 --> 00:34:50.400\nevery day.\n\n752\n00:34:50.400 --> 00:34:54.520\nAnd it doesn't matter which 12 hours it is.\"\n\n753\n00:34:54.520 --> 00:34:57.820\nYou know, today's society, a lot of times we don't want to talk about the value\n\n754\n00:34:57.820 --> 00:34:58.440\nof hard\n\n755\n00:34:58.440 --> 00:34:59.800\nwork.\n\n756\n00:34:59.800 --> 00:35:03.800\nWe want to talk many times about balance, you know, work-life balance.\n\n757\n00:35:03.800 --> 00:35:07.260\nAnd we have to make sure that in the work-life balance that we don't forget the\n\n758\n00:35:07.260 --> 00:35:07.760\nwork part\n\n759\n00:35:07.760 --> 00:35:08.760\nof it.\n\n760\n00:35:08.760 --> 00:35:12.120\nAnd I always believe the harder you work, the smarter you get.\n\n761\n00:35:12.120 --> 00:35:16.220\nI think that that was one of the things that my father taught me amongst a ton\n\n762\n00:35:16.220 --> 00:35:16.880\nof others.\n\n763\n00:35:16.880 --> 00:35:21.240\nMy dad, as I mentioned earlier, he was a coaches coach.\n\n764\n00:35:21.240 --> 00:35:25.610\nAnd I could listen in, sit in his office, I'd watch him print off these reports\n\n765\n00:35:25.610 --> 00:35:25.720\n, and\n\n766\n00:35:25.720 --> 00:35:28.520\nI'd watch him circle numbers.\n\n767\n00:35:28.520 --> 00:35:31.470\nAnd then I see him pick up the telephone and he'd start talking to every one of\n\n768\n00:35:31.470 --> 00:35:32.000\nhis branch\n\n769\n00:35:32.000 --> 00:35:33.000\nmanagers.\n\n770\n00:35:33.000 --> 00:35:37.040\nAnd he always found something positive to talk to them about.\n\n771\n00:35:37.040 --> 00:35:39.450\nBut they all knew at the end of the day there was going to be one of those\n\n772\n00:35:39.450 --> 00:35:40.000\nnumbers that\n\n773\n00:35:40.000 --> 00:35:43.400\nhe was going to hone in on, say, \"Hey, what are we doing on this front?\n\n774\n00:35:43.400 --> 00:35:45.320\nHow do we get better here?\"\n\n775\n00:35:45.320 --> 00:35:49.870\nAnd this notion of continuous improvement, evolution over revolution, I think\n\n776\n00:35:49.870 --> 00:35:50.280\nmy dad\n\n777\n00:35:50.280 --> 00:35:52.040\ntaught me a lot of those lessons.\n\n778\n00:35:52.040 --> 00:35:54.100\nYou know, so let's fast forward a little bit.\n\n779\n00:35:54.100 --> 00:35:58.930\nYou go to the University of Tennessee, Martin, on a golf scholarship and you\n\n780\n00:35:58.930 --> 00:35:59.680\nget a degree\n\n781\n00:35:59.680 --> 00:36:00.680\nin accounting.\n\n782\n00:36:00.680 --> 00:36:01.680\nWhy accounting, Bill?\n\n783\n00:36:01.680 --> 00:36:04.240\nWell, I wanted to be my dad.\n\n784\n00:36:04.240 --> 00:36:05.480\nMy dad was my hero.\n\n785\n00:36:05.480 --> 00:36:08.040\nAnd he was a manager.\n\n786\n00:36:08.040 --> 00:36:10.640\nSo I knew I wanted to be in business.\n\n787\n00:36:10.640 --> 00:36:14.020\nAnd so I got to UT, Martin, and I went to, you know, started doing all the\n\n788\n00:36:14.020 --> 00:36:14.920\nregular classes\n\n789\n00:36:14.920 --> 00:36:16.280\nand I would go to the business people.\n\n790\n00:36:16.280 --> 00:36:19.920\nAnd I talked to them about the various majors that they had.\n\n791\n00:36:19.920 --> 00:36:25.520\nAnd at the end of the day, I got talked into an accounting major.\n\n792\n00:36:25.520 --> 00:36:29.470\nAnd I'll never forget this as long as I live, went downstairs to the phone\n\n793\n00:36:29.470 --> 00:36:30.280\nbooth because\n\n794\n00:36:30.280 --> 00:36:33.200\nthere were no phones in your room in the dormitory.\n\n795\n00:36:33.200 --> 00:36:36.360\nAnd I stood in line to call my parents on a landline.\n\n796\n00:36:36.360 --> 00:36:38.440\nAnd they both got on landlines at home.\n\n797\n00:36:38.440 --> 00:36:42.120\nAnd we got a conversation about dads that, \"Son, have you decided what you're\n\n798\n00:36:42.120 --> 00:36:42.480\ngoing\n\n799\n00:36:42.480 --> 00:36:43.480\nto major in?\"\n\n800\n00:36:43.480 --> 00:36:46.600\nAnd I said, \"Yes, sir, I have.\"\n\n801\n00:36:46.600 --> 00:36:48.080\nAnd he said, \"Okay, what is it?\"\n\n802\n00:36:48.080 --> 00:36:49.080\nAnd I said, \"Accounting.\"\n\n803\n00:36:49.080 --> 00:36:50.720\nAnd he said, \"Accounting.\n\n804\n00:36:50.720 --> 00:36:55.200\nWhy in the world would you want to be an accountant?\"\n\n805\n00:36:55.200 --> 00:36:58.400\nThey wear like green-arm bands and green ice shades and they sit in the corner\n\n806\n00:36:58.400 --> 00:36:59.120\nby themselves\n\n807\n00:36:59.120 --> 00:37:00.760\nand do numbers all day.\n\n808\n00:37:00.760 --> 00:37:03.080\nThat doesn't seem to be you to me.\n\n809\n00:37:03.080 --> 00:37:05.680\nI said, \"Well, Dad, here's why I picked it.\"\n\n810\n00:37:05.680 --> 00:37:10.720\nThey told me that it was the most difficult major in the business school at UT\n\n811\n00:37:10.720 --> 00:37:11.400\nMartin.\n\n812\n00:37:11.400 --> 00:37:13.800\nAnd so I said, \"I'll go do it.\"\n\n813\n00:37:13.800 --> 00:37:16.480\nAnd he said, \"That's good enough for me.\"\n\n814\n00:37:16.480 --> 00:37:18.280\nThat's great.\n\n815\n00:37:18.280 --> 00:37:21.420\nI'll tell you what, if that doesn't tell you something about Bill Rose, I don't\n\n816\n00:37:21.420 --> 00:37:21.800\nthink\n\n817\n00:37:21.800 --> 00:37:22.800\nanything will.\n\n818\n00:37:22.800 --> 00:37:26.120\nI mean, you absolutely love a challenge.\n\n819\n00:37:26.120 --> 00:37:29.080\nAnd you're also an outstanding golfer in college.\n\n820\n00:37:29.080 --> 00:37:33.570\nAnd as you look back in those college days in golf, what was the big challenge\n\n821\n00:37:33.570 --> 00:37:34.080\nyou had\n\n822\n00:37:34.080 --> 00:37:36.560\nto overcome in that just to be able to compete?\n\n823\n00:37:36.560 --> 00:37:38.560\nYeah, I love my days in college.\n\n824\n00:37:38.560 --> 00:37:42.040\nAnd I love playing for University of Tennessee at Martin.\n\n825\n00:37:42.040 --> 00:37:46.680\nAnd my coach Grover Page, who was very requiring, I loved it.\n\n826\n00:37:46.680 --> 00:37:49.040\nI played really well my first couple of years.\n\n827\n00:37:49.040 --> 00:37:52.280\nAnd then my junior year, I did not play well at all.\n\n828\n00:37:52.280 --> 00:37:56.720\nIn fact, my coach, coach Page, talked to me after my junior year and said, \"You\n\n829\n00:37:56.720 --> 00:37:57.280\nknow,\n\n830\n00:37:57.280 --> 00:37:58.680\nyou're not performing well.\n\n831\n00:37:58.680 --> 00:38:01.480\nI'm going to take at least half your scholarship away.\n\n832\n00:38:01.480 --> 00:38:04.800\nGoing into your senior year, I've had this conversation with many people.\n\n833\n00:38:04.800 --> 00:38:07.760\nI would assume that you don't want to play next year.\n\n834\n00:38:07.760 --> 00:38:10.160\nAnd I immediately said, \"No, sir, coach.\n\n835\n00:38:10.160 --> 00:38:11.160\nI'll fix it.\n\n836\n00:38:11.160 --> 00:38:12.480\nI'll go to work this summer.\n\n837\n00:38:12.480 --> 00:38:15.120\nI'll work like crazy and I'll be better.\"\n\n838\n00:38:15.120 --> 00:38:19.360\nAnd the one thing I ask you is if you watch what I do, because in golf, there's\n\n839\n00:38:19.360 --> 00:38:19.520\nreally\n\n840\n00:38:19.520 --> 00:38:22.520\nthe bigger part of the season is the summer season.\n\n841\n00:38:22.520 --> 00:38:26.640\nAnd I said, \"I just ask you watch what I do in the major events this summer.\n\n842\n00:38:26.640 --> 00:38:30.240\nAnd if you happen to have scholarship money, give it back to me.\"\n\n843\n00:38:30.240 --> 00:38:34.340\nAnd I'll never forget, I was cleaning out the attic at my parents' house in\n\n844\n00:38:34.340 --> 00:38:34.960\nAugust in\n\n845\n00:38:34.960 --> 00:38:36.600\nMemphis, Tennessee.\n\n846\n00:38:36.600 --> 00:38:38.200\nYou know what that's like.\n\n847\n00:38:38.200 --> 00:38:41.520\nMy mother got a phone call and she said, \"Coach Page is on the phone.\"\n\n848\n00:38:41.520 --> 00:38:45.920\nAnd he came back and he said, \"Hey, I do have a little money left.\n\n849\n00:38:45.920 --> 00:38:48.960\nI've seen how you performed and I want to give you your scholarship back.\"\n\n850\n00:38:48.960 --> 00:38:49.960\nAnd that's great.\n\n851\n00:38:49.960 --> 00:38:51.400\nI appreciate it.\n\n852\n00:38:51.400 --> 00:38:55.320\nAnd I'll do all I can to make sure that you don't regret that.\n\n853\n00:38:55.320 --> 00:39:02.320\nHey, you know, because you're listening to this, I can tell you're the kind of\n\n854\n00:39:02.320 --> 00:39:03.080\nperson\n\n855\n00:39:03.080 --> 00:39:05.720\nwho wants to learn how to lead well.\n\n856\n00:39:05.720 --> 00:39:09.280\nBut there's a lot of companies out there who want to take that desire and\n\n857\n00:39:09.280 --> 00:39:11.080\ncharge you $500\n\n858\n00:39:11.080 --> 00:39:16.800\nor $1,000 or heck, even $20,000 to try and show you how to lead.\n\n859\n00:39:16.800 --> 00:39:18.800\nThat's just not right.\n\n860\n00:39:18.800 --> 00:39:21.950\nIf you want to be a better leader, I believe you deserve to have access to\n\n861\n00:39:21.950 --> 00:39:22.760\nsomething that\n\n862\n00:39:22.760 --> 00:39:26.560\nwill truly help you and it shouldn't cost a fortune.\n\n863\n00:39:26.560 --> 00:39:31.080\nSo I want you to go to howleaderslead.com and start my leadership class.\n\n864\n00:39:31.080 --> 00:39:33.040\nIt's really and truly free.\n\n865\n00:39:33.040 --> 00:39:37.680\nAnd after you take this class, you're going to feel more confident in your role\n\n866\n00:39:37.680 --> 00:39:38.000\nand you'll\n\n867\n00:39:38.000 --> 00:39:41.360\nbe on your way to getting big things done with your team.\n\n868\n00:39:41.360 --> 00:39:45.920\nGo check it out at howleaderslead.com.\n\n869\n00:39:45.920 --> 00:39:54.260\nFrom what I understand, golf is what actually got you in the door at Ernst &\n\n870\n00:39:54.260 --> 00:39:56.080\nWinnie, which\n\n871\n00:39:56.080 --> 00:39:57.520\nis now Ernst & Young.\n\n872\n00:39:57.520 --> 00:39:59.200\nTell us about that story.\n\n873\n00:39:59.200 --> 00:40:03.760\nIt's amazing how twists and turns happen in your life.\n\n874\n00:40:03.760 --> 00:40:09.200\nAnd this particular one was pretty amazing and it is how my career got started.\n\n875\n00:40:09.200 --> 00:40:13.750\nI was a good student at UT Martin, but I was never an upper echelon top of the\n\n876\n00:40:13.750 --> 00:40:14.600\ntop student\n\n877\n00:40:14.600 --> 00:40:19.600\nthat any of the back then big eight accounting firms would have recruited.\n\n878\n00:40:19.600 --> 00:40:21.280\nAnd so I come back to Memphis.\n\n879\n00:40:21.280 --> 00:40:26.290\nI learned and even though I said I wanted the toughest degree at UT Martin,\n\n880\n00:40:26.290 --> 00:40:26.920\nabout halfway\n\n881\n00:40:26.920 --> 00:40:29.160\nthrough my junior year, I learned two things.\n\n882\n00:40:29.160 --> 00:40:33.120\nOne, I didn't particularly care for accounting.\n\n883\n00:40:33.120 --> 00:40:35.680\nAnd more importantly accounting didn't like me.\n\n884\n00:40:35.680 --> 00:40:39.160\nAnd so I decided I would go straight to the University of Memphis when I\n\n885\n00:40:39.160 --> 00:40:39.800\ngraduated and\n\n886\n00:40:39.800 --> 00:40:45.240\nget an MBA and focus on management and then go follow in my dad's footsteps.\n\n887\n00:40:45.240 --> 00:40:49.480\nWhen I came home, there was a little article in the commercial appeal, our\n\n888\n00:40:49.480 --> 00:40:50.280\nlocal paper\n\n889\n00:40:50.280 --> 00:40:55.680\nin Memphis, talked about the success I'd had my senior year in college, playing\n\n890\n00:40:55.680 --> 00:40:55.800\ngolf,\n\n891\n00:40:55.800 --> 00:41:00.080\nand then mentioned that I was at the University of Memphis pursuing an MBA.\n\n892\n00:41:00.080 --> 00:41:03.690\nAnd there was a gentleman by the name Mike Hopper who ran the audit practice of\n\n893\n00:41:03.690 --> 00:41:04.240\nthe Ernst\n\n894\n00:41:04.240 --> 00:41:07.000\nand Winnie at the time office.\n\n895\n00:41:07.000 --> 00:41:11.960\nAnd Ernst and Winnie had three groups at the office, three different practices.\n\n896\n00:41:11.960 --> 00:41:16.200\nOne was audit, one was consulting, one was tax.\n\n897\n00:41:16.200 --> 00:41:20.300\nAnd so he called my mother's house and said, \"Hey, I'd like for you to have\n\n898\n00:41:20.300 --> 00:41:21.240\nBill call me.\"\n\n899\n00:41:21.240 --> 00:41:24.840\nSo I come in and back then you wrote on the refrigerator, just to call Mike Ho\n\n900\n00:41:24.840 --> 00:41:25.360\npper Ernst\n\n901\n00:41:25.360 --> 00:41:26.360\nand Winnie.\n\n902\n00:41:26.360 --> 00:41:27.880\nI called him and said, \"Hey, I read about you.\n\n903\n00:41:27.880 --> 00:41:28.880\nI'd like to interview you.\"\n\n904\n00:41:28.880 --> 00:41:35.830\nWhen I was a college boy, I put on my best duck head khakis, my penny loafers,\n\n905\n00:41:35.830 --> 00:41:36.040\nwell,\n\n906\n00:41:36.040 --> 00:41:39.200\na navy blazer, I borrowed a tie from my dad who's six-fives.\n\n907\n00:41:39.200 --> 00:41:43.400\nIt was way too long, had a full beard.\n\n908\n00:41:43.400 --> 00:41:48.030\nBack then in public accounting, you wore dark suits, white shirts, no facial\n\n909\n00:41:48.030 --> 00:41:48.320\nhair.\n\n910\n00:41:48.320 --> 00:41:50.240\nI went down to see this guy Mike Hopper.\n\n911\n00:41:50.240 --> 00:41:53.180\nHe walks me into his corner office overlooking the Mississippi River and he\n\n912\n00:41:53.180 --> 00:41:54.120\nstarts interviewing\n\n913\n00:41:54.120 --> 00:41:55.120\nme.\n\n914\n00:41:55.120 --> 00:41:59.560\nAnd about three minutes in, and he says, \"Alright, here, stop.\n\n915\n00:41:59.560 --> 00:42:01.060\nHere's the deal.\"\n\n916\n00:42:01.060 --> 00:42:06.720\nAt Ernst and Winnie, we have three practices, audit, tax, and consulting.\n\n917\n00:42:06.720 --> 00:42:10.240\nEvery year we have a golf challenge between the different practices.\n\n918\n00:42:10.240 --> 00:42:15.520\nHe says, \"Since I've been here, we've finished last in the golf challenge every\n\n919\n00:42:15.520 --> 00:42:16.120\nyear.\n\n920\n00:42:16.120 --> 00:42:18.120\nI don't believe not one, we've finished last.\n\n921\n00:42:18.120 --> 00:42:19.480\nSo I want to hire you.\n\n922\n00:42:19.480 --> 00:42:23.000\nYou can work one hour a week or 60 hours a week.\n\n923\n00:42:23.000 --> 00:42:24.400\nI don't care.\n\n924\n00:42:24.400 --> 00:42:26.200\nThis was May of 1988.\n\n925\n00:42:26.200 --> 00:42:29.360\nI was going to graduate from graduate school in December 1988.\n\n926\n00:42:29.360 --> 00:42:34.210\nAnd he said, \"You can work here until the end of your graduate school or until\n\n927\n00:42:34.210 --> 00:42:34.680\nafter\n\n928\n00:42:34.680 --> 00:42:35.680\nthe golf challenge.\n\n929\n00:42:35.680 --> 00:42:40.720\nEither one works for me, but we won't be looking to hire you full time.\"\n\n930\n00:42:40.720 --> 00:42:45.300\nSo I got this great opportunity to go to Ernst and Winnie and I thought, \"How\n\n931\n00:42:45.300 --> 00:42:46.480\ncan you not\n\n932\n00:42:46.480 --> 00:42:51.200\nwrite on your resume that you worked as an intern for Ernst and Winnie?\"\n\n933\n00:42:51.200 --> 00:42:53.160\nAnd it was the beginning of my career.\n\n934\n00:42:53.160 --> 00:42:57.880\nFortunately for me, by the time December came along, they decided that maybe I\n\n935\n00:42:57.880 --> 00:42:58.520\ncould make\n\n936\n00:42:58.520 --> 00:43:00.640\nit there and they brought me on full time.\n\n937\n00:43:00.640 --> 00:43:03.200\nAnd I stayed there a total of six and a half years.\n\n938\n00:43:03.200 --> 00:43:06.600\nIt was the greatest training ground I could have ever had.\n\n939\n00:43:06.600 --> 00:43:08.200\nDid you help them win or not?\n\n940\n00:43:08.200 --> 00:43:09.200\nYeah, we won.\n\n941\n00:43:09.200 --> 00:43:12.200\nSo we won.\n\n942\n00:43:12.200 --> 00:43:15.720\nBut much more disappointingly, they never held it again.\n\n943\n00:43:15.720 --> 00:43:16.720\nThat was it.\n\n944\n00:43:16.720 --> 00:43:20.920\nWell, now that you're on the team, there was no chance.\n\n945\n00:43:20.920 --> 00:43:24.480\nAs a consultant or an auditor, you really get to put your head underneath the\n\n946\n00:43:24.480 --> 00:43:25.360\ntent or raise\n\n947\n00:43:25.360 --> 00:43:27.240\nthe hood and really check out companies.\n\n948\n00:43:27.240 --> 00:43:31.520\nAnd you'd check out, I'm sure, five to ten companies a year.\n\n949\n00:43:31.520 --> 00:43:35.600\nWhat did you learn from that experience, Bill, as you were moving up the ladder\n\n950\n00:43:35.600 --> 00:43:35.600\n?\n\n951\n00:43:35.600 --> 00:43:38.960\nI call it sometimes the greatest MBA program.\n\n952\n00:43:38.960 --> 00:43:41.080\nWhere else can you be?\n\n953\n00:43:41.080 --> 00:43:43.720\nYou're 23 to 26 years old.\n\n954\n00:43:43.720 --> 00:43:47.320\nI guess I was 28 or so when I left.\n\n955\n00:43:47.320 --> 00:43:53.080\nWhere can you be where you get an opportunity to see inside of a company?\n\n956\n00:43:53.080 --> 00:43:56.480\nMy case back then, probably eight to 12 a year.\n\n957\n00:43:56.480 --> 00:44:02.130\nYou get to see which businesses perform well and why, which industries are cycl\n\n958\n00:44:02.130 --> 00:44:02.760\nical, which\n\n959\n00:44:02.760 --> 00:44:04.120\nones aren't.\n\n960\n00:44:04.120 --> 00:44:07.450\nMore importantly, you get to see which leaders are successful and what are\n\n961\n00:44:07.450 --> 00:44:08.320\ntheir leadership\n\n962\n00:44:08.320 --> 00:44:09.320\ntraits.\n\n963\n00:44:09.320 --> 00:44:13.860\nYou see which leaders fail or aren't as successful and what maybe are they\n\n964\n00:44:13.860 --> 00:44:14.680\nmissing?\n\n965\n00:44:14.680 --> 00:44:18.990\nIn AutoZone's case, it gave me the chance to see inside this culture and I\n\n966\n00:44:18.990 --> 00:44:19.520\nwanted to\n\n967\n00:44:19.520 --> 00:44:20.840\nbe a part of this culture.\n\n968\n00:44:20.840 --> 00:44:25.320\nSo it was really just maybe the greatest learning experience I've ever had.\n\n969\n00:44:25.320 --> 00:44:27.600\nYou joined AutoZone in 1994.\n\n970\n00:44:27.600 --> 00:44:29.520\nYou had a lot of different positions.\n\n971\n00:44:29.520 --> 00:44:32.940\nBut one of the things that we were talking about this past weekend was that you\n\n972\n00:44:32.940 --> 00:44:33.320\nhad what\n\n973\n00:44:33.320 --> 00:44:37.000\nyou call sort of a \"lucky demotion.\"\n\n974\n00:44:37.000 --> 00:44:38.240\nTalk to us about that.\n\n975\n00:44:38.240 --> 00:44:41.920\nI came into AutoZone 1994 as the manager of inventory accounting.\n\n976\n00:44:41.920 --> 00:44:45.910\nI did that for about six months and they wanted to start an internal audit\n\n977\n00:44:45.910 --> 00:44:46.800\ndepartment.\n\n978\n00:44:46.800 --> 00:44:49.840\nAnd so they asked me to do that in addition to what I was doing, but I wanted\n\n979\n00:44:49.840 --> 00:44:50.160\nto call\n\n980\n00:44:50.160 --> 00:44:53.320\nit process improvement because I didn't want to know in the nature at the time\n\n981\n00:44:53.320 --> 00:44:53.800\nof internal\n\n982\n00:44:53.800 --> 00:44:54.800\naudit.\n\n983\n00:44:54.800 --> 00:44:56.560\nDid that for about a year.\n\n984\n00:44:56.560 --> 00:45:00.960\nThen I went to work for our president and kind of a support function.\n\n985\n00:45:00.960 --> 00:45:05.190\nDid that for maybe six months and then we started buying companies and I did a\n\n986\n00:45:05.190 --> 00:45:05.600\nlot of\n\n987\n00:45:05.600 --> 00:45:09.810\nM&A work for about three years in addition to my supporting the store\n\n988\n00:45:09.810 --> 00:45:10.880\noperations.\n\n989\n00:45:10.880 --> 00:45:15.170\nOur CFO at the time was beginning to talk about his timeline and how long\n\n990\n00:45:15.170 --> 00:45:16.560\nbefore he retired.\n\n991\n00:45:16.560 --> 00:45:20.920\nSo I was moved back into the finance organization as a vice president.\n\n992\n00:45:20.920 --> 00:45:24.160\nI was already a vice president but moved back as a vice president.\n\n993\n00:45:24.160 --> 00:45:27.630\nAfter four months I was promoted to a senior vice president, a finance and the\n\n994\n00:45:27.630 --> 00:45:28.280\ncontroller\n\n995\n00:45:28.280 --> 00:45:31.080\nof the company and thought, \"Man, this is going crazy.\n\n996\n00:45:31.080 --> 00:45:35.570\nI was, I don't know, 34 years old or something shocking to me to be considered\n\n997\n00:45:35.570 --> 00:45:36.200\nfor a role\n\n998\n00:45:36.200 --> 00:45:39.040\nlike that at that stage in my career.\"\n\n999\n00:45:39.040 --> 00:45:43.100\nFour months later I get called in the office on a Thursday by one of my mentors\n\n1000\n00:45:43.100 --> 00:45:43.920\n, Tim Vargo.\n\n1001\n00:45:43.920 --> 00:45:48.330\nHe says, \"Hey, the board's met all week and we've actually decided you're not\n\n1002\n00:45:48.330 --> 00:45:48.800\ngoing\n\n1003\n00:45:48.800 --> 00:45:51.240\nto be the next CFO.\n\n1004\n00:45:51.240 --> 00:45:53.200\nIn fact, we've hired him.\n\n1005\n00:45:53.200 --> 00:45:55.360\nHe starts on Monday.\n\n1006\n00:45:55.360 --> 00:45:57.720\nHe's going to take your job.\n\n1007\n00:45:57.720 --> 00:46:02.200\nYou're going to be demoted back to a vice president.\n\n1008\n00:46:02.200 --> 00:46:06.040\nWe don't know what you're going to do, but we like you.\"\n\n1009\n00:46:06.040 --> 00:46:10.600\nI was tracking with it all along until he said, \"But we like you.\"\n\n1010\n00:46:10.600 --> 00:46:13.950\nLo and behold, they called me back in about a week later and said, \"Yep, you're\n\n1011\n00:46:13.950 --> 00:46:14.280\ngoing\n\n1012\n00:46:14.280 --> 00:46:19.600\nto be the vice president of the Mid-South Division of Stores.\"\n\n1013\n00:46:19.600 --> 00:46:26.190\nSo I went from running the accounting organization to working with 525 stores\n\n1014\n00:46:26.190 --> 00:46:27.680\nin 11 states and\n\n1015\n00:46:27.680 --> 00:46:30.400\n8,000 people.\n\n1016\n00:46:30.400 --> 00:46:34.670\nWhat a great opportunity that was for me to really learn our business from the\n\n1017\n00:46:34.670 --> 00:46:35.160\nground\n\n1018\n00:46:35.160 --> 00:46:39.730\nfloor, to get to know our people at a more intimate level, and to help\n\n1019\n00:46:39.730 --> 00:46:40.680\nunderstand what\n\n1020\n00:46:40.680 --> 00:46:44.280\nthey needed for us to all to be the most successful we can be.\n\n1021\n00:46:44.280 --> 00:46:47.210\nAnd that was really when you demonstrated you're much more than a numbers\n\n1022\n00:46:47.210 --> 00:46:47.720\nperson that\n\n1023\n00:46:47.720 --> 00:46:49.080\nyou were a general manager.\n\n1024\n00:46:49.080 --> 00:46:51.040\nYou could make money and make things happen, right?\n\n1025\n00:46:51.040 --> 00:46:53.760\nI don't know about that because we weren't terribly successful.\n\n1026\n00:46:53.760 --> 00:46:57.760\nI was in that role because I was only in that role 11 months and then I got re-\n\n1027\n00:46:57.760 --> 00:46:58.360\npromoted\n\n1028\n00:46:58.360 --> 00:47:01.680\nthis time to be senior vice president of our supply chain.\n\n1029\n00:47:01.680 --> 00:47:05.360\nSo our distribution centers and transportation fleet, I was like, \"Thank\n\n1030\n00:47:05.360 --> 00:47:06.280\ngoodness you all\n\n1031\n00:47:06.280 --> 00:47:09.040\ngot me out of that role because I don't know if the company could afford it.\n\n1032\n00:47:09.040 --> 00:47:10.920\nThose kind of sales much longer.\"\n\n1033\n00:47:10.920 --> 00:47:11.920\nWhen did the company know?\n\n1034\n00:47:11.920 --> 00:47:15.320\nWhen did you know that you wanted to be more than a finance person?\n\n1035\n00:47:15.320 --> 00:47:17.360\nThat you wanted to really run the business?\n\n1036\n00:47:17.360 --> 00:47:23.280\nI think I knew it when I was in college, when I studied accounting, and I knew\n\n1037\n00:47:23.280 --> 00:47:23.440\nthat it was\n\n1038\n00:47:23.440 --> 00:47:24.800\na great profession.\n\n1039\n00:47:24.800 --> 00:47:30.080\nAnd I'm a huge proponent of accounting because it is the language of business.\n\n1040\n00:47:30.080 --> 00:47:32.880\nBut I really wanted to be my dad.\n\n1041\n00:47:32.880 --> 00:47:39.480\nAnd I saw the impact that my dad could have on people by being a people leader.\n\n1042\n00:47:39.480 --> 00:47:41.720\nAnd that's what was inspiring to me.\n\n1043\n00:47:41.720 --> 00:47:45.680\nYou've been such a successful CEO and you're a leader in the retail industry.\n\n1044\n00:47:45.680 --> 00:47:50.600\nI know a few years back, you and other few CEOs, you met with the president to\n\n1045\n00:47:50.600 --> 00:47:51.680\ntalk about\n\n1046\n00:47:51.680 --> 00:47:54.480\nthe tariff situations in China.\n\n1047\n00:47:54.480 --> 00:47:57.930\nYou know, meeting with the president, Bill, that's pretty heady stuff, no\n\n1048\n00:47:57.930 --> 00:47:59.440\nmatter how successful\n\n1049\n00:47:59.440 --> 00:48:00.440\nyou are.\n\n1050\n00:48:00.440 --> 00:48:03.880\nWhat did it feel like just to be in the room and be at the White House?\n\n1051\n00:48:03.880 --> 00:48:07.430\nIt was funny, as we were preparing to go to the White House, I went with the\n\n1052\n00:48:07.430 --> 00:48:08.320\nretail industry\n\n1053\n00:48:08.320 --> 00:48:09.320\nleaders association.\n\n1054\n00:48:09.320 --> 00:48:12.880\nI think there were eight of us that were CEOs of retail companies.\n\n1055\n00:48:12.880 --> 00:48:18.350\nWe met with President Donald Trump and Gary Cohen and Jared Kushner and Mike\n\n1056\n00:48:18.350 --> 00:48:19.120\nPence and\n\n1057\n00:48:19.120 --> 00:48:20.120\nmaybe a couple others.\n\n1058\n00:48:20.120 --> 00:48:22.040\nIt was fascinating.\n\n1059\n00:48:22.040 --> 00:48:25.120\nBut leading up to that meeting, everybody kept asking, says, \"Well, I'm sure\n\n1060\n00:48:25.120 --> 00:48:25.480\nyou've\n\n1061\n00:48:25.480 --> 00:48:26.640\nbeen in the White House before.\"\n\n1062\n00:48:26.640 --> 00:48:30.520\nAnd I said, \"Of course I have, as a tourist.\n\n1063\n00:48:30.520 --> 00:48:35.420\nBut to walk into the White House with all these cameras and everybody on you,\n\n1064\n00:48:35.420 --> 00:48:36.060\nseven of my\n\n1065\n00:48:36.060 --> 00:48:42.120\npeers walk into the Roosevelt Room, tons of media in there.\n\n1066\n00:48:42.120 --> 00:48:45.880\nAnd we were waiting on a president of Trump and his team.\n\n1067\n00:48:45.880 --> 00:48:48.360\nAnd we were in there maybe 30 minutes or so waiting.\n\n1068\n00:48:48.360 --> 00:48:53.050\nIt was just look around that room and think about who had been in that room and\n\n1069\n00:48:53.050 --> 00:48:53.720\nthe kinds\n\n1070\n00:48:53.720 --> 00:48:56.200\nof decisions that had been there.\n\n1071\n00:48:56.200 --> 00:48:57.840\nIt was surreal, David.\n\n1072\n00:48:57.840 --> 00:49:01.090\nAnd then President Trump was a little late because he was having to deal with\n\n1073\n00:49:01.090 --> 00:49:01.640\nsomething\n\n1074\n00:49:01.640 --> 00:49:04.160\nelse and he had a major meeting behind us.\n\n1075\n00:49:04.160 --> 00:49:07.560\nSo we felt like our time would be compressed and it was not.\n\n1076\n00:49:07.560 --> 00:49:10.320\nBeing his team were in there with us for an hour.\n\n1077\n00:49:10.320 --> 00:49:13.880\nThe media was in there for the first three or four minutes and then left.\n\n1078\n00:49:13.880 --> 00:49:18.320\nAnd we had one of the more fascinating conversations that I've ever had.\n\n1079\n00:49:18.320 --> 00:49:23.360\nI was particularly impressed that Gary Cohen and his thoughtfulness and where\n\n1080\n00:49:23.360 --> 00:49:24.200\nhe was going\n\n1081\n00:49:24.200 --> 00:49:28.350\nand the fact that President Trump and Pence, all of them were, Vice President\n\n1082\n00:49:28.350 --> 00:49:28.880\nPence, all\n\n1083\n00:49:28.880 --> 00:49:30.640\nof them were listening.\n\n1084\n00:49:30.640 --> 00:49:34.430\nWe had a great discussion at the time there was a movement going on to have a\n\n1085\n00:49:34.430 --> 00:49:35.320\nborder adjustment\n\n1086\n00:49:35.320 --> 00:49:40.980\ntax which ultimately got killed but it came back in the form of tariffs, six,\n\n1087\n00:49:40.980 --> 00:49:41.960\nnine months\n\n1088\n00:49:41.960 --> 00:49:43.080\nlater.\n\n1089\n00:49:43.080 --> 00:49:47.780\nBut to be at the seat of government and to have the opportunity to represent\n\n1090\n00:49:47.780 --> 00:49:48.760\nyour industry\n\n1091\n00:49:48.760 --> 00:49:53.320\nand to represent in my case, AutoZone and AutoZoneers, it was a tremendous\n\n1092\n00:49:53.320 --> 00:49:54.000\nhonor.\n\n1093\n00:49:54.000 --> 00:49:58.040\nAnd then we left the Roosevelt Room and went into the Oval Office.\n\n1094\n00:49:58.040 --> 00:50:01.940\nI'm sure you've had these experiences in the past that you're going to go see\n\n1095\n00:50:01.940 --> 00:50:02.600\nsomething\n\n1096\n00:50:02.600 --> 00:50:06.160\nthat you've envisioned your whole life and you get there and you see it.\n\n1097\n00:50:06.160 --> 00:50:07.880\nIt looks nothing like you thought it would look.\n\n1098\n00:50:07.880 --> 00:50:11.690\nI guess maybe I've watched too much TV when you walk into the Oval Office is\n\n1099\n00:50:11.690 --> 00:50:12.480\nlike, \"Yep,\n\n1100\n00:50:12.480 --> 00:50:13.480\nthere's those brown sofas.\n\n1101\n00:50:13.480 --> 00:50:14.480\nThere's the window.\"\n\n1102\n00:50:14.480 --> 00:50:17.080\nI mean, it's like you knew exactly where you were.\n\n1103\n00:50:17.080 --> 00:50:18.760\nIt was really remarkable.\n\n1104\n00:50:18.760 --> 00:50:22.320\nYou've had so much success, Bill, but all of us have had what we might call our\n\n1105\n00:50:22.320 --> 00:50:23.120\nepic fail.\n\n1106\n00:50:23.120 --> 00:50:27.600\nWhen you look back on your career, what would be one failure that you learned\n\n1107\n00:50:27.600 --> 00:50:28.920\nthe most from?\n\n1108\n00:50:28.920 --> 00:50:30.920\nHow much time do you have?\n\n1109\n00:50:30.920 --> 00:50:31.920\nThere's a long list.\n\n1110\n00:50:31.920 --> 00:50:33.480\nI know you said one.\n\n1111\n00:50:33.480 --> 00:50:36.840\nThere's one that really sticks with most of my failures that I've made and I've\n\n1112\n00:50:36.840 --> 00:50:37.000\nmade\n\n1113\n00:50:37.000 --> 00:50:39.000\na gazillion of them.\n\n1114\n00:50:39.000 --> 00:50:41.480\nMost of them have been bad people decisions.\n\n1115\n00:50:41.480 --> 00:50:46.480\nAnd those are the hardest because you're impacting somebody's life and they're\n\n1116\n00:50:46.480 --> 00:50:46.880\nin their\n\n1117\n00:50:46.880 --> 00:50:48.240\nfamily's livelihoods.\n\n1118\n00:50:48.240 --> 00:50:52.370\nYou either promoted them too soon, you promoted them too late, you moved them\n\n1119\n00:50:52.370 --> 00:50:53.080\nin and apart\n\n1120\n00:50:53.080 --> 00:50:55.680\nof the organization where they couldn't be successful.\n\n1121\n00:50:55.680 --> 00:51:01.320\nBut I made one critical error in 1996 that I will never forget.\n\n1122\n00:51:01.320 --> 00:51:03.440\nI was responsible for labor scheduling.\n\n1123\n00:51:03.440 --> 00:51:08.760\nI don't remember how many stores we had in '96, probably 1200.\n\n1124\n00:51:08.760 --> 00:51:12.640\nWe were trying to figure out ways to be more efficient with our labor.\n\n1125\n00:51:12.640 --> 00:51:17.540\nAt the time, we had three person minimums in all of our stores and some of them\n\n1126\n00:51:17.540 --> 00:51:17.960\njust\n\n1127\n00:51:17.960 --> 00:51:22.040\ndidn't need three people every hour of every day.\n\n1128\n00:51:22.040 --> 00:51:26.970\nAnd so I sat actually in this office with our founder, it was his office at the\n\n1129\n00:51:26.970 --> 00:51:27.560\ntime, and\n\n1130\n00:51:27.560 --> 00:51:31.480\nI pitched to him that we shouldn't have three person minimums in our stores.\n\n1131\n00:51:31.480 --> 00:51:36.240\nAnd he said, \"Okay, I know you've done the work, you've looked at all the data.\n\n1132\n00:51:36.240 --> 00:51:37.240\nOkay.\"\n\n1133\n00:51:37.240 --> 00:51:41.070\nWell, I went and pulled the big lever and I took them all down to two person\n\n1134\n00:51:41.070 --> 00:51:41.800\nminimums,\n\n1135\n00:51:41.800 --> 00:51:47.020\nbut our forecasting methodology wasn't appropriate, wasn't good enough to do\n\n1136\n00:51:47.020 --> 00:51:47.560\nthat.\n\n1137\n00:51:47.560 --> 00:51:52.040\nAnd it took me four weeks before I could reverse that decision.\n\n1138\n00:51:52.040 --> 00:51:57.020\nAnd the amount of pain and frustration I put autosoners through and the amount\n\n1139\n00:51:57.020 --> 00:51:58.400\nof dissatisfaction\n\n1140\n00:51:58.400 --> 00:52:03.260\nthat I put customers through, it was one of those things that have led to this\n\n1141\n00:52:03.260 --> 00:52:04.120\nphilosophy\n\n1142\n00:52:04.120 --> 00:52:07.880\nof evolution over revolution or testing.\n\n1143\n00:52:07.880 --> 00:52:12.160\nIf I had put it in 100 stores, we would have found out in two weeks that it\n\n1144\n00:52:12.160 --> 00:52:12.720\nwasn't the\n\n1145\n00:52:12.720 --> 00:52:14.480\nright thing to do.\n\n1146\n00:52:14.480 --> 00:52:15.720\nBut to me, that's what it's about.\n\n1147\n00:52:15.720 --> 00:52:17.760\nThey're all going to make mistakes.\n\n1148\n00:52:17.760 --> 00:52:22.090\nAnd think I don't want anybody to ever be afraid of is to make a mistake in a\n\n1149\n00:52:22.090 --> 00:52:22.800\nbusiness\n\n1150\n00:52:22.800 --> 00:52:24.400\ndecision.\n\n1151\n00:52:24.400 --> 00:52:26.560\nJust don't keep back in the same one.\n\n1152\n00:52:26.560 --> 00:52:30.610\nGo back and learn from those mistakes and figure out how it's going to affect\n\n1153\n00:52:30.610 --> 00:52:32.840\nyour decision-making.\n\n1154\n00:52:32.840 --> 00:52:34.360\nWho else are you going to listen to?\n\n1155\n00:52:34.360 --> 00:52:37.760\nHow are you going to bring people together to evaluate the decision?\n\n1156\n00:52:37.760 --> 00:52:41.240\nBecause I was painful and it was 100% on me.\n\n1157\n00:52:41.240 --> 00:52:45.040\nYes, and it turned out to be a huge advantage in the end.\n\n1158\n00:52:45.040 --> 00:52:49.440\nAnd so many times those failures are sort of blessings in disguise.\n\n1159\n00:52:49.440 --> 00:52:52.790\nBill, this has been so much fun and I want to have some more with the lightning\n\n1160\n00:52:52.790 --> 00:52:53.120\nround\n\n1161\n00:52:53.120 --> 00:52:54.120\nof questions.\n\n1162\n00:52:54.120 --> 00:52:55.640\nAre you ready for this?\n\n1163\n00:52:55.640 --> 00:52:56.640\nSure, David.\n\n1164\n00:52:56.640 --> 00:52:57.640\nOkay.\n\n1165\n00:52:57.640 --> 00:53:01.040\nWhat are three words others would use to describe you?\n\n1166\n00:53:01.040 --> 00:53:06.760\nI would say competitive, detailed, and relentless.\n\n1167\n00:53:06.760 --> 00:53:10.720\nIf you could be one person for a day beside yourself, who would it be and why?\n\n1168\n00:53:10.720 --> 00:53:14.770\nDavid, I learned this from my mom and dad and this is an unconventional answer\n\n1169\n00:53:14.770 --> 00:53:15.120\nif you\n\n1170\n00:53:15.120 --> 00:53:16.320\ndon't mind.\n\n1171\n00:53:16.320 --> 00:53:18.960\nMy parents taught me no idols.\n\n1172\n00:53:18.960 --> 00:53:21.800\nAnd they said, you know, like in junior high school, you look around, you've\n\n1173\n00:53:21.800 --> 00:53:22.760\ngot the great\n\n1174\n00:53:22.760 --> 00:53:25.040\nlooking kids, you've got the great athletes.\n\n1175\n00:53:25.040 --> 00:53:28.560\nMy parents said, you can't be that person.\n\n1176\n00:53:28.560 --> 00:53:34.000\nI want you to go focus on being the best Bill Rhodes that you can be.\n\n1177\n00:53:34.000 --> 00:53:35.560\nYou're never going to be the best athlete.\n\n1178\n00:53:35.560 --> 00:53:37.400\nYou're never going to be the most handsome.\n\n1179\n00:53:37.400 --> 00:53:40.400\nBut just go be the best you that you can be.\n\n1180\n00:53:40.400 --> 00:53:43.320\nAnd so I spend every day saying, I don't want to be anybody else.\n\n1181\n00:53:43.320 --> 00:53:48.710\nGod has blessed me so many times over with the skills, capabilities, talents,\n\n1182\n00:53:48.710 --> 00:53:49.360\npassions\n\n1183\n00:53:49.360 --> 00:53:51.600\nand people that I've been blessed with.\n\n1184\n00:53:51.600 --> 00:53:53.120\nAnd so I don't want to be anybody else.\n\n1185\n00:53:53.120 --> 00:53:54.120\nFair enough.\n\n1186\n00:53:54.120 --> 00:53:55.560\nWhat's your biggest pet peeve?\n\n1187\n00:53:55.560 --> 00:53:58.240\nPeople with a victim mentality.\n\n1188\n00:53:58.240 --> 00:54:00.120\nDon't tell me why you can't.\n\n1189\n00:54:00.120 --> 00:54:03.080\nDon't tell me why you got this disadvantage.\n\n1190\n00:54:03.080 --> 00:54:06.880\nTell me what talents and capabilities you have as an individual.\n\n1191\n00:54:06.880 --> 00:54:11.680\nSo let's figure out how best to leverage those and make you be all you can be.\n\n1192\n00:54:11.680 --> 00:54:14.600\nWhat's the last thing you bought at AutoZone for your car?\n\n1193\n00:54:14.600 --> 00:54:16.040\nIt was a pickup tool.\n\n1194\n00:54:16.040 --> 00:54:19.560\nI just bought it in Mexico two weeks ago.\n\n1195\n00:54:19.560 --> 00:54:23.200\nIf I got in your car and turned on the radio, what would I hear?\n\n1196\n00:54:23.200 --> 00:54:27.960\nThe message to Christian radio station on SiriusXM.\n\n1197\n00:54:27.960 --> 00:54:30.520\nWhat's your lowest round of golf and wear?\n\n1198\n00:54:30.520 --> 00:54:35.000\n64 Edmund Orgel golf course in Millington, Tennessee.\n\n1199\n00:54:35.000 --> 00:54:37.560\nA hundred years ago when I could play the game.\n\n1200\n00:54:37.560 --> 00:54:40.160\nWhat's something about you that few people would know?\n\n1201\n00:54:40.160 --> 00:54:43.280\nI think that I have a massive fear of failure.\n\n1202\n00:54:43.280 --> 00:54:45.400\nI think that drives me as much as anything.\n\n1203\n00:54:45.400 --> 00:54:47.680\nI don't like to lose.\n\n1204\n00:54:47.680 --> 00:54:50.160\nAnd I don't like the embarrassment of failure.\n\n1205\n00:54:50.160 --> 00:54:53.430\nAnd I've had it so many times in my life that I know what it tastes like and I\n\n1206\n00:54:53.430 --> 00:54:53.840\ndon't\n\n1207\n00:54:53.840 --> 00:54:54.840\nlike to go there.\n\n1208\n00:54:54.840 --> 00:54:58.810\nYeah, it's interesting that you don't want to have people afraid to make\n\n1209\n00:54:58.810 --> 00:54:59.560\nmistakes in\n\n1210\n00:54:59.560 --> 00:55:02.760\nyour company, yet you have this massive fear of failure.\n\n1211\n00:55:02.760 --> 00:55:05.240\nHow do you deal with those two things?\n\n1212\n00:55:05.240 --> 00:55:08.910\nOne of the things that happened to me over the years is I was trained as an\n\n1213\n00:55:08.910 --> 00:55:09.800\naccountant,\n\n1214\n00:55:09.800 --> 00:55:13.000\nwhich is a low risk kind of role.\n\n1215\n00:55:13.000 --> 00:55:17.680\nAnd I would say in my first decade, I was a pessimist.\n\n1216\n00:55:17.680 --> 00:55:22.000\nAnd then I moved into these leadership roles and you can't lead people and be a\n\n1217\n00:55:22.000 --> 00:55:22.840\npessimist.\n\n1218\n00:55:22.840 --> 00:55:27.740\nAnd so I've become this ultimate optimist that I can find opportunity in\n\n1219\n00:55:27.740 --> 00:55:28.880\neverything that's\n\n1220\n00:55:28.880 --> 00:55:30.640\nin front of us.\n\n1221\n00:55:30.640 --> 00:55:34.680\nAnd then the other thing that I would say, one of the traits that I've really\n\n1222\n00:55:34.680 --> 00:55:35.320\npicked up\n\n1223\n00:55:35.320 --> 00:55:40.800\non mainly since the pandemic built is this notion of executive courage.\n\n1224\n00:55:40.800 --> 00:55:45.900\nThe executives that are willing to take 60% of the necessary information and\n\n1225\n00:55:45.900 --> 00:55:46.600\nthey're willing\n\n1226\n00:55:46.600 --> 00:55:50.520\nto make a decision and decide on a path forward.\n\n1227\n00:55:50.520 --> 00:55:55.160\nBecause if you have 60% of the information, you have your intuition.\n\n1228\n00:55:55.160 --> 00:55:59.320\nIf you make a decision, I believe 80% of them are going to be right and you're\n\n1229\n00:55:59.320 --> 00:56:00.160\ngoing to do\n\n1230\n00:56:00.160 --> 00:56:01.160\nterrific.\n\n1231\n00:56:01.160 --> 00:56:06.040\nI believe 15% of them were the wrong decision to make.\n\n1232\n00:56:06.040 --> 00:56:09.220\nBut because of your commitment and the team's commitment to it, you're going to\n\n1233\n00:56:09.220 --> 00:56:09.640\nmake it\n\n1234\n00:56:09.640 --> 00:56:10.800\nwork.\n\n1235\n00:56:10.800 --> 00:56:14.440\nAnd then about 5% of the time you're going to realize, oh, that was a really\n\n1236\n00:56:14.440 --> 00:56:15.320\nbad decision.\n\n1237\n00:56:15.320 --> 00:56:16.320\nRaise your hands.\n\n1238\n00:56:16.320 --> 00:56:17.760\nI say, we can't do that.\n\n1239\n00:56:17.760 --> 00:56:20.040\nLet's we got to go back and we own it.\n\n1240\n00:56:20.040 --> 00:56:21.760\nLet's clean it up and let's fix it.\n\n1241\n00:56:21.760 --> 00:56:25.550\nYou know, we've talked about your dad in this conversation and they called him\n\n1242\n00:56:25.550 --> 00:56:26.360\nthe big man\n\n1243\n00:56:26.360 --> 00:56:27.360\nas I understand it.\n\n1244\n00:56:27.360 --> 00:56:30.240\nYou live large with humility and grace.\n\n1245\n00:56:30.240 --> 00:56:34.200\nAs you think about your own legacy, what words do you want people to use when\n\n1246\n00:56:34.200 --> 00:56:35.160\nthey describe\n\n1247\n00:56:35.160 --> 00:56:37.520\nhow you show up as a leader?\n\n1248\n00:56:37.520 --> 00:56:39.160\nMy dad was the big man.\n\n1249\n00:56:39.160 --> 00:56:42.400\nHe's about 280 pounds, 6'5\".\n\n1250\n00:56:42.400 --> 00:56:44.680\nHe lost some weight for at one point in time.\n\n1251\n00:56:44.680 --> 00:56:46.680\nMy friends started calling him medium man.\n\n1252\n00:56:46.680 --> 00:56:51.480\nOne of the greatest traits that I would say about my dad and I said it when I\n\n1253\n00:56:51.480 --> 00:56:52.120\nwas given\n\n1254\n00:56:52.120 --> 00:56:54.240\nmy part of his funeral.\n\n1255\n00:56:54.240 --> 00:56:59.080\nI never met anybody that didn't have an enemy.\n\n1256\n00:56:59.080 --> 00:57:01.280\nNever met anybody that everybody loved.\n\n1257\n00:57:01.280 --> 00:57:04.240\nAnd I know that's not the case with me.\n\n1258\n00:57:04.240 --> 00:57:07.720\nBut that was the most incredible thing about my dad.\n\n1259\n00:57:07.720 --> 00:57:13.670\nWhat I want people to think about me is that I left this wonderful place, the\n\n1260\n00:57:13.670 --> 00:57:14.560\nworld, better\n\n1261\n00:57:14.560 --> 00:57:16.360\nthan I found it.\n\n1262\n00:57:16.360 --> 00:57:22.110\nI helped AutoZone not why I was here, but I helped be part of a team that set\n\n1263\n00:57:22.110 --> 00:57:23.200\nup AutoZone\n\n1264\n00:57:23.200 --> 00:57:26.520\nfor the next decades of success.\n\n1265\n00:57:26.520 --> 00:57:30.840\nI tried to live according to my values every day.\n\n1266\n00:57:30.840 --> 00:57:32.840\nI'm a sinner saved by the grace of God.\n\n1267\n00:57:32.840 --> 00:57:37.360\nI fall short, but I want everybody to realize I'm doing what I can do.\n\n1268\n00:57:37.360 --> 00:57:39.960\nI'm being the best me that I can be.\n\n1269\n00:57:39.960 --> 00:57:44.750\nAnd what's one piece of advice, last question here that you'd give to aspiring\n\n1270\n00:57:44.750 --> 00:57:45.640\nleaders?\n\n1271\n00:57:45.640 --> 00:57:47.480\nHave courage.\n\n1272\n00:57:47.480 --> 00:57:49.480\nBe willing to make decisions.\n\n1273\n00:57:49.480 --> 00:57:53.080\nYou can get paralyzed by the fact you may not know everything.\n\n1274\n00:57:53.080 --> 00:57:56.480\nUse your intuition and then go make it successful.\n\n1275\n00:57:56.480 --> 00:57:57.920\nYou've got to lead through people.\n\n1276\n00:57:57.920 --> 00:58:00.320\nYou've got to listen to people.\n\n1277\n00:58:00.320 --> 00:58:01.400\nBuild a team.\n\n1278\n00:58:01.400 --> 00:58:06.040\nHave consensus oriented decision making, but don't be afraid to make a decision\n\n1279\n00:58:06.040 --> 00:58:06.040\n.\n\n1280\n00:58:06.040 --> 00:58:08.680\nBill, you are one great guy.\n\n1281\n00:58:08.680 --> 00:58:12.400\nJust knowing how hard it is to drive culture, keep it alive.\n\n1282\n00:58:12.400 --> 00:58:16.680\nYou know, what you're doing in AutoZone is just world class.\n\n1283\n00:58:16.680 --> 00:58:20.880\nAnd you live it every day and you are making a better AutoZone for the future.\n\n1284\n00:58:20.880 --> 00:58:24.810\nSo congratulations on everything you've done and everything that I know is\n\n1285\n00:58:24.810 --> 00:58:25.520\ngoing to happen\n\n1286\n00:58:25.520 --> 00:58:28.720\nbecause of your leadership and the leadership of your team.\n\n1287\n00:58:28.720 --> 00:58:29.720\nThank you, David.\n\n1288\n00:58:29.720 --> 00:58:33.320\nAs you know, these kind of jobs, they're team sports.\n\n1289\n00:58:33.320 --> 00:58:35.520\nAnd I get a lot of the credit that I don't deserve.\n\n1290\n00:58:35.520 --> 00:58:39.770\nI have the most phenomenal team that I get the honor of working with every\n\n1291\n00:58:39.770 --> 00:58:40.680\nsingle day.\n\n1292\n00:58:40.680 --> 00:58:42.640\nAnd that's the secret of our success.\n\n1293\n00:58:42.640 --> 00:58:53.480\nI just love Bill.\n\n1294\n00:58:53.480 --> 00:58:54.480\nHe's the real deal.\n\n1295\n00:58:54.480 --> 00:58:55.480\nHe's smart.\n\n1296\n00:58:55.480 --> 00:58:56.480\nHe's humble.\n\n1297\n00:58:56.480 --> 00:59:00.000\nAnd he's clearly a leader who knows how to take people with him.\n\n1298\n00:59:00.000 --> 00:59:04.170\nI mean, when he told that story of his decision to reduce staff and stores and\n\n1299\n00:59:04.170 --> 00:59:05.280\nthe awful impact\n\n1300\n00:59:05.280 --> 00:59:11.210\nit had, boy, you could just hear the sorrow in his voice still after all these\n\n1301\n00:59:11.210 --> 00:59:12.080\nyears.\n\n1302\n00:59:12.080 --> 00:59:16.270\nBut you know, what's amazing about that story is it led him to a better\n\n1303\n00:59:16.270 --> 00:59:17.160\nstrategy.\n\n1304\n00:59:17.160 --> 00:59:22.970\nHe calls it evolution over revolution and is such a smart way to roll out new\n\n1305\n00:59:22.970 --> 00:59:23.840\nideas.\n\n1306\n00:59:23.840 --> 00:59:27.820\nBut more than that, Bill's story should remind us that leadership is a\n\n1307\n00:59:27.820 --> 00:59:29.280\nprivilege and great\n\n1308\n00:59:29.280 --> 00:59:33.200\nleadership only happens when you value those you lead.\n\n1309\n00:59:33.200 --> 00:59:37.960\nThat respect can drive you to make better decisions and to truly learn from the\n\n1310\n00:59:37.960 --> 00:59:38.720\ndecisions\n\n1311\n00:59:38.720 --> 00:59:40.800\nthat aren't so great.\n\n1312\n00:59:40.800 --> 00:59:46.640\nNow Bill, to his credit, has had a lot more good decisions than bad ones.\n\n1313\n00:59:46.640 --> 00:59:50.200\nBut the important thing is he learns from both.\n\n1314\n00:59:50.200 --> 00:59:54.680\nNow normally at this point, I offer you some coaching for your week.\n\n1315\n00:59:54.680 --> 00:59:58.520\nBut to be honest with you, I can't just sit here and tell you to value your\n\n1316\n00:59:58.520 --> 00:59:58.760\nteam.\n\n1317\n00:59:58.760 --> 01:00:02.760\nThat's got to be a genuine thing that comes from your heart.\n\n1318\n01:00:02.760 --> 01:00:07.560\nBut I can tell you this, get to know your people, pinpoint their strengths, get\n\n1319\n01:00:07.560 --> 01:00:08.240\ninterested\n\n1320\n01:00:08.240 --> 01:00:10.600\nin what they're interested in.\n\n1321\n01:00:10.600 --> 01:00:12.240\nAnd what makes them tick.\n\n1322\n01:00:12.240 --> 01:00:17.040\nWhen you do, that respect just naturally follows and people will know how much\n\n1323\n01:00:17.040 --> 01:00:18.920\nyou value them.\n\n1324\n01:00:18.920 --> 01:00:24.840\nSo ask yourself, what do I need to do this week to deepen the respect for those\n\n1325\n01:00:24.840 --> 01:00:25.440\nI lead\n\n1326\n01:00:25.440 --> 01:00:28.600\nand to make sure my team knows it.\n\n1327\n01:00:28.600 --> 01:00:32.200\nLean into those questions and I know you're going to engage your team and\n\n1328\n01:00:32.200 --> 01:00:33.200\naccomplish big\n\n1329\n01:00:33.200 --> 01:00:34.800\nthings together.\n\n1330\n01:00:34.800 --> 01:00:36.760\nSo do you want to know how leaders lead?\n\n1331\n01:00:36.760 --> 01:00:40.800\nWhat we learned today is the great leaders value those they lead.\n\n1332\n01:00:40.800 --> 01:00:45.240\nComing up next week on How leaders lead is Junior Bridgeman, former NBA player\n\n1333\n01:00:45.240 --> 01:00:45.800\nand one\n\n1334\n01:00:45.800 --> 01:00:48.720\nof the greatest entrepreneurs in the world.\n\n1335\n01:00:48.720 --> 01:00:52.560\nIt was never about the number of stores.\n\n1336\n01:00:52.560 --> 01:00:58.600\nIt was never about trying to have a company that was X, Y, and S.I.S.\n\n1337\n01:00:58.600 --> 01:01:04.470\nIt was always about trying to present more opportunities for people to better\n\n1338\n01:01:04.470 --> 01:01:05.640\ntheir lives.\n\n1339\n01:01:05.640 --> 01:01:10.550\nI think it's a Kenyan proverb that if you want to go fast, go by yourself, but\n\n1340\n01:01:10.550 --> 01:01:11.080\nif you\n\n1341\n01:01:11.080 --> 01:01:14.280\nwant to go far, go with other people.\n\n1342\n01:01:14.280 --> 01:01:19.320\nAnd so ours was always about bringing people along to improve their lives so\n\n1343\n01:01:19.320 --> 01:01:20.080\nthey could\n\n1344\n01:01:20.080 --> 01:01:24.840\nmake more money so that they could better their lives.\n\n1345\n01:01:24.840 --> 01:01:28.200\nThanks again for tuning in to another episode of How leaders lead where every\n\n1346\n01:01:28.200 --> 01:01:28.960\nThursday you\n\n1347\n01:01:28.960 --> 01:01:33.360\nget to listen in while I interview some of the very best leaders in the world.\n\n1348\n01:01:33.360 --> 01:01:37.250\nI make it a point to give you something simple on each episode that you can\n\n1349\n01:01:37.250 --> 01:01:38.080\napply to your\n\n1350\n01:01:38.080 --> 01:01:41.320\nbusiness so that you will become the best leader you can be.\n\n1351\n01:01:41.320 --> 01:01:51.320\n[BLANK_AUDIO]\n\n1352\n01:01:51.320 --> 01:02:01.320\n[BLANK_AUDIO]","

David Novak 0:04

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learnings so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. My guest today is Bill Rhodes, who has been the CEO of AutoZone. Since 2005. Now get this Autozone is one of the only companies around who has grown both their earnings per share and their revenue every year for the past 20 years. Boy, I gotta tell you, that kind of consistency is remarkable. Not just remarkable, it's amazingly remarkable. But there's no way bill is going to take the credit for it. I don't care how hard you try to get him to do it. It's just not gonna happen. For him. It's all about his team, and what they can do together. He's got this deep and genuine admiration for his people who he calls autos owners, that respect drives, how he makes decisions, how he implements new ideas, how he finds and trains, talent, and a whole lot more. When we truly respect those we lead. We see leadership for the privilege, it really is. It's the secret to getting big things done, and to getting the kind of growth we all want to have. So hey, let's get right down to it. Here's my conversation with my good friend and soon to be yours, Bill Rhodes.

Bill, it's great to have you on the show.

Bill Rhodes 1:38

So great to be with you. And thank you for the mission of how leaders lead. I am a consumer of your program and have enjoyed it thoroughly. It's a great way to go out on a run and think about something other than the pain.

David Novak 1:52

That's great. You know, I have to tell you, you know, listening to your voice here, you're Sam Elliot, you got the mustache you got the beard you sound exactly like Sam Elliott,

Bill Rhodes 2:02

and it's all gray. And I guess that's why my voice is so raspy too many years David too many years.

David Novak 2:08

I really can't wait to get into how you lead and talk about the great job that you've done at Autozone. But first at the time of this recording, it's the new NBA season it's just beginning and as one of the owners of the Memphis Grizzlies which I know you are, what's it feel like snowing you get to watch John Moran dunk on all the people for the next several months. That's got to be fun. Yeah, they've

Bill Rhodes 2:31

been I might minuscule owner of the Memphis Grizzlies. But myself and several other MIP Ian's when there was a an ownership change a number of years ago almost a decade ago now. All came together to make sure that we secured the Memphis Grizzlies in our great hometown of Memphis, Tennessee. I've really enjoyed my association with the Grizzlies. John Moran is like none other to watch. But our front office now is really fantastic. He's got a lot of great players around him. And there's nothing. There is nothing that brings the citizens of Memphis together like the Memphis Grizzlies. That is

David Novak 3:07

great. And you had a great run last year that teams coming together. So it'll be a lot of fun. You know, what did the Grizzlies taught you or reinforced about leadership just just watching it all unfolds?

Bill Rhodes 3:18

We have a couple of leaders of the organization, Jason Wexler is the CEO of the Grizzlies. And Zach Kleiman was the youngest GM of the Grizzlies. And these are two non traditional, these are not long term basketball guys, but they've come in and they brought innovation. They brought data and data analysis and they made some really great decisions like picking John Moran number two in the NBA Draft coming out of Murray State.

David Novak 3:45

I'm looking at you and and you got your red Autozone shirt on you got your name badge. I'd say your true blue but I think you're actually true red.

Bill Rhodes 3:54

Yes, sir. My blood bleeds Autozone read. It's Monday. It's Monday at the store support center. Now listen, I didn't say the headquarters. I didn't say the corporate office. It's Monday at the store Support Center. everyone hears role is how do we best support our stores. We just finished our four and a half hour executive committee meeting where everyone is dressed just like me. And everyone in this building is dressed just like me. On Mondays we wear our store uniforms in solidarity with the most important people in our company, which are the people in our stores and our distribution centers who are closer to the customer and taking care of the customer every day. Everybody has recognition pens, as you know as a leader, a huge part of of leading an organization is recognition. And we do it on a regular basis. The one on my right color is a shrink Buster pin. How do we control shrink or loss in the company something I earned when I was a divisional vice president back in 2000 I believe it was the top left on my left hand side is the lib the pledge pin everybody who goes through their first day of orientation at Autozone, we call Foundation's gets a live the pledge pin. And they should put it on their uniform or dress code, as we call it every single day, and have a recommitment to living the AutoZone pledge. Do you know the AutoZone pledge? David?

David Novak 5:22

Well, no, you tell me, I think I have an idea of what it is.

Bill Rhodes 5:25

So whenever five or more of us are gathered, including my executive committee meeting at 10 o'clock Central Today, we begin the meeting by all standing up and clapping. And then we spell AutoZone, a UTOZONE, who's the best Autozone who's number one, the customer Autozone has always put customers first. We know our parts and products, our stores look great. We got the best merchandise at the right price. So this pin signifies to 112,000 people every morning when they're getting dressed, what it means to be an AutoZone. And that's to live that pledge that like everything else at Autozone always starts with the customer.

David Novak 6:08

When I was young, we had a young chair, but you've taken it to a whole different level with your pledge. It's a lot of fun to start those meetings for that year in it. Oh,

Bill Rhodes 6:18

it's it's awesome. You know, it's it's interesting, and it was not created here. Our founder was on the board of Walmart, BARDA best practice from somebody else. We do it as well, if not better than anybody else. But think about being in a meeting setting and how many people come in some of what you're late, many of what you're at low energy, or they're focused on their phone or something else. And instead, they have to stop everything that they're doing. Stand up, raise the energy level of the entire organization that's in that room. And also, you know what, if you get there after the Sheeran pledge, everybody knows you were late. I was gonna do one more thing with you. And that's this pin. It's a service pin, every AutoZone, from their first anniversary on gets recognized for the years of service. And you know, in today's society, many people say people will stay with organizations a long time, you'll notice my pen is a 27 year pen. And about six weeks, I'll be celebrating my 28th anniversary with AutoZone. Here's a crazy statistic. We have our CEO team, which is the vice president of the organization. As of today, I rake a tent out of 63 people in tenure, at almost 28 years,

David Novak 7:33

I got to ask you, how do you do that? I mean that nobody has that kind of tenure.

Bill Rhodes 7:38

I think it's the AutoZone culture. First of all, I think we're incredibly selective of people. I have a saying that Autozone is not right for everybody. And everybody is not right for AutoZone. And that's okay. We're pretty unique. How many people feel comfortable doing a cheer and applaud how many people feel comfortable wearing the uniform? How many people want to get as passionate as we do about our business? And if they're not that kind of person. If they're not competitive, they don't like to win, they need to go somewhere else because this wouldn't be the place for them.

David Novak 8:12

I gotta ask you, how did you first get introduced AutoZone.

Bill Rhodes 8:16

Great story. So I was a CPA coming out of college, went to grad school at University of Memphis and got an MBA. And from there I was recruited to Ernst and Young to be an intern that ended up resulting in a full time job. But I was with Ernst and Young Ernst and Whinney Ernst and Young for about six and a half years, the first client that I ever worked on, at Ian, who at the time was Malone, and Hyde. And was the divestiture of Malone and Hyde, which was the parent company of AutoZone. So I worked on that originally, then went away for about a year. And in preparation for auto zones, initial public offering in 1991. I came on maybe a couple of years before that, and worked on the AutoZone account. So I spent five years or so I would spend three or four months a year at Autozone. And it's in my hometown of Memphis, Tennessee. And I liked the culture, I love the competitiveness of the culture. I liked the fact that I had to wear a tie to to work everyday like I did it and why I love the people. I looked at the business model and saw how successful the business model and how sustainable it was. And so December of 1994, I was asked to come to Autozone as the manager of inventory accounting, and I had five people on my team. And the rest, as they say is history. Who did you interview with Bill, I interviewed with three people I interviewed with the Chief Financial Officer gunning Chuck Bell, who was also an E and y alumni. And I interviewed with a guy that was going to be my new boss, Richard Adams. And then the last interview that I had was with a gentleman by the name of Pitt Hyde, and Pitt Hyde was the founder of AutoZone, who I had never met before. Until now. Maybe six weeks before this whole interview process. And you know, and for the last 28 years, Pitt has been a huge mentor piton, his wife, Barbara, or mine, and my wife's Amy's philanthropic mentors. And he's a dear friend, and certainly a confidant to help me think through some things from time to time,

David Novak 10:20

did pit give you any coaching, when you had that interview with him?

Bill Rhodes 10:23

He didn't give me coaching. But at the end of the interview, he allowed me to ask him three questions. Or he said, Would you have any questions? I said, Yes, sir. Do you know where my office is going to be? And he said, No, son, you won't have an office, but we really don't know exactly what you're going to do yet. So we don't know where your cubicle will be. He said, Well, anything else? I said, Yes, sir. Do you know what my title will be? And he said, No, we don't know what your title would be. We're still trying to figure it out. We're trying to enhance the finance and accounting staff and we think you'd make a good addition. I said, Okay, said anything else? I said, Yes, sir. How much money am I gonna make? And he said, Son, you're way too into the details. You need to decide if you want to be an auto zona, and if you do, everything else will take care of itself. And boy, no Truer words were ever spoken.

David Novak 11:12

I love it, you know. And then, you know, at age 39, you become the youngest fortune 500 CEO. Tell us a story of when you got that news.

Bill Rhodes 11:23

Well, what an interesting time. So back up just a little bit. It was the week after spring break. And I'd been on a skiing trip with my family and had a bad skiing accident on Wednesday, spent all day Thursday in the hospital. With a severe concussion, we ended up coming home so that I could get some rest. And I started fun and out on Friday night, sorry, Saturday night that I may need to come back to Memphis because something was going on. But I didn't know. So I got up Sunday morning, got ready to go do whatever I needed to do. There was some discussion, I might need to go to New York that day, whatever. I got up at about five o'clock and was ready to go to work, do whatever I needed to do, that day kept ticking on. So finally I said, Well, I'm gonna go to church, I went to church with my family and had a quick lunch and came back home and was waiting. At about four o'clock that afternoon, our founder called me our CEO that preceded me, had decided to go to Office Depot as the Chairman and CEO. And the board had met that weekend got on a surprise thing. And it selected me to be the president and CEO. And our founder, who was the one that called me at four o'clock on Sunday afternoon, they decided that he would come back as the chairman of the board on an interim basis. And so it was very fortunate for me that here's this mentor of mine, that's going to come back and help me through this massive change. But that's how I found out

David Novak 12:49

wow, that's a great story. Did you feel any pressure bill being so young? Or were you old enough to even know the difference?

Bill Rhodes 12:56

Oh, as you can see, David and others can't. I always looked so much older than I was that it frankly, in all candor, it was a benefit to me whether I was at Ernst and Young or at Autozone, I might have looked 10 or 15 years older than I was. And it was funny. We went to this party of retirement celebration or departure celebration for the previous CEO. And I went with Pitt. And he looked around, he said, I'm so tired of people asking me what I'm doing putting a 39 year old in the role. And he said, What they don't realize was I became the CEO, Pitt became the CEO of Malone, and hide his grandfather's company, a New York Stock Exchange company at the age of 26. He was the youngest ever CEO of a New York Stock Exchange company at the time for years. He had confidence in me. And that certainly helped. And I would say age never played a part for me. But our business was in a tough spot at the time. We announced simultaneously with me becoming the CEO and Pittcon back, then our same store sales were down 7%. You know what that means? That's not good. We ended the quarter down 5% The worst performance in the company's history. So I was scared, but it wasn't because of my age,

David Novak 14:16

you joined the company as a CEO, in 2005. Talk about the business that you inherited when you were CEO. And what you're leaving today, just give us a little snapshot.

Bill Rhodes 14:28

I've been at the company for 10 years and four months. I've been around the company for 15 and a half years or so. So it was a company that I knew very, very well. But we were going through a tough spot. We've made some changes. A lot of them worked. Some of them didn't just like always, but we were in a spot where we were underperforming in a pretty significant way. When I became the CEO, which was frankly very fortunate because it allowed this new team, that executive committee at the time to come together and really say what is working, what's not working, what needs to be tweaked. And within a matter of a couple of months, the new team had come together and, and put together a new strategy. Now, it could have very easily been marketed as back to the basics. But as you know, if you want to inspire people, you don't talk about going back to anything. So we coined it live the pledge, that pledge I shared with you earlier, this pin was a product of that strategy. And so we came to our big national sales meeting and said, Look, folks, here are the things we're gonna do. And they were very simple basics of this business. But they left the room and left the meeting with a level of confidence, a confidence that they could go make it happen, because as our founders father said, No individual builds a business, the individual builds an organization, and the organization builds a business. And we had to motivate and inspire and engage and get people excited about what we could do together. And, you know, it certainly wasn't a quick turnaround, we quickly stabilize the sales of the organization. But it was about three more years before we really saw some significant growth.

David Novak 16:15

What's the scope of your company today,

Bill Rhodes 16:18

today, we will pass 7000 locations stores, the majority of them, about 60 to 50, are in the US a little over 700 in Mexico and 70. In Brazil, we have 112,000 people, we don't call them employees, because they're special. We call them auto Zoners. We just finished our fiscal year at the end of August, we did $16.3 billion in sales, we made about 3.2 $3.3 billion dollars in EBIT or operating profit. It's a terrific business model, in a great industry, with the most fabulous people executing it.

David Novak 16:57

And you have a great retail and commercial business, and how do you think about the growth of each business? And how have you structured the company to attack both those opportunities.

Bill Rhodes 17:08

The company started on July 4 1979, the most American company on the most American Day, but we started only as a retailer. So our founder was in the wholesale grocery business. So think of being the supply chain for the independent grocers in the 70s. And Pitt saw that that future probably wasn't very bright. So he diversified the organization. He got into drug distribution, running some grocery stores, got into sporting goods, retailing, got into drug storytelling. So several different things in the last one that they got in was autoparts. But solely as a retailer, fast forward 17 years to 1996. And they said, Look, we're servicing part of the market and frankly, the smaller part of the market. Why don't we open it up a lot of the same inventory. The same stores can be distribution points for the commercial market. So in 1996, we started the commercial business. I just mentioned that we finished last fiscal year with $16 billion in sales, the majority of it was in US retail, but about 40% Now $4 billion dollars a year as in our wholesale business, our US retail businesses, our most important strategic priority. Our commercial business is our greatest growth opportunity in the middle long term. And then we have an international strategy today that is about Mexico. And now Brazil,

David Novak 18:35

you have 112,000 team members and you say those 112,000 people are not employees. They're autos, owners. You obviously you have a lot of pride in one of the things that I noticed about you, Bill, you know, we both were at a golf outing, and there are a lot of very good golfers fun guys around but I noticed you spent I would say almost as much time talking to the staff. I mean, you're really into the front line. I mean, where did that get into your DNA.

Bill Rhodes 19:03

It's like first started with my mom and dad who I learned all my values from. But my dad was a regional manager for Terminix. He was always a people person. My dad wanted to be a coach. He played sports and High School in college and he always wanted to be a coach. He ended up being a coach but doing pest control instead of being on fields. And then I would also say Autozone has taught me that Autozone we can't be successful at Autozone without every single person on our team, every single autos RV and engaged and when I think about some of the unspoken values at Autozone. There are two that I think are at the forefront. One is humility. The other one is empathy. What we ask our people to do every single day, you think about most sectors or retail. People are walking in the store because they want to buy some Kentucky Fried Chicken or they want to buy a taco Oh, there are the ones who go to Best Buy and buy a TV that they've been saving up for. And AutoZone. They're walking in the store many times because they got up that morning on their way to work, and their car won't start. And they're going to have to spend 100 $150, that they didn't plan on spending an hour AutoZone or Zoners, are at that pain point for the customer. And they're there to solve that problem. And so I've learned forever, that if you really want to understand what's missing in a business, or what we need to improve, you go straight to the front lines, and you deal with the people that are dealing with a customer every day, they know best. And then I just have tremendous respect for what they do. And frankly, they're just wonderful people, and I love to be around them, whether that's in an Autozone store, or at that event you were talking about.

David Novak 20:58

We'll be back with the rest of my conversation with Bill Rhodes in just a moment. You know, there's some leaders like Bill who are so good at building teams. When they talk, you can just hear how much they care about the people they lead. That comes through loud and clear in my conversation with John Calipari, head basketball coach at the University of Kentucky,

John Calipari 21:18

I'm trying to teach them that you're going to come across fame and fortune. The question is, what are you going to do with it? Do you know how to build joy within you? It's what you do for somebody else. It's not what you're gathering what you're dragging in. And so part of our pillars of what we want to do in our culture, is that it's not about winning basketball games. If we take care of everything else, we'll win our basketball games while the chance if we love on them, and they love on each other, we'll have a chance to win a national title. If you want to

David Novak 21:51

elevate your team and help them be at their best. Go listen to my conversation with Coach cow, Episode 22. Here on how leaders lead.

You talk about empathy and humility is a couple of your core values for your people. Is that what you described to be an AutoZone? Or what is an AutoZone? Or versus a typical employee?

Bill Rhodes 22:19

I think an Autozone is a problem solver. If somebody walks into our store, particularly on the retail side, and they say my car sounds like my car smells like my car shaking, they've got whatever the issue is, and our people take the time to listen to the customer. And understand what exactly is the problem, then we begin to try to or they begin to try to isolate where the problem is do we take a fixed finder and put it in your OBD two port and find out that you've got a problem with your downstream Oh, two sensor, they're problem solvers. And I just love it.

David Novak 22:56

I also understand that you have a practice at Autozone called Gotcha. Tell me about it and share a story that brings it to life

Bill Rhodes 23:03

go out to the customers automobile. That's what it stands for, you can walk into an Autozone store. And you can say, hey, my car is doing this, we encourage and incentivize our folks to go out of the store and go to the car. And that's where the problem is. And you can open the hood. And you can look and see oh my goodness, they think they have a bad battery. They don't have a bad battery, they get corrosion on their terminals. And we need to take the terminals off, clean the post, put some felt washers on there, put it back together. And there they go. They may have spent $3 when they thought they were going to spend $150 That's what gotcha is.

David Novak 23:46

Everybody you have coming to see you is not really looking forward to it. You know, that's a really a great point. And how have you really trained people on that notion, you've talked about a couple of things. But that is a very different orientation than most people would have with their customers. There are

Bill Rhodes 24:01

certainly people that come into our stores that are excited about accessorizing their store. But that's less than 20% of our business. Over 80% of our businesses either failure, water pump, starter alternator battery, my car won't run or maintenance, you know need new windshield wipers need brake pads or brake rotors, whatever the case may be. A lot of times we're hiring new autos owners that don't have automotive knowledge, we spent a ton of time and money creating training modules so that they can get up to speed. But more than anything else on the training front, we train them how to be an autos owner. And a big part of that is being a good listener being empathetic to the customer situation. And by the way, if you don't have the knowledge today to solve that customer's problem somebody else in the store does. It is just fine to raise your hand and say hey, hey David, can you help me with this? I've gotten over my head talking about us. Ma pumper, whatever the case may be,

David Novak 25:03

you know, excellent customer service is in the DNA of every great company. And you obviously have got this fantastic culture that you're you're so proud of that you use to really drive it. But what's the biggest challenge you face now and keeping that culture alive and keeping that customer service going, because it's not not easy. I mean, you're very upbeat, and optimistic and positive. But I hear a lot of people whining about how tough the work environment is, these days.

Bill Rhodes 25:30

It's the toughest labor market in my career. And frankly, it started before the pandemic. You know, there's been a lot of discussions about hourly wages and, and gaps in wages between certain parts of society. And there were real. And I began talking about it probably five years ago that the wage market was moving up much quicker than it had in the past. During the pandemic, obviously, there was a tremendous amount of economic stimulus, the that true stimulus or enhanced unemployment or child tax credit, PPP money, lots of different money that flowed into the economy. And as well been well documented, there was a significant amount of the population that left the workforce. I think the last time I saw it, now, we're, we're about 1%. Below, I think it was 63% versus 62, in the job penetration in the country. So it's been a very tough time for us to find people, particularly in our stores, and in particular in our distribution centers. But what we try to do is leverage our greatest asset, our greatest asset is our AutoZone. errs. And so we have a referral program that pays them significant amounts of money, a lot of you have been doing sign on bonuses, and we've tried those, and they might work here there, I tell you what has worked for us, and we've done it a long time. And we amped it up during the depths of COVID. And that's a referral bonus. Because, first of all, when an AutoZone, or puts their name on somebody else, they're going to put their name on if they believe that they're going to be a good AutoZone. And I think that that's really helped us. But we're still challenged with the labor situation, and staffing issues in our stores and distribution centers or in the other parts of the organization. But we're in a much different place today than we were, say, April of this year,

David Novak 27:24

every leader cast the shadow for their organization. And you know, I'm looking at GE right now. And as I mentioned earlier, your Autozone red and you got your name badge on and underneath that name badge. It says customer satisfaction, I think I think that's what I can read right there. How did that come to be? And as a leader, what do you do to really drive home that fact that customer satisfaction is what it's all about? Because you're obviously passionate about it?

Bill Rhodes 27:52

No question. So yes, it says customer satisfaction. I'll show you a copy of my business card that says Bill Rhodes chairman, president and chief executive officer, customer satisfaction. Every single Autozone are 112,000. Strong today, 12,000 of which are outside of the United States. Every single person has customer satisfaction in their title. I've talked a lot about our culture. As you can tell, I'm incredibly passionate about our culture. I want to be crystal clear. I didn't create this culture. Pitt had Peter Forman act, Linda Ireland, Tom Hanuman, those great leaders that came before us today. They created this culture, and they've instilled it into us to continue to nurture it and grow it and change it. With the times. I tell you, one of the toughest jobs that we as leaders at Autozone. Today have is as society changes, how do we change our culture, to keep up with society, while also and more importantly, making sure we have non negotiables those things that we will never change, like our dress code, like our uniform, as I call it, like customer satisfaction. I can remember talking to a new executive one time they said, you know, there's two things that really bothered me and they're they're just hokey. First of all, when we start a meeting, I've got to do it cheer and pledge. And second of all, why do I have customer satisfaction? On my business card? That's hokey. I say goes back to what I said earlier. Robin Hood is not right for everybody. And everybody's not right for AutoZone. And that's okay. Because if you can't buy into this culture, if you can't be passionate about this culture, you don't need to be here.

David Novak 29:34

So you have almost 7000 stores outside the United States, and I know you're killing it Mexico, what are the plans to grow the business internationally? And how do you decide where you're going to go to?

Bill Rhodes 29:45

Yeah, it's a very difficult decision. It was pretty easy for us. And again, I was not part of the decision to go to Mexico. But we had been on the border of Mexico for years, decades. And we saw how well our stores performed on the Mexican border, we also saw that they didn't perform nearly as well on the Canadian border where the climate is different, you know, the people working with their hands is not as normal. And so we decided, let's go to Mexico, we were already having to put most of our products in Spanish language as well as English. So it was a pretty easy decision for us wasn't easy in the beginning, when a lot of fits and starts and actually five years in, we looked at, should we stay, or should we leave, thank goodness, we decided to stay. And thank goodness, we continued to trust and support and resource our team down there because they built a really phenomenal business in Mexico. Now fast forward a few years later, we began to see the success of Mexico, we said where's next, and I was in a position, at that point time to help be part of a team that looked to where we go next. And we went to China and Taiwan and Canada and Poland and Hungary and Czech Republic and Brazil, and all these different places. And we ultimately decided on Brazil, it's not for the faint of heart, it's a tough place to do business, as you well know. But it's also has a tremendous population of people. There are also people that are inclined to do things, there's a lot of home improvement activities that happen there. And there were also some competitors down there that we saw that were doing very, very well. And so about 10 years ago, we made the leap of faith to go again, building out in Brazil. And as you can tell, I think we had 72 stores. At our last public reporting, we've taken our time, taking our time, because it's been hard, has not been easy, we had to make sure that first it worked for the customer. We proved that pretty quickly. The harder part was to prove that it worked for us and our shareholders, and it was a good economic venture. We tested it for about nine months before earlier this year, the board made the declaration, we were no longer in test mode. And it was now part of our growth strategy.

David Novak 31:59

I believe Autozone is one of the few and maybe the only company that I know of that has had both earnings per share growth and revenue growth for each year, the past 20 years, you know, what do you think, Bill is the key to driving that kind of consistent performance? What do you do to get that kind of consistency.

Bill Rhodes 32:19

So first of all, we're in a great industry, that's part of the growth story, you got to pick a great industry. Secondly, we've got a phenomenal team, everybody, throughout our organization, I talked about the tenure of this organization, we're going to have people that are passionate about this business, that are looking to grow in an industry. The other thing that I think we do here that some people think is too conservative, but I think for us, it's played out pretty well. You have to grow. And we have organic growth where we can grow our store, count two and a half 3% a year, and have for a long time and believe we can for quite a bit longer. But you also have to have innovation. And when you say innovation, so many people think about radical innovation, you know, we're gonna go create a new retail model, or we're gonna go radically changed what our stores carry, or what they look like. We believe at Autozone in incremental innovation, we call it evolution over revolution. And we say because with revolutionary innovation, the messes are a lot bigger. And it will challenge ourselves to get better every day, this whole notion of continuous improvement. And the notion that let's go test things. We have 7000 stores, you get a great idea. Let's go put it in 100 stores and prove that it's a great idea. We don't have to put it in 7000 stores. And when we do, almost inevitably we make a mistake and we have to go back and clean it up

David Novak 33:56

and doing my research and you mentioned your dad a little bit earlier. But my understanding is that he used to take you to work with him on Saturday. What were some of the big lessons you learned from just watching your dad in action?

Bill Rhodes 34:08

Yeah, I didn't go with him every Saturday, but he went almost every Saturday there and was one of the biggest lessons that I learned. Nobody was tapping his shoulder telling him he had to go to work. But he went to work every Saturday. You know what, what happened? As a result there of his branch managers were at work every Saturday. And it's a lesson dad taught me years and years ago. I'm sure you know who Kemmons Wilson is one of the great men peons who founded Holiday Inn. I never get the quote exactly right. But my dad beat this quote into my head, which was if you want to be successful, all you have to do is work half a day, every day. And it doesn't matter which 12 hours it is. You know today's society a lot of times we don't want to talk about the value of hard work. We want To talk many times about balance, you know, work life balance. And we have to make sure that in the work life balance that we don't forget the work part of it. And I always believe the harder you work the smarter you get. I think that that was one of the things that my father taught me amongst a ton of others. My dad, as I mentioned earlier, he was a coach's coach. And I could listen in sit in his office, I'd watch him print off these reports. And I'd watch him circle numbers. And then it seemed pick up the telephone and he'd start talking to every one of his branch managers. And he always found something positive to talk to them about. But they all knew at the end of the day, that was going to be one of those numbers that he was going to hone in on say, Hey, what are we doing on this front? How do we get better here? And this notion of continuous improvement, evolution over revolution, I think my dad taught me a lot of those lessons, you know, so

David Novak 35:52

let's fast forward a little bit. You go to the University of Tennessee Martin on a golf scholarship. And you get a degree in accounting, why accounting bill?

Bill Rhodes 36:02

Well, I wanted to be my dad, my dad was my hero. And he was a manager. So I knew I wanted to be in business. And so I got to UT Martin, and I went to, you know, started doing all the regular classes, and I would go to the business people, and I talked to them about the various majors that they had. And at the end of the day, I got talked into an accounting major. And I'll never forget this, as long as I live, went downstairs to the phone booth, because there were no phones in your room in the dormitory. And I stood in line to call my parents on a landline. And they both got on landlines at home. And we had a conversation about that said, Son, have you decided what you're going to major in? And I said, Yes, sir, I have. And he said, Okay, what is it? And I said, accounting? And he said, accounting? Why in the world would you want to be an accountant? They were like green armbands and green eyeshades and they sit in the corner by themselves and do numbers all day. That doesn't seem to be you to me. So well, that, here's why I picked it. They told me that it was the most difficult major in the business school at UT Martin. And so I said, I'll go do it. He said, That's good enough for me.

David Novak 37:17

That's great. I'll tell you what, if that doesn't tell you something about Bill Rhodes. I don't think anything. Well, I mean, you, you absolutely love a challenge, you know, and you're also an outstanding golfer in college. And as you look back in those college days in golf, what was the big challenge you had to overcome? And that just to be able to compete?

Bill Rhodes 37:36

Yeah, I love my days in college, and I love playing for University of Tennessee at Martin. And my coach Grover Paige, who was very requiring, I loved it. I played really well, my first couple of years. And then my junior year, I did not play well at all. In fact, my coach, Coach Paige taught me after my junior year and said, you know, you're not performing well, I'm gonna take at least half your scholarship away. Going into your senior year, I've had this conversation with many people, I would assume that you don't want to play next year. And I immediately said, No, sir, coach, I'll fix it. I'll go to work this summer, I work like crazy. And I'll be better. And the one thing I asked you is, if you watch what I do, because in golf, there's a, really the bigger part of the season is a summer season. And I said, I just asked you watch what I do in the major events this summer. And if you happen to have scholarship money, give it back to me. And I'll never forget, I was cleaning out the attic, at my parents house in August in Memphis, Tennessee. You know what that's like, my mother got a phone call. And she said, Coach Paige is on the phone. And he came back and he said, Hey, I do have a little money left. I've seen how you performed and I want to give you your scholarship back. And I said, Great, I appreciate it. And I'll do all I can to make sure that you don't regret that. Hey, you know,

David Novak 38:59

because you're listening to this, I can tell you're the kind of person who wants to learn how to lead well. But there's a lot of companies out there who want to take that desire and charge you $500 or $1,000 or heck, even $20,000 to try and show you how to lead. That's just not right. If you want to be a better leader, I believe you deserve to have access to something that will truly help you and it shouldn't cost a fortune. So I want you to go to how leaders lead.com and start my leadership class. It's really and truly free and after you take this class, you're gonna feel more confident in your role and you'll be on your way to get the big things done with your team. Go check it out at how leaders lead.com

From what I understand, golf is what actually got you in the door at Ernst and Whinney which is now Ernst and Young. Tell us about that story.

Bill Rhodes 39:58

It's amazing. and how twists and turns happen in your life. And this particular one was pretty amazing. And it is how I my career got started. I was a good student, but UT Martin, but I was never an upper echelon, top of the top student that any of the back then big eight accounting firms would have recruited. And so I come back to Memphis I'd learned and even though I said I wanted the toughest degree at UT Martin, about halfway through my junior year, I learned two things. One, I didn't particularly care for accounting. And more importantly, accounting didn't like me. And so I had decided I would go straight to University of Memphis when I graduated and get an MBA, and focus on management and then go follow in my dad's footsteps. When I came home, there was a little article in the Commercial Appeal, our local paper in Memphis, talked about the success I'd had my senior year in college playing golf, and then mentioned that I was at the University of Memphis pursuing an MBA. And there was a gentleman by the name of my copper who ran the audit practice so the Ernst and Whinney at the time office and Ernst and Whinney had three groups at the office, three different practices. One was audit, one was consulting, and one was tax. And so he called my mother's house and said, Hey, I'd like for you to have Bill call me. So I come in and back then you wrote on the refrigerator. She said, call my copper Ernst and winning. I called him said, Hey, I read about you. I'd like to interview you. When I was a college boy, I put on my best duck Ed khakis, my penny loafers? Well, a navy blazer, a board a tie from my dad who's six, five, it was way too long. Had a full beard. back then. And public accounting your dark suits, white shirts, no facial hair. I went down to see this guy, Mike Hopper, he walks me into his corner office overlooking the Mississippi River and he starts interviewing me. And about three minutes in, and he says alright, here, stop. Here's the deal. At Ernst and winning, we have three practices, audit tax and consulting. Every year, we have a golf challenge between the different practices. It says since I've been here, we finished last in the golf challenge every year, not only not one we finished last. So I want to hire you. You can work one hour a week, or 60 hours a week. I don't care. This was May of 1988. I was going to graduate from graduate school in December 1988. And he said, you can work here until the end of your graduate school or until after the golf challenge. Either one works for me. But you know, we won't be looking to hire you full time. So I got this great opportunity to go to Ernst and Whinney and I thought, you know, how can you not write on your resume that you worked as an intern for Ernst and Whinney. And it was the beginning of my career. Fortunately for me, by the time December came along, they decided that maybe I could make it there. And they brought me on full time. And I stayed there a total of six and a half years, and it was the greatest training ground I could have ever had. Did you

David Novak 43:06

help them win or not?

Bill Rhodes 43:07

Yeah, we won. We won, but much more disappointingly, they never held it again. That was

David Novak 43:17

well, now that you're on the day, there was no chance, you know, as a consultant or an auditor, you really get to put your head underneath the tent or, you know, raise the hood and really check out companies and you check out I'm sure, five to 10 companies a year. What did you learn from that experience builds you were moving up the ladder?

Bill Rhodes 43:35

I call it sometimes the greatest MBA program. You know, where else can you be? You're 23 to 26 years old. I guess I was 28 or so when I left? Where can you be where you get an opportunity to see inside of a company. My case back then probably eight to 12 a year, you get to see which businesses perform well. And why. Which industries are cyclical, which ones are more importantly, you get to see which leaders are successful. And what are their leadership traits. You see which leaders fail. are artists successful? And what maybe are they missing? In Autozone case, it gave me the chance to see inside this culture. And I wanted to be a part of this culture. So it was really just maybe the greatest learning experience I've ever had

David Novak 44:25

you join Autozone in 1994, yet a lot of different positions. One of the things that we were talking about this past weekend was that you had what you call sort of a lucky demotion. Talk to us about that.

Bill Rhodes 44:38

I came in to Autozone 1994. As the manager of inventory accounting. I did that for about six months. And they wanted to start an internal audit department. And so they asked me to do that in addition to what I was doing, but I wanted to call it process improvement because I didn't want the nomenclature at the time of internal audit. I did that for about a year. Then I went to work for our president and then kind of a support function. I did that for maybe six months. And then we started buying companies. And I did a lot of m&a work for about three years, in addition to my supporting the store operations role. Our CFO at the time was beginning to talk about, you know, his timeline, and how long before he retired. So I was moved back into the finance organization. As a vice president, I was already a Vice President with loopback, as the vice president. After four months, I was promoted to a Senior Vice President of Finance and the comptroller of the company and thought, Man, this is going crazy. I was, I don't know, 34 years old, or something shocking to me to be considered for a role like that, at that stage in my career. Four months later, I get called in the office on a Thursday by one of my mentors, Tim Vargo, and he says, hey, the board's met all week, and we've actually decided you're not going to be the next CFO. In fact, we've hired him, he starts on Monday, he's going to take your job, you're going to be demoted back to a vice president. We don't know what you're going to do. But we like you. So I was tracking with it all along until he said, but we like you. And lo and behold, they called me back in about a week later and said, You're going to be a vice president, you're going to be the vice president of mid south division of stores. So I went from running the accounting organization, to working with 525 stores and 11 states and 8000 people. And what a great opportunity that was for me to really learn our business from the ground floor, to get to know our people at a more intimate level, and help understand what they needed to, for us all to be the most successful we can be.

David Novak 46:44

And that was really when you demonstrate you're much more than a numbers person that you were a General Manager, you can make money and make things happen, right?

Bill Rhodes 46:51

I don't know about that. Because we weren't terribly successful. I was in that role. Because I was only in that role, 11 months, and then I got re promoted this time to be senior vice president of our supply chain. So our our distribution centers and transportation fleet, and I was like, thank goodness, y'all got me out of that role, because I don't know if the company could have afforded those kinds of sales much longer.

David Novak 47:10

When did the company know? And when did you know that you wanted to be more than a finance person that you wanted to really run the business?

Bill Rhodes 47:17

I think I knew it when I was in college, when I studied accounting. And I knew that it was a great profession. And I'm a huge proponent of accounting, because it is the Language of Business. But I really wanted to be my dad. And I saw the impact that my dad could have on people by being a people leader. And that's what was inspiring to me.

David Novak 47:41

You've been such a successful CEO, and you're a leader in the retail industry. I know a few years back, you and other few CEOs, you met with the President to talk about the tariff situations in China, you know, meeting with the President Bill, that's pretty heady stuff, no matter how successful you are. What did it feel like just to be in the room and be at the White House?

Bill Rhodes 48:04

So it's funny, as we were preparing to go to the White House, I went with the Retail Industry Leaders Association. I think there were eight of us that were CEOs of retail companies. We met with President Donald Trump and Gary Cohn and Jared Kushner and Mike Pence, and maybe a couple others, it was fascinating. But leading up to that meeting, everybody kept asking says, Oh, I'm sure you've been in the White House before. And I said, Of course I have, as a tourist, to walk into the White House with all these cameras and everybody on you, you know, seven of my peers walk into the Roosevelt Room, tons of media in there. And we were waiting on President Trump and his team. And we were in there maybe 30 minutes or so waiting. And it was just look around that room and think about who had been in that room and the kinds of decisions that had been there. It was surreal. David, and then President Trump was a little late because even having to deal with something else. And he had a major meeting behind us. And so we felt like our time would be compressed. And it was not. He and his team were in there with us for an hour. The media was in there for the first three or four minutes and then left. And we had one of the more fascinating conversations that I've ever had. And I was particularly impressed at, you know, Gary Cohn and his thoughtfulness and where he was going and the fact that President Trump and Pence all of them were Vice President Pence, all of them were listening. We had a great discussion at the time, there was a movement going on to have a border adjustment tax, which ultimately got killed, but it came back in the form of tariffs, you know, six, nine months later, but to be at the seat of government, and have the opportunity to represent your industry and a represent, in my case Autozone and auto Zoners. It was a tremendous honor. And then we left the Roosevelt Room and, and went into the Oval Office and I'm sure you had these experience Just in the past that you're gonna go see something that you've envisioned your whole life. And you get there and you see it, it looks nothing like you thought it would look, I guess maybe I've watched too much TV, when you walk into the Oval Office is like, Yep, there's those brown sofas, there's a window. I mean, it's like you knew exactly where you were. It was really remarkable.

David Novak 50:18

You've had so much success bill, but all of us have had what we might call our epic fail. When you look back on your career, what would be one failure that you learned the most from?

Bill Rhodes 50:28

How much time do you have? There's a long list. I know you said, one. There's one that really sticks with you most of my failures that I've made, and I've made a gazillion of them. Most of them have been bad people decisions. And those are the hardest, because you're impacting somebody's life. And their and their family's livelihoods. You either promoted them too soon, you promoted them too late, you move them into the part of the organization where they couldn't be successful. But I made one critical error in 1996, that I will never forget, I was I was responsible for labor scheduling, I don't remember how many stores we had in 96, probably 1200. And we were trying to figure out ways to be more efficient with our labor. At the time, we had three person minimums and all of our stores. And some of them just didn't need three people every hour of every day. And so I sat actually, in this office with our founder, it was his office at the time. And I pitched to him that we shouldn't have three person minimums on our stores. Thanks it okay, I know you've done the work, you've looked at all the data, okay. Well, I went and pulled the big lever. And I took them all down to two person minimums, but our forecasting methodology was an appropriate wasn't good enough to do that. And took me four weeks before I could reverse that decision. And the amount of pain and frustration I put all those owners through, and the amount of dissatisfaction that I put customers through, it was one of those things that have led to this philosophy of evolution over revolution, or testing, if I had to put it in 100 stores, we would have found out in two weeks that it wasn't the right thing to do. But to me, that's what it's about, we're all going to make mistakes. And that thing I don't want anybody to ever be afraid of, is to make a mistake in a business decision. Just don't keep making the same one. Go back and learn from those mistakes and figure out how it's going to affect your decision making. Who else are you going to listen to? How are you going to bring people together to evaluate a decision? Because that was painful. And it was 100%? On me?

David Novak 52:41

Yes. And it turned out to be a huge advantage in the end. And so many times those those failures are sort of blessings in disguise. You know, Bill, it's been so much fun. And I want to have some more with a lightning round of questions. Are you ready for this?

Bill Rhodes 52:55

Sure, David.

David Novak 52:56

Okay. What are three words others would use to describe you?

Bill Rhodes 53:00

I would say competitive, detailed, and relentless.

David Novak 53:06

If you could be one person for a day besides yourself, who would it be? And why?

Bill Rhodes 53:10

David, I learned this from my mom and dad. And this is an unconventional answer, if you don't mind. My parents taught me no idols. And they said, you know, like, in junior high school, you look around, you've got the great looking kids, you got the great athletes, my parents said, you can't be that person. I want you to go focus on being the best Bill Rhodes that you can be, you're never going to be the best athlete, you're never going to be the most handsome, but just go be the best you that you can be. And so I spend every day saying I don't want to be anybody else. God has blessed me in so many times over with the skills, capabilities, talents, passions, and people that I've been blessed with. And so I don't want to be anybody else there enough.

David Novak 53:53

What's your biggest pet peeve?

Bill Rhodes 53:55

People with a victim mentality? Don't tell me why you can't. Don't tell me why you got this disadvantage. Tell me what talents and capabilities you have as an individual. And let's figure out how best to leverage those and make you be all you can be.

David Novak 54:11

What's the last thing you bought at Autozone? For your car?

Bill Rhodes 54:14

It was a pickup tool. I just bought it in Mexico two weeks ago.

David Novak 54:19

If I got in your car and turn on the radio, what would I hear

Bill Rhodes 54:23

the message to Christian radio station on Sirius XM?

David Novak 54:27

What's your lowest round of golf? And were 64

Bill Rhodes 54:31

Edmond Oracle golf course in Millington, Tennessee. 100 years ago when I could play the

David Novak 54:36

game, what's something about you that few people would know? I think that

Bill Rhodes 54:40

I have a massive fear of failure. I think that drives me as much as anything I don't like to lose. And I don't like the embarrassment of failure. And I've had it so many times in my life that I know what it tastes like. And I don't like to go there.

David Novak 54:54

It's interesting that you don't want to have people afraid to make mistakes in your account. But uh, yet you have this massive fear of failure? How do you deal with those two things.

Bill Rhodes 55:05

One of the things that happened to me over the years is I was trained as an accountant, which is a low risk kind of role. And I would say, in my first decade, I was a pessimist. And then I moved into these leadership roles, and you can't lead people and be a pessimist. And so I become this ultimate optimist that I can find opportunity in everything that's in front of us. And then the other thing that I would say, one of the traits that I've really picked up on, mainly since the pandemic built is this notion of executive courage. The executives that are willing to take 60% of the necessary information, and they're willing to make a decision and decide on a path forward. Because if you have 60% of the information, you have your intuition, if you make a decision, I believe 80% of them are going to be right. And you're going to do terrific. I believe 15% of them were the wrong decision to make. But because of your commitment and the team's commitment to it, you're gonna make it work. And then about 5% of the time, you're gonna realize, Oh, that was a really bad decision. Raise your hand say we can't do that. Let's, we gotta go back. And we own it. Let's clean it up. And let's fix it.

David Novak 56:21

You know, we talked that your dad and his conversation and they called him the big man, as I understand it, he lived large with humility and grace. As you think about your own legacy. What words do you want people to use when they describe how you show up as a leader?

Bill Rhodes 56:37

You know, my dad was the big man. He's about 280 pounds, six, five, he lost some weight for at one point time, my friend started calling medium man, one of the greatest traits that I would say about my dad. And I said it when I was given my part of his funeral. I've never met anybody that didn't have an enemy. never met anybody that everybody loved. And I know that's not the case with me. But that was the most incredible thing about my dad. What I want people think about me is that I left this wonderful place, the world better than I found. I helped Autozone not while I was here, but I helped be part of a team that set up AutoZone. For the next decades of success. I tried to live according to my values every day, I'm a sinner saved by the grace of God, I fall short. But I want everybody to realize I'm doing what I can do. I'm being the best me that I can be.

David Novak 57:39

And what's one piece of advice, last question here that you'd give to aspiring leaders,

Bill Rhodes 57:45

have courage. Be willing to make decisions, don't get paralyzed by the fact you don't may not know everything, use your intuition. And then go make it successful. You got to lead through people, you got to listen to people, build a team, have consensus oriented decision making, but don't be afraid to make a decision.

David Novak 58:05

Build, you are one great guy, just knowing how hard it is to drive culture, keep it alive. You know what you're doing. Autozone is just world class. And you live it every day, and you are making a better Autozone for the future. So congratulations on everything you've done. And everything that I know is going to happen because of your leadership and the leadership of your team.

Bill Rhodes 58:28

Thank you, David, as you know, these kinds of jobs, their team sports, and I get a lot of the credit that I don't deserve. I have the most phenomenal team that I get the honor of working with every single day. And that's the secret of our success.

David Novak 58:52

I just love bill. He's the real deal. He's smart. He's humble. And he's clearly a leader who knows how to take people with him. I mean, when he told that story of his decision to reduce staff and stores and the awful impact it had for you could just hear the sorrow in his voice still, after all these years. But you know, what's amazing about that story is that led him to a better strategy. He calls it evolution over revolution, and is such a smart way to roll out new ideas. But more than that, Bill's story should remind us that leadership is a privilege. And great leadership only happens when you value those you lead, that respect can drive you to make better decisions, and to truly learn from the decisions that aren't so great. Now, Bill, to his credit is had a lot more good decisions than bad ones. But the important thing is he learns from both. Now normally at this point, I offer us some coaching for your week. But to be honest with you, I can't just sit here and tell you to value your team. That's got to be a genuine thing that comes from your heart. But I can tell you this, get to know your people, pinpoint their strengths. get interested in what they're interested in, understand what makes them tick. When you do that respect just naturally follows and people will know how much you value them. So ask yourself, what do I need to do this week to deepen the respect for those I lead, and to make sure my team knows it? Lean into those questions and I know you're gonna engage your team and accomplish big things together. So do you want to know how leaders lead? Well, we learned today is the great leaders value those they lead. Coming up next week on how leaders lead is Jr. Bridgman former NBA player and one of the greatest entrepreneurs in the world.

Junior Bridgeman 1:00:48

It was never about the number of stores it was never about trying to have a company that was x, y size. It was always about trying to present more opportunities for people to better their lives. They think it's a Kenyan proverb that if you want to go fast go by yourself. But if you want to go far, go what other people and so ours was always about bringing people along to improve their lives so they could make more money so that they could better their lives.

David Novak 1:01:24

Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen to and while I interview some of the very best leaders in the world, I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be

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