Welcome to Howl 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 of 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. Today, I'm joined by Bernie Marcus, the co-founder of the Home Depot. At 93 years young, Bernie is an absolute icon. The Home Depot broke the mold for retail and is continuing to succeed where lots of other retailers are struggling. And that's because of the foundation that Bernie set. And you can really understand why when you spend time with Bernie. From the very beginning, he made decisions based on what's good for the customer. Because for Bernie, customer service isn't just a transaction, it's a relationship. If you want to succeed in your work, you've got to take care of your customer and do right by them. And this conversation is going to get your wheels turning with ideas to do just that. And it's going to have you laughing because I got to tell you, Bernie has got some incredible stories and he does not hold back. So here's my conversation with my good friend and soon to be yours, the one and only Bernie Marcus. Hey, Bernie, here you are. You're 93 years old and you just released a brand new book, "Kick Up Some Dust ." Why did you feel it was the time for you to tackle this project? Well, frankly, a lot of it had to do with the coronavirus. I was locked up the way everybody else was. I'm an active kind of a guy and I wanted to do things. And what best then write a book? And I found Catherine Lewis, who is great. I'm not a good writer. I speak well, but I don't write well. And Catherine was perfect for me because she was able to take my words, put them in a book. And I think that the book is basically what I think and how I feel. And frankly, I have not spent most of my life thinking back. And a lot of it was a revelation to me because I always, even at 93, I'm thinking about five years from now where I think things should be and where I'd like to be. But my career has really been a blessing to me. I'm lucky I met the people I have. Ken Langone was critical of my life. Arthur Blank was critical. Pat Farro was critical. George Schultz was critical. There are so many people who form the basis of who I am. And every one of them taught me something that I lacked before. And it just showed that anybody who thinks you're the smartest guy in the world , they're probably the dumbest guy in the world. You know, Bernie, you know a lot of people. And I have to tell you, I was absolutely amazed when I was reading your book that Pitbull wrote your forward. I figured Frank Blake, the former CEO of Home Depot, could do the profits. And when I saw the Pitbull wrote the forward, that kind of, that took me back. How in the world did Bernie Marcus get to know Pitbull? Well, you know, he tells a story about how we could get through the gate of St. Andrews, another place where I live because nobody believed that Pitbull would be a friend of mine and they wouldn't let him in. And I finally got him in, but the truth is he's really kind of a mirror image of myself, his parents were immigrants that came over for the old country. They were poor as hell. He had to make it for himself in this world. And he's a real entrepreneur and a capitalist, whether he admitted it or not, because he's done some wonderful things, especially in the education field. He's been terrific. He taught class together. He and I have a lot of fun with the students. And we found out that we are very similar, different accents, different upbringing. Parents were different, but we were the same. We believe in that you could make something yourself, but you have to work like hell in order to get it. And he did that and so did I and fortunately God smiled down at us and gave us what we have. Absolutely. And as I understand it, Bernie, you had over 90 book titles. How'd you land on this one? You kick up some dust. Well, we fought for it, frankly. We wanted something like this because we wanted to be able to get somebody's attention. It's part of the do-it-yourself thing. We're telling people, get off your ass and do something and make life better for somebody. You know, Bernie, while we're on the subject of titles, I'd love to have you tell us some of the names that were rejected before you got to the Home Depot name and how you came up with the name Home Depot. Oh, the Home Depot. It was amazing. We got all these investors together. We're under-capitalized. We didn't have enough money to survive. We had to get a line of credit from a bank in order to do it. And about 30 days before, we still didn't have a name. We hired a firm out of Canada and they wanted to call it Bad Bernie's Build All , showing me in prison garb and saying they locked me up because we charged this low prices. In fact, I have a picture of what they recommended in my office. It was me in prison garb, but there were so many names and it came about Marj orie. One of our investors was at a gas station. She looked across and there was a train depot and she started into postal words . She called me right from the gas station and said, "I have a name." This is 30 days before. We had the building. We were setting up. We were putting product in. We had no name on the building. When she called me, she said, "Well, part of the reason we could clear the name ." Every time we went in, somebody else called on the name. So she started to play house depot and product depot. She finally came up with Home Depot and she called me and she said, "I found the name Home Depot." I said, "I don't think I like it, but let's try it." I wasn't in love with it. I thought it was a good name, but then I called my attorneys and I said, "Can we clear this name?" They came back and they said, "One guy, I don't know, is St. Louis or something on the name and we were able to buy it from him right away." We incorporated. But the truth is, think about the name. What the hell does the name mean? Gimbals, Macy's, Bloomingdale's. What they don't mean anything, Neiman Marcus. What do they mean? They don't mean anything. What happens is that you build a brand around it and eventually people associate the word, the name with what you produce, what your product is. It turned out that Home Depot today is one of the great brands in the world. It's known everywhere. I go everywhere. Wherever I go and I say Home Depot, they say, "Oh, even if they're overseas." You build one of the most admired companies in the world, largest retailer. It's an incredible success story. It's interesting, Bernie, you write, "Kick up some dust at 93" and you actually started Home Depot at 49. When you look back and you had to reflect when you're writing this book, how has your leadership changed over time? Or have you always been basically the same leader? No, I think my style is the same. I'm an entrepreneur, I'm easy. I know your books and you talk about how CEOs, how they basically operate. I believe in surrounding myself with smarter people that I am and let them free . I'll let them do their entrepreneurial things, keep a track on them and keep controls so they don't go off the reservation. But generally, I like to have the smartest people in the world. These CEOs surround themselves with people who are dumber because they want to be the smartest guy in the house. I don't want to. I want to be the dumbest guy in the house and I want all these people around me who are smarter than I am in different areas. I, for instance, Arthur Blank. Arthur Blank has talents that I don't have and he's a pedantic, anal kind of guy. His desk is clean. If you saw what my desk looked like, you wouldn't believe it. It looks like a tornado hit it. We're just the opposite kind of guys. It's like the odd couple and I'm playing the guy who's free and easy and author is who he is and we were partners for 40 years working together. If you've ever met two people who are opposite, man, it's the two of us. I mean, I would go in his office sometime as sprinkled dust on his desk. He would come in and go berserk because there was never any dust on his desk. Me, you couldn't even find a desk. That's because you're a creative guy, man. You have so many ideas. You're throwing things all around the place. There's no question that that's the difference. And he's the finance guy. You're the marketing guy. Two guys become the super blender. You create the super milkshake. And you also had Ken Langone, who's a mutual friend of ours. And Ken is a hell of a guy, as you well know, and a great leader. What did Ken teach you about leadership? And if you could, give me a story to illustrate it. Well, Kenny, he questions everything. In other words, there's nothing he doesn't question. Good morning. What do you mean by that? He's just that kind of a guy. And he's a real devil's advocate. So Kenny, who of course wasn't in the operation of the business, we use him as a special advisor, especially on financial things. But we, you know, he was the lead director on the board of directors. He went into the stores. I mean, if you know him, you know, he spends a lot of time in Home Depot stores talking to people. So he was very much involved with our business, but not in the actual operation of the business. Kenny is a very smart, intuitive kind of person that can spot things that you could never believe. And he would spot things that we never thought of. And he would, over the years, disagree with one direction or other that we're on to go on. But most cases he was so supportive. And he's, you know, he's a positive guy. He wakes up in the morning and the glass is half full and he wants to make it full every day. He's just so full of energy and so full of thoughts. And he's not afraid to share with you. That's absolutely right. And you know, you're no wallflower. You got Arthur Blank, he's no wallflower and you got Kinland. And I see the three of you guys, the co-founders, the Home Depot in a room. You got big personality, strong opinions. You know, when you think, look back on it, Bertie. What was the biggest disagreement you three ever had? And how did you resolve it? I can't think of a big one, but there were many. And I know that Kenny, I had board meetings. He would incessantly disagree with something I wanted to do. He's on my foundation board, a very team member of my foundation board. And when I announced that I wanted to build an aquarium in the city of Atlanta, he went totally reserved. He said, that's the stupidest, dumbest thing I've ever heard of. And finally, I mean, we argued back and forth at a board meeting, he had all board members and he said, he finally said to me, Bernie, it's your money and you could do whatever you want with it. But he finally gave in and he didn't win every argument. I will tell you that. I'll tell you what, he made me think twice about so many things that I did. And many of them, he was right and I was wrong. And I think that one of the things that David, you should know, a good leader is somebody who listens to people. But I mean, listens, incorporate what they're saying into your brain and into your computer and think about it. And if they're right, you admit that you're wrong and you adopt whatever policy they have. And so many times he was right about so many things. But of course, you know, that was the same thing I did with George Schulz and many other people that I met my lifetime. They were all very smart and you had to listen to what they said. And in many cases, they made sense and changed the direction you were going in. Bernie, if you had to pick one trait that separates you as a leader, what would it be? And tell me a time when it really paid off for you? Well, I could tell you a thousand times this thing about listening, where I mean people don't listen. You know, you say something to them and you know, it bounces off a rock. It just doesn't permeate their brain. You know, I would be in a store and I had to be a seventeen or eighteen year old kid. I was walking through a store one day and there was a product that we're out of . And I said, "Why are we out of it?" And he said, "We're always out of it." And I said, "Why are you out of it? Why don't you order more?" He said, "Well, there's no place to put it." So I said, "Well, that's pretty stupid." In other words, if you had two times or three times more of what you had, would you sell it? He said, "If I had ten times more, I could sell it." I said, "So why don't we do something?" He said, "I don't know. I would stack it on a damn floor." Well, that turned out to be a multi-million dollar idea. I went back and I said, "Oh, and Christ, this guy is right. Let's stack this stuff on a floor because we had no room in the shelves." And the more we put out, the more we sold. So listening really became the key thing for me. We taught our people when we trained our people to listen to people. Some of the greatest ideas came out of the most unlikely places. And you could make millions of dollars. I could give you 50 different times that happened to me in my lifetime. I remember you told Frank Blake that you're going to tell a joke as a CEO, but remember something. You're really not that funny. What's the wisdom in that, Bertie? Well, as a CEO, you're used to, unfortunately, I didn't have those kind of people, but you're used to this. Yes, you're right, you're right, you're right. My people would say, "That's bullshit. It doesn't work." And they did, and they weren't afraid of a kickback because I wanted them to be honest with me and forthright. And it made an impact on me. Look, we're aware of only one thing, making a business better, making a better experience for a customer. But if they had a better idea than I did, then I had to incorporate it. But you're like a very outspoken guy. You're very opinionated. So here you are saying, "Oh, you just tell me how full of shit I am. I just can't wait to hear it." I mean, you had to have some courage to take on Bernie Marcus, didn't you? Well, we told them number one, they would never get fired if they were respectful. In other words, you could tell me I'm full of shit in a respectful way. And then they'd disrespectful way. So as long as they were respectful, it was acceptable. It was okay. And if it made sense, then certainly it was respectful. And listen, I remember the time where I went to the stores and they were spending their Mondays in their office filling out these forms. And I was trying to defend our systems. And of course, the key, which I didn't write about in a book, was that one of the guys got up and said, "Bernie, you're so full of shit. The systems don't work." And I stopped and I said, "How many people think I'm full of shit? The systems don't work." They all raised their hand. And I said, "Well, I must be full of shit. So let's do something really good." I didn't put that in the book because it didn't quite go over. But that's the way it happened. You accept it. You accept it as long as it's respectful and as long as it's positive and as long as it's meaningful. If somebody says, "I'm full of shit because they don't like me," that's a different story. Hey, 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 howleaderslead.com and start my leadership class. It's really and truly free. But after you take this class, you're going to feel more confident in your role and you'll be on your way to getting big things done with your team. Go check it out at howleaderslead.com. You're arguably, you along with Pat Farrell, you really became the best merch andisers in retail history. I mean, you guys are incredible. And I'd like you to just walk me through some of the things you did to make the customer experience one of a kind at the Home Depot and maximize your sales. Well, one day, I'll tell you, I came out of an experience I had. I was in the store and I, and there was a customer there and they were doing a refurbishing of their house. And I kept talking to the guy, the man, the husband. And I kept saying, you have to do this. As she looked at me and she said, why are you talking to him? He's a dumb one, and he doesn't know anything about what I'm doing. I am running this thing. If anybody's going to pick out a color and anybody's going to do a repair in our house, I'm going to do it. He's the dummy that does it. I'm the one that picks it out. And I came back to Pat and I said, I found out something today, the women really control the redecoration in the house. And Pat said, well, then why don't we give a class for women? And then we started to give classes for women. It was a brilliant idea and we taught them how to do their own tile work, how to do electrical. They turned out to be great and they were our best customers actually. The guys are word dummies and we took their own families who realized, you know , we want to do something in a house. The woman really controls us. So that whole turn of events was a very important one for Home Depot and Pat Barrett is the one that came up with how to deal with it. And I was giving classes and it really turned out to be a major decision for us . So you teach classes not only to the women, but also to men. So you really give people the instruction they need to really, you know, redo their houses. And one other thing that I noticed that you did, which I really thought was fascinating is that you walk into Home Depot, there's no numbers on the aisles. Where'd that come from? Because we wanted people to wander. In other words, we didn't want them to come in and just be able to go to a shelf, pick what they want and go out. We figured if they wondered, they'd see products on the shelf and say, Hey, I need that. So our whole theory was if you came into the Home Depot to spend $20, you had to leave spending $250. And it worked for many years. Listen, today we become so sophisticated. It's all online. It's all on computer. And you can walk through with the phone and find what you want. But they're so far ahead of where I was in those days. They keep upgrading our systems and upgrading it and the customers are making a better experience every day. But in those days, we wanted people to wander and people would always say to me , I hate to go to your store. I just hated it. And I would say why? And they'd say, I spent the fortune there last week and I had no idea. I came in for light bulbs to cry out loud and I walked out with a drill. Now, you also had a 1-800 number. I think it's 1-800-BEN-HILL. Tell us about that. Well, that's also Pat Farrah. When customers called in, we wanted to make sure that the right person got the right... You know, typically you call in and some dummy answers the phone and says, yes or no. So let my manager call you back. That Home Depot, especially in the early years, our theory was it started at the top. So he came up with the idea of using a name Ben Hill. It was the name of an exit off the highway. So you call Ben Hill. Ben Hill was whoever was on in that day and it started with me. I was number one. Arthur was number two. Pat was number three. So whenever the calls came in, it would be in that order. I would get the first one. And believe me, when I got the call and I heard that people had a bad experience or didn't have a product that worked, I made sure it happened. So we did that in the early years and that created a real trust factor between us and the consumer. They really trusted us and they believe we really cared about them because we did. So it's a customer service hotline. And if you're in a store and somebody calls in and they have an issue, you were number one and you'd pick that thing up and you'd handle it directly yourself. Yeah. Yeah. That's awesome. So I was really impressed that you had a liberal return policy. You could literally at one time at Home Depot, you could buy a chainsaw, use it , and then you could bring it back and you get a full refund. And then I have to ask you, I know this was a part of your concept. What was your thinking when you find out the CEO comes in from the outside and takes away that return policy that you had? How did you feel about that? Well, he pissed me off and I'll tell you where it affected myself. People working for me in Atlanta, we bought a washing machine at Home Depot, a dishwasher. And I noticed that they were washing dishes by hand. I said, "Why are you washing by hand?" And they said, "Well, because the dishwasher doesn't work." And I said, "Well, we bought it at the Home Depot." And they said, "Yeah." And I said, "Well, why don't you call them and just get it out of here and get a new machine?" And they said, "Well, Nardelli had this new policy that the manufacturer really gave the warranty. He wasn't Home Depot anymore." And I went totally reserved. I mean, I called Nardelli up and I called him every name under the sun. And I said, "Get that freaking washing machine, that dishwasher out of my goddamn house now, or I'll shove it up your ass." And he said, "Okay, I'll have it done. This is only one of the policies that he changed. And as soon as Frank got back in, that's one of the first policies that he went back to." You know, Bernie, it's interesting because I don't know if a lot of people really understand this, but you have this return policy. And everybody goes, "Oh, man, that's going to cost you so much money." But in the end, because you put the customer first like that, don't you end up making more money, Bernie? Well, remember how much the dollars people spend on advertising? They spend millions of dollars. In many cases, they be better off just taking care of their customer and not spending as much money as they have to. They spend a lot of money because they're trying to convince the customer that they're better than they really are. Why aren't you just good and start that way and you'll find that your business gets bigger? We just believe whatever we said we believed in. Everything that made the customers have a good experience is what we did. You know, one of the things that you said, Bernie, was that in I quote you on this, I said, "We don't own customers. They're on lease and it's a short-term lease." How did this view impact how you would literally galvanize your team? How did you get the team to really feel that in their bones like you did? Well, first of all, one of the things that we did that was, I think, amazing in our company was that author and I went to the board and said, "Put a provision and actually vote on it that we will never take an option in the company." In other words, we could have been, I guess I'd be as wealthy as Warren Buffett today, had we taken options, hundreds of thousands of dollars every year and over the years, think about 20 years, I got those how many shares I would have owned. But our preference was to share it with all of our associates and have managers , assistant managers, department heads all have stopped in the company. So they all felt they were working for themselves. When a stock went up, they got richer. The reason stock goes up because the sales go up and sales go up because the customers have a great experience. They understood that and even today, if you go into the stores, they'll tell you to have crowd they are, don't stock in the company, don't store and look at somebody's got a badge that says 15 years or 25 years. 25 years are probably a millionaire. They own stock in the company and the reason they keep working is because they 're working for themselves and they're the beneficiaries of the good work and the way they treat customers. Another thing you did along those lines, Bernie, to capture that is, and I was always impressed by this as well, is that when you walk into Home Depot, you used to wear the aprons and I still see it a little bit today, which is I'm an owner, ask me. Yeah, listen, I would go to the store and somebody, you know, I would take care of a customer. I know many cases they would argue with me and they would say, you know, this is bad or that is bad. And then I would say, my name is Bernie Marcus and I started Home Depot and I'd say, oh my God, Mr. Marcus, oh my God, oh, I'm sorry. I didn't mean what I said. So when I said, no, no, I'm happy to hear what you said because any complaint was one that I wanted to hear. I didn't want to hear good things because we pay for the good things. It's supposed to be good. What I want to hear is what's not working so we can fix it. You know, you even talk about the importance of cultivating customers. That's an interesting word. You know, what did that mean to you cultivating customers? Well, you take a customer who had inability to do anything in the house except change your light bulb and all of a sudden one day they're putting in a ceiling fan and the next day they're fixing their toilet and that's cultivation. And I'll give you an example, a couple of weeks ago I had a meeting, I haven't met somebody and he said to me, he's working on something in his house and he didn't know anything about anything about how to do it himself and he keeps going back to the store and they keep teaching him how to use the product and when he makes a mistake, they give him a card and he calls that individual and that individual walks him through whatever he was working on and that's cultivation and as you do that, people trust you more because they know it's not just a seller product, it's a seller service and selling a product for a lot of money that's amazing. Our policy was, you know, if you have a choice of selling a customer, something of $500 and you have something that's $100 that would do the job for them, selling the $100 one, you know what to sell them, it's not important to sell them a big one and our people took to that because that's, if their relative came in the store, their mother, their father, their brothers, that's what they would do with their brothers. Listen, our whole business is the 500,000 people and those people are working the stores are the people that make our customers even today, they're wonderful. When a customer comes in the store, they think about what's good for the customer, not what's good for Home Depot. You know, I know at the Home Depot, you love to tell stories about your customers and what would be your favorite customer story of all time and I know you have hundreds of them, but what would be the one that you just love to tell the most? Well, there was one, we disappointed the customer, they were doing a kitchen and we promised delivery of the kitchen and they pulled their old kitchen out, they had the plumbers available and the day we said we delivered a new kitchen, we failed them and of course a Ben Hill tool came in and I got the Ben Hill call and the guy started really unleashed a torrent of Saturdays at me, you know, you guys are killing me, son of a bitch, you know, and everything in it. I just took it all in and I said, you know, 100% right, I said, we're going to take care of this for you and the end is that we built the kitchen and we gave it to them for nothing because we had, there was like a three month period where this guy had no kitchen and it was over Thanksgiving and Christmas and I just put myself in his place, he had no kitchen, he had his family in for dinner, where the hell are they going to give him thanks to, you know, turkey and so we made it out for it and we built the kitchen for him. That's a great story and Bernie, you're obviously a visionary and I got to ask you, would you have this aha moment for the Home Depot concept and what made you think it would work? I mean, when did it hit you that you're going to have this big box and you're going to stack it high and sell it lower than everybody else and you know, you can get everything in the world that you want to, when did that idea hit you? Well, it accumulated over a period of time . I was running this company called Handy Dan, which was typical of all the hardware stores in America. We were a small do-it-yourself place, they're 35,000 feet or 40,000 feet and we carried two of this and one of that and three of this and customers would come in and ask us for a brand that we didn't have or something that we didn't stock and it happened every single day and I was in the stores and I liked it and as I was running Handy Dan, I didn't know how to solve it because it had 35,000 square foot buildings so I began to think in terms of what if we opened a gigantic store and what if we carried everything that a customer would want under one roof? In other words, they didn't have to go to hardware stores, electrical stores, plumbing stores, or paint stores anymore or lumber yards for that matter. If we all had it under one roof, we could solve the problem that a problem was that the numbers didn't add up. Author the accountant sat down and put this all together and showed me that we couldn't do it and especially because I wanted to sell at prices that were less than anybody else because I wanted to buy direct-to-manufactures , not from distributors and give that money back to the consumer and the numbers didn't work and Arthur kept saying it doesn't work and I remember just before we met with the investors, Arthur said to me, "It's all facade, it doesn't work." And I said, "Just change the numbers for Christ's sake." I said, instead of using 20 million dollars for sales, put in 30. He said, "That's dishonest." I said, "Yeah." I said, "But we're going to do much more than that." And the truth is we did double and triple that. Listen, it's like opening a aquarium. I knew that in the middle of Atlanta, it was going to be a triple-header. It was going to be a grand slam home run. And it was three million people a year, came through the aquarium and changed the dynamics of the whole city of Atlanta and the state of Georgia. And the same way, kind of intuitively, I knew this was going to work. Now, one of the things that's interesting, Bernie, is that if you wouldn't have gotten fired at Handy Dan, this would never happen, right? Oh, Sandy Siegelov, God rest his soul, really did something great for me. And my wife, Billy, happened to run into Sandy Siegelov somewhere. And in her own style, she said to him, "Sandy, we have so much to thank you for God bless you for what you did for us." And he looked at her like she was crazy. And she just carried it on, "Thank you , Sandy. We would not be anything what we are today if it wasn't for you." And so that was a lucky break. You know, that's one of the things in life in the book that I talk about, failure. I think that everybody has a failure somewhere along the line and how they recover makes the difference in their lives. Some people don't ever recover. Keep thinking about, you know, why do they do it? Who can they blame? And that they spend their rest of their lives blaming somebody. And my theory is just move on, move on and do what you do best and life will turn out to be a better life. That's a good theory, Bernie. But, you know, tell us honestly, how did you feel when you got your butt canned? I mean, you know, I mean, were you thinking, "Oh, I'm just going to move on." And, you know, things are going to be great. What was it really like? No, it takes time. It doesn't. I was stunned. I mean, I had never been fired in my life. And I was running a good company. We were making lots of money. And it was no reason for me to be fired if I had stolen money or had done something, then you say, "Well, you deserved it." But I didn't deserve it. I mean, and an author didn't and Ron Brill didn't. And here we were just out on the street. And it took me several weeks to get over it. And finally, you know, Ken Langone, you know, that famous call where he said, "You know, you've just been hitting the ass with a golden horseshoe." I began to realize that this idea was a great idea. And I wanted to expand on it and do something with it. And so there's a lot of things. But the truth is, at one point, I had to put Sandy Cigolo off a way and compartmentalize him into a part of my brain that I didn't want to go back to, you know, I hated him. I despised him. And I had to not let that overcome my good judgment and stop me from, you know, doing what I could do best. So you pick yourself up off the mat, you get back in the ring and you raise money, you build the store that you didn 't have a name for for 30 days before you opened. And you have your grand opening, you know, what was the initial reaction? Well, there's something we didn't do in the book. I didn't tell anybody. But we had a grand, we had an opening ad, a double truck page, you know, two pages of Home Depot ad in the Atlanta Journal Constitution. The day that we were supposed to open, we opened on a Thursday, remember, they left the ad out of the paper. It wasn't there. So we had no ad. There we are with this big store. Nobody knew what the hell it was. And what is it? A trained depot, no one to have a clue. And nobody came. And rather than call a publisher and just to ream him, I called them up and I just said, you know, in a very subtle little voice, you just effectively put us out of business and you put like 120 people out of business. And he said, what did I do? And I said, how you left the ad out? He said, Oh my God, I don't believe it. And because I 'd embrace him and go after him and call him every name under the sun, he gave us the back page in the front section for one year. We could never buy that. And that became a very important part of our success, not treating people like animals and being reasonable with people and trying to, you know, that was as important as anything we ever did. And so we had the back page. And from that point on, people started to come in and they would tell, you know, I would see somebody, somebody coming in and I would say, where are you from? And I'd say Athens. I say Athens. That's a two hour drive in Atlanta. What are you doing here? Well, my cousin was in here and told me that this is the best place and prices are unbelievable. And I drove down with my truck and we're filling our truck up. And so I knew were successful. That was the day I knew were successful. That's interesting. But you know, when you you didn't have that original ad that you'd bought. So the customers don't show up. And you're sitting there in this huge store with all this inventory. You've gone to the banks, you've done all this. What was the soundtrack going on in your mind? What just happened? Well, I said that my wife didn't let me near erase it . I mean, it was it was a horror story. But you know, we overcame it. And just like I said, you just compartmentalizing, you move on. We'll be back with the rest of my conversation with Bernie Marcus in just a moment. As you've heard us talk about Bernie co-founded the Home Depot with Arthur Blank and Ken Langone. Now Ken is a mentor of mine and a truly special person. And there's a lot you can learn from Ken about how to show up for people around you and be the leader people want to follow. We need to step out of our own bodies for a moment and say, okay, I'm going into the body of that kid that 's over there in the garden department or that kid that's over there in the paint department. And I 'm going to try and visualize what he's going through right this minute. And when you use empathy, when you use a sense of compassion, and you let that person know that they really matter, that they're precious to you. And more importantly, they're precious to what you're trying to accomplish. And you share that successful. You let them go home feeling they've accomplished something that day too. You turn that person on that way, David. It's a force that can't be stopped. My entire conversation with Ken is full of terrific insights like this. So scroll back in the feed and give it a listen. It's episode 89 here on How Leaders Lead. You know, in retail, Bernie, you know this better. Anybody, you got to try new things. And you're known for being someone who's confronted failure. You're not afraid of failure. You have that mindset. But how do you spread that if you're a leader? How do you spread that across your organization? So you get people taking some risks. Doing it yourself. In other words, don't tell them, do it. If I would be in the store, there would be six or seven people around me walking around me. And I would see a customer down the aisle. I would leave them and take care of the customer. I set the example. So after a while, if there was a customer down there, people would split off and take care of the customer, leave me by myself, which is what I wanted them to do. I didn't want them to be around me. I wanted them to be around the customer. So it's by setting the example. And if you set the example enough times, people say, if he could do it, I can do it. And they do it. You know, I read where you spent 80% of your time talking about the things that went wrong or could be better. How did you balance that with people's innate desire to be recognized? Well, you do both. And listen, people who would do a good job, you always have to reward them for it. And the key is you got to be able to balance it. Now, sometimes I would go too far. And I would know it where I would criticize what they were doing and not give them enough credit for what they were doing right. And it would cause me to have to call them back on the phone and apologize and say, by the way, I think you're doing a great job. Don't, you know, when I was critical of you, don't take it to heart and don't think I hate your for it. And they like the fact that I get admitted, I made a mistake. Think about this a second. I don't know a politician anywhere that has the ability to say I made a mistake. Most CEOs can't get it out of their mouths. They can't say I made a mistake. Making a mistake is the simplest thing in the world. And admitting to it is the simplest thing in the world. And it cherishes people around tremendously. It changes the way they think. It changes how they'll deal with you. People just can't do it. And you know, Bernie, what's so obvious to me, I can see you going into the store and somebody is not done what you wanted to do. And you're, you're so passionate. You go crazy on this, but you seem to be a guy with you after it's all said done, you're driving to the next store , you're going to the next place, you reflect on that and go, Oh, I better make that phone call. Yeah, it's just, it's people. It's how do you want to be treated? My God, how would I want to be treated David? I would not want to be treated that way where people took me for granted. Number one, criticized me unfairly. Number two, and didn't explain why they criticized me. That's a big deal. If I if I said they did it wrong, now I'd have to explain what they could have done and how they should have done it and get into a dialogue with them. And then after a while, they would say, I should have thought about that myself. If you make a dumb mistake, as long as it's honest, and it was a judgment thing, just correct it, just make it right and don't dwell on it. You know, today you think about covering your ass. It's in government work, in business, it's the same thing. People cover their ass and they cover up the stupidest dumbest things and it costs a ton of money. In the final analysis, they spend more money on the lie than they would have on something that was beneficial. And they keep doing it and they don't understand how destructive it is to a business and destructive for them because they're not honest with themselves and they're really basically lying and cheating by not telling the truth. Bernie, you know, one of the things that's interesting to me is that, you know, you start out in this big store and you're taking the 1-800 Bin Hill calls yourself, but now Home Depot, well over 2000 stores, hundreds of thousands of associates, how did you being the hands-on entrepreneur that you are? How did you scale Home Depot? Because you couldn't take all those 1-800 Bin Hill numbers. I mean, how'd you scale that? You know, you put in enough systems and you train enough people and it all has to do with training. It all has to do with spreading the culture before somebody has an ability to handle a Ben Hill call. They have to understand how important that role is, that it's not just a job, that it's a career, and that they have to understand that their part of their career is making that customer happy. And so when you get people that do that and you have to scale it, of course, today, I mean, there's like 550,000 people working at Home Depot. I mean, think about how many Ben Hill calls we get a day. I mean, probably thousands, all over the country in Guam and Honolulu, in Mexico, in Canada. And how do you get that? How do you handle it? Well, fortunately for me, Frankly followed Nardelli and he started to work on it and Craig Manier took it over and now Ted is now doing it and they're all smart as hell. And they all think in terms of how to make life better for a customer. They all have the same culture. I meet with them a couple of times a year, even now. And I don't talk about systems. When they tell me the systems they put in, I mean, I don't even believe it. These are things that star wars type of things. I don't even believe how they do it. The culture is the same. Treat ing the customers the same hasn't changed during the day we started. And you're a, you're a huge learner. You know, you really get excited by learning new things. And one of the things I understand is you actually spend some time with Sam Walton, who built Walmart. When you two got together, what was that like? And what was the biggest lesson you learned from him? Well, Sam Wall was the smartest retailer I've ever met in my life. I mean, he really was brilliant. And he did things that were way beyond me. He taught me about everyday low prices, not to put things on sale, but to sell them at everyday low prices. There are many things I learned from Sam that I couldn't have learned from other people. The one thing I didn't learn from Sam is philanthropy. He was not philanthropic. He didn't give money away, except when it was good for business. In other words , he would do things for Ben Bill Arkansas. But that was it. And no matter how many conversations we had about it, he wasn't willing to go out of that sphere. He stayed in that sphere. But when you talk about retailers, he was smart as hell. You know, I visited Walmart and Bentonville on a learning visit. And you know, I was interested when I walked in the foyer and said, today's stock price is X. Tomorrow is up to you. I just love that because it really got to the ownership that I know that you're such a big believer in. But you know, when did you have that moment, Bernie, where you realize that getting your associates to really have ownership in your company was going to be critical to your success? Well, really from the beginning, because I recruited people from all over the country to come to Home Depot when we opened. And people gave up well-paying jobs. In many cases, I paid them less. But I said to them, made a promise. And I said, when author and I get wealthy, you're going to get wealthy along with us. You 're going to own a piece of the rocks. From the very beginning, I made that promise to them. And I kept that promise. I obviously know Ken Langone and Bonnie Hill was on our board and they were, you know, obviously big Home Depoters. But I believe you require your board members to spend time in the stores once a quarter. Now, most leaders keep their board out of the day to day. They try to, you know, bring the people in for the board meeting and instead of them off, you know, what drove your thinking to say, hey, as a board member, I want you out in our stores. Well, first of all, going back to government controlling boards, every one of my board members owns stock in the company, bought stock in the company. So they had a reason for that company to survive and the company to make it. And so I think that Kenny was very instrumental in making that change because Kenny was going into the stores. We didn't have to tell him to do it. He was doing it. And then we made it part of the policy that every one of the board members had to go in the stores. And we took people that didn't go in the stores and asked them to leave the board. If they didn't go to stores, didn't know the business, when they came to a board meeting, they knew what was going on. They had a feel for it. And it was, we didn't just give them a paper, typical boards, they come for lunch. You know, people check their brains at the door. And these are all entrepreneurial people. And I want to hear what they have to say. And I want their input. And most CEOs don't want their input. I know that you 're always thinking about the future. Right now you're thinking five years ahead. You know, that's just the way how you are. What was your process? Or did you have a process of just intuitive for coming up with groundbreaking ideas? I mean, how did you make yourself think about the future? It just happened naturally. That's who I am. I'll tell you why. Because I wasn't bogged down with every day things that don't interest me. Budgets, you know, things that take my mind away from what I do well. So I think the fact that Arthur and I were partners, Arthur took that burden away from me. So all I could think about is how to make it a better marketing company, how to do PR, how to sell more product, how to be a better merchant. And I didn't have to worry about hours and government things that they put the burdens on you. You're writing reports and I didn't have those things. You know, over the years, how did you reinvent Home Depot so that you didn't end up like a Sears or some of these other retailers that were wildly successful at one point, had the world by the tail and then they end up dying off. What were the big pivot points that you made? How did you make sure that didn't happen to Home Depot? Well, if you don't learn by watching, then you're pretty stupid. I watched the disintegration of Sears Robot. When we started Home Depot, Sears Robot was the place. That was it. Greatest paint supplier in the United States. They sold more paint than anybody else. And you watch what they did and you watch how they were overcome by bureaucracy, where they were strangled by decision making. It was amazing. You know, if you went to them, and years later, when I left two guys and I was like Es quire shoe polish, I ran the company, I did that. I tried to sell Sears Robot. In order to put shoe polish in their store, they went through seven committees. It was painful. One of the things I learned is that bureaucracy kills the company. The author and I had a bathroom between the two offices. We would meet in that little carter and we would make a monumental multi-million dollar decision in 20 minutes. We didn't go to committees. We didn't have any of those things. We learned from the people like Sears Robot that that's what killed them. That's why they could never respond to a local situation. They were so bureaucrat, the people at the top were so isolated from the stores. I don't think they ever went in this store because we would go in Sears Robot stores and they were painful experiences. I mean, they were doing so many things that were dumb. They didn't know about it in Chicago. They didn't have a clue of what was happening in their stores. That's how they died. We made it a point that we're going to be in the stores. We're going to know our business. We learned from their stupidity on how not to do it. Many companies have disappeared off the face of the earth like AMP. AMP was another company in the grocery business that disappeared many, many years ago for the same reason. Sam Walton had a lot to do with that because Sam hated bureaucracy as much as I did. We would sit and talk about bureaucracy. Sam would say the bureaucrats are like cockroaches. They come out at night when the lights are off. You turn the light on and there are plenty of cockroaches. You have to keep a light on them all the time and ferret them out and get rid of them. Even today, every company and I'm sure home people has bureaucracy, but every company has it. If you just got to be aware of it and bureaucracy hinders success, I think that the guys that run home people today understand that. The other thing is thinking in terms of what tomorrow is going to be like. You can't just live in today. You have to think about where you want to be. Whenever I meet with home people, I always say to them, "Where do you want to be five years from now? What are you going to look like? What are the stores that look like? What kind of service are you going to have five years from now?" Sure enough, they do think about it and they are now thinking in terms of five years and ten years out and making the right kind of investments. You know, I want to shift gears for a minute and take you way back. I'm almost positive that you are the first gang member that I've ever interviewed. Tell me about that part of your childhood, Verdi. Well, you know, of course, I was a kid 11, 12 years old. I lived in a black neighborhood and it was either your father you got destroyed. I fought back. I fought back. The leader of the gang was a guy who beat the crap out of me every day, every day. I would come back for more until one day. He said to me, "You know what? You joined the gang." He actually did put me in a gang and they actually saved my life a couple of times. I literally saved my life. I don't tell the story. I'll give you a great story. When I was with two guys, we bought a store in the middle of Atlanta, downtown Atlanta. And on opening day, I was going up the escalator with the Chairman of the Board, the President, and coming down was this guy who saw me and yelled out, "Verdi, Verdi." And it was one of my gang members, the leader of the gang back. And I went up and the Chairman turned to me and said, "What was that? What was that?" And I said, "No , it's something. I'll just let me take care of it." I went up and I went down. I met him at the bottom. He was wearing a raincoat. It was in June. And I said, "What are you doing here?" I said, "I'm a vice president here of marketing." And he said, "You working here?" I said, "Yeah." He says, " We robbing this plane flying." He said, "I'm going to be a part of the other here." "We're robbing this place." He said, "I didn't know you here. We'll call him off right away." And he did. He calls them all out in the store. So he came back. It came back to you in spades. That's unbelievable. Your parents were Russian immigrants. And you grew up very poor. In what way did those early childhood struggles really help you become the kind of leader you are today? Well, the first thing I knew is I never want to be in the situation where you go hungry or I couldn't provide for my family. And my thoughts were always to be able to be independent financially. And that was what drove me. Never to be in a situation that my parents were in. My father barely made a living. And if it wasn't for my brothers breaking their backs and working when they were working in university, we're working and breaking their assets, bringing money home. We wouldn't have eaten in the house. I just never wanted to be in that kind of situation. And I never wanted my family to be in that situation. So my key was always to be independent. And I didn't end any people on how they made money. I wanted to know how they made money. And so my thing when I would see a guy with a big house, with a big porch, how to handle this guy making his money. And I would spend my life meeting with people who were successful and learning from them how they did it and trying to inculcate it into my own life wherever I could. And they shared how they did it with me. And it became a part of who I am. You know, Bernie, it became a part of who you are. And you've had enormous success. And one of the things that you're a big believer in is giving back. And you talk about the concept of entrepreneurial philanthropy. And the fact that you really view philanthropy as a business. Why are you so passionate about that concept? Well, because number one, I think about all the great things that have happened because of Home Depot. I say Home Depot because of the money that Home Depot allowed me to give away. The Marcus Autism Center, 40 years ago, we started that center when people didn't know what autism was. And I stayed involved with it for about 20 some odd years and put millions of dollars into it. And today, the Marcus Autism Center is the biggest in the world. I also started Autism Spe aks for the same reason because people didn't know what autism was. And I started Autism Speaks because I wanted people to understand that one out of 58 kids, at that time was one out of 58 kids. Today, it's one out of 38 children are autistic. It may know there was a view of black or white or yellow or richer poor. It's one out of 38 kids. So I think at that time, if I hadn't stayed involved, that Marcus Autism Center wouldn't be where they are today. Today, they have a device that will be on the market shortly. It's been approved by the FDA already where they can determine that a child is autistic at the age of three months. Think about that . At the age of three months, if you start treating that child, you could change the way that child is going to what his life is going to be like. Instead of his life being this way, you can make it that way. And you're not going to cure it, but you can make it like a better life. But it was the fact that we got involved with it, that we stayed with it, that we didn't walk away and we just arrived at check. Is that what you mean by treating it as a business that you're involved in whatever you invest in, just like you would a business? And stay passionate about it. You know, your mom, as I understand it, always encouraged you to give back. And I got to tell you, she'd be so proud of you, Bernie. I mean, you and Billy, you guys have given over $2 billion away just through your own foundation. And tell us about the giving pledge and why you join. Well, when they call me for the giving pledge, I had already committed to giving 90% of what we earned before we leave this earth. 90% is going to go into a foundation, which will be given away. My kids are taking care of, my kids are going to never have my life. They're not going to have the houses I have, unless they earned it themselves. Of course, we did enough so that they're never going to starve to death, but I'm not leaving it to my children. They don't deserve it. They didn't, they really didn't make it happen. And I want them to do it for themselves. So if they become successful, or my grandchildren become successful, it's because I gave my leg up. And then he earned it by themselves. But the truth is that 90% is better than 50%. And when they came out with the earnings pledge, of course, I joined. Why not join? You're already way ahead. Warren Buffett called me to do it. And I said, sure, Warren, I said, you're going to end up giving all your money away anyway, which of course he's doing because he had so much more to give away. And it's not that easy to give the money away. The way we do it, at least we follow it. And we see that we get a return on the vested capital, because we watch the results. Warren is not that interested in charity, but he knows that he's going to, he has to give it, either give it, or let the government take it and piss away. You know, you created a company where one of your former employees said, anyone can be anything. How do you look at investing in your people and tell me a story how you put that core value into action? Oh, listen, we have so many people that have proven you give them the rod. They catch the fish. We have one young lady who started with us at 18. She was a Jamaican, hardly spoke English. But great talent, tremendous talent. And I spotted her in Florida years and years ago. She was a cashier. And she was never at her desk. She was always out selling product to the customer that they would come through and they bought paint and they didn't buy brushes. She would go back and get the brushes and leave the cashier. And that's how we discovered her. People waiting in line and there was no cashier. And finally, I said, just put her on a damn floor and let us sell. Well, today, she runs all of our stores. Wow. 2,700 stores, 500,000 associates. She runs it. You if you can't tell me of a better area of success than that, I can't, I can't tell you anything better than that. And I understand when you had your team meetings, you'd tell your team members at the end of the meetings that you loved them. Now, that's not common in most work environments. Well, why did you do it ? Because I love them. I love them. I walk in a store. I want to hug everybody. Because think about the life I live. I could have anything I want. I could do anything I want to do . It never could have happened without Home Depot. You have to have an emotional feeling that the people allow that to happen and continue. The Home Depot continues to be a great company, earns great numbers. Every year, the sales of phenomenal, the profits of phenomenal, return to an invested capital of a number. I love the people who run it. I just love them. You know, Frank Blake had you back at the store manager meeting when he became CEO. And they love you too. The o vation just went on and on and on. People were cheering for you and everything that you really represent. So, you got to love to be loved back. You obviously are that. And this has been so much fun, Bernie, you know, talking to you about the business and the way you think. And I want to have a little bit more fun if you don't mind by doing a lightning round of Q&A. Are you ready for this? Yeah, sure. Okay. What's one word others would use to describe you? Appinulated. If you could be one person for a day beside yourself, who would it be and why? George Schultz. If we had a George Schultz now today, it would be the best thing for this country. What's your biggest pet peeve? Stupidity. What was the last home improvement project you took on? Oh my God. Don't even talk about it. I'm not a do-it-your-selfer. And I never, and I admit it in the book. And I stayed stupid all my life because I wanted to. I can join that stupid club with you. What's the number of fist fights you think you've been in? Well, up until the time I was 20, it was a lot. What's the word or phrase that comes to mind when you think about the growth of the Home Depot? Unbelievable. What would I hear if I turned on the radio in your car? Talk shows. What's something about you that few people would know? I think that my involvement in philanthropy, I think that a lot of people don't know how involved on it and how extensive it is that it involves medical and free enterprise and educational and Jewish issues. People just don't know how much I'm involved with. That's the end of the lightning round there, Bernie. Just a few more questions and I'll let you go. You've been so gracious with your time. You've been married to your wife, Billy, for almost 50 years. And I hear there's a particular strategy that you have in your marriage that's helped you sell more bathtubs at Home Depot. Tell us about it in the underlying lesson that there is for us. Never go to bed angry. Ever. In 50 years, we never went to bed angry . And that saved our marriage and made our marriage a good marriage. And I have to tell you, it continues today. We still love each other dearly after 50 years. And it's because we don't go to bed angry. The key was taking a bath together, being naked in the bathtub, where you're defenseless. And anything that that was in our minds would come out. And when we left that bath tub, everything was out on the table. That's fantastic. And you sold a lot more bath tubs at Home Depot, right? Oh my God. When we told that story to the wives of the husbands at Home Depot, the next day there was a run on bathtub. You know, you're such a great storyte ller. You always seem to have a great lesson at the end. You know, what was your process for disseminating these stories and lessons to your team over the years? You know, people don't want to be lecture too. People would rather hear a story . And so, the great storyteller was Ronald Reagan. So I remember one time, Ronald Reagan asked George Schultz to write his Fourth of July speech. And George put his whole mind into it. Roto speech and gave it to the president. And Ronald Reagan looked at it and kept circling it. And at the side was his story, story, story. In other words, if you want to make a point, tell a story. People understand stories they don't like to be lecture too. Absolutely. And what's the single most important bit of advice you'd give to aspiring leaders? Passion. You have to have passion for what you do. You can't be dispassionate. I mean, if you don't have the passion and you don't have the emotion for it, it's not going to be successful. Well, Bernie, I have to tell you, I was looking forward to this conversation. And I knew it would be amazing. And it has been. You're an incredible leader. Thank you. And David, you keep doing what you're doing. Because CEOs need a lot of work today. They need a lot of help. And maybe your books and your lectures will change some of their directions. Well, thank you, my friend. And keep up the great work yourself. Well, there you have it. Our most bleep-worthy episode ever. But you know what? You can't put a filter on Bernie Marcus. And who would want to? He's got so much wisdom from a career that truly changed the retail game. But you know, from the very beginning, the Home Depot succeeded because they were willing to do what was good for the customer. That's how Bernie made decisions. And it wasn't something he talked about. It was something that he did. Taking calls from customers directly, walking the floor and talking to customers and assisting them and helping them find the merchandise that they were looking for. This is a guy who did all kinds of things all the time to make sure he set the example for making customers happy. To him, it was all about cultivating that relationship with customers by putting them first. And you know what? You can make a huge shift in your business when you start asking what's best for your customer. Think about this. How often do you truly get to see your customers using your product or service? Are there policies you need to change so that they're more in line with what's best for customers? Or hey, you might need to do more for employees. So they're motivated to serve customers. Take action on these big questions this week. And I know that you're going to find some real breakthroughs. So do you want to know how leaders lead? What we learned today is that great leaders do what's great for their customers. Coming up next on How leaders lead is Dr. Holly Anderson, one of the world's most renowned cardiologists and the creator and driver of the hands only movement for CPR. You got to love what you 're doing. If you're passing about a message, you find a way to make it work. And we're all busy. But if you're busy doing things you don't like, then you're busy and unhappy. But if you find things that are important and these things are important to me, then you find ways to get them done. And you find people who are also willing to help you get these done. So be sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of How leaders lead where every Thursday you get to listen in 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. [BLANK_AUDIO] [BLANK_AUDIO]