August 12, 2024 • 56min
#360 Robert Kierlin: Founder of Fastenal
Founders
Key Takeaways
- Fastenal's core philosophy: Organizations succeed to the extent that all members pursue a common goal. For Fastenal, this goal is "Growth Through Customer Service".
- Focus on people: Fastenal's competitive advantage comes from empowering and developing its employees, not from unique products or processes.
- Decentralized decision-making: Fastenal gives significant autonomy to local store managers and employees to make decisions and serve customers.
- Leadership over management: Fastenal emphasizes developing leaders who empower others rather than top-down managers who control.
- Continuous learning and teaching: Leaders should constantly be learning and teaching others to develop more leaders within the organization.
- Suppress ego: Leaders must learn to suppress their ego to truly empower others and unleash the organization's potential.
- Long-term thinking: Focus on what's best for the future rather than repeating past successes. Be willing to innovate and adapt.
- Simplicity and focus: Keep the organization simple and focused on the core goal. Avoid unnecessary complexity and bureaucracy.
Introduction
This episode discusses the book "The Power of Fastenal People" by Robert Kierlin, founder of Fastenal. Fastenal has grown from a small fastener store in 1967 to a multibillion-dollar global organization today. The book outlines the unconventional business practices and philosophy that fueled Fastenal's remarkable success.
Kierlin attributes Fastenal's success to its high-quality employees and their commitment to a common goal of "Growth Through Customer Service". The book emphasizes unleashing human potential by empowering employees and fostering a culture of entrepreneurship and continuous learning.
Topics Discussed
Fastenal's Core Philosophy (20:04)
The central idea that Kierlin repeats throughout the book is that "Organizations succeed to the extent that all of their members pursue a common goal." For Fastenal, this common goal is "Growth Through Customer Service".
- This simple idea is difficult to practice consistently over the long-term
- The greatest danger is developing unnecessary subgroups that pursue their own goals rather than the organization's common goal
- All decisions and actions should be evaluated based on whether they serve the common goal
Focus on People as Competitive Advantage (22:04)
Kierlin emphasizes that Fastenal's only real competitive advantage is its people, not unique products or processes.
- Treat everyone equally: Avoid special perks or status symbols for executives
- Empower employees: Give autonomy and trust employees to make decisions
- Develop talent internally: Most executives started in entry-level positions
- Unleash creativity: Encourage ideas and innovation from all levels
Decentralized Decision-Making (32:05)
Fastenal practices extreme decentralization, giving significant autonomy to local stores and employees.
- Each of Fastenal's 3400+ stores operates as a standalone business
- Store managers have full P&L responsibility
- Employees can make decisions to serve customers, like special ordering items
- This allows flexibility to respond to local market needs
Leadership vs Management (36:05)
Kierlin distinguishes between leaders who empower others and managers who control:
- Managers: Control what each person does, assign tasks, communicate results upward
- Leaders: Tell team members what needs to be accomplished, challenge them to find the best way to do it
- Leaders are like coaches who rely on players to make decisions, not baseball managers controlling every move
"A leader is somewhat like that of the master learner among apprentice learners of all different levels, with the intention of developing more master learners to allow the organization to grow."
Continuous Learning and Teaching (42:05)
Kierlin emphasizes the importance of leaders constantly learning and teaching others:
- Leaders should spend significant time teaching and developing others
- This allows the organization to continuously replenish leadership
- Internal development is more efficient than bringing in outside leaders
- Even as a senior citizen, Kierlin says he is still learning and improving
Suppressing Ego (48:06)
Kierlin provides advice on how leaders can suppress their ego:
- Treat everyone as equals
- Learn to stay silent sometimes
- Be willing to get dirty and do any job
- Do good things anonymously
- Keep reminding yourself how little you know
"Even if you are smart, you're better off forgetting about it. Start thinking instead about how little you know compared to the vast amount of knowledge in the world."
Long-Term Thinking and Innovation (44:06)
Kierlin emphasizes the importance of thinking long-term and being willing to innovate:
- Focus on what's best for the future, not repeating past successes
- Be proactive in anticipating future needs
- Empower employees to come up with new ideas and solutions
- Example: Fastenal's development of industrial vending machines
"Anytime you stop thinking about the future, some people with better ideas will come along to eat your lunch."
Simplicity and Focus (34:05)
Kierlin advocates for keeping the organization simple and focused:
- Avoid unnecessary complexity and bureaucracy
- Focus on the core goal and eliminate distractions
- Rules should fit on a few pages, not thick manuals
- Regularly audit activities to ensure they serve the common goal
Ten Basic Rules of Leadership (52:07)
Kierlin summarizes his leadership philosophy into ten basic rules:
- Challenge rather than control
- Treat everyone as your equal
- Stay out of the spotlight
- Share the rewards
- Listen rather than speak
- See the unique humanness in all persons
- Develop empathy
- Suppress your ego
- Let people learn
- Remember how little you know
Conclusion
Robert Kierlin's book "The Power of Fastenal People" outlines the unconventional business practices and philosophy that fueled Fastenal's remarkable growth from a small fastener store to a multibillion-dollar global organization. The core idea is orienting the entire organization around a commitment to a common goal - for Fastenal, "Growth Through Customer Service".
Key elements of Fastenal's approach include empowering employees through decentralized decision-making, developing leaders rather than managers, continuous learning and teaching, suppressing ego, long-term thinking, and maintaining simplicity and focus. While the ideas may seem simple, Kierlin emphasizes that they are difficult to practice consistently over the long-term.
Ultimately, Kierlin sees leadership as setting an example that influences others beyond your own lifetime. He encourages readers to become leaders in their work and personal lives to make the world a better place through their actions and influence on others.