Episode 150 - Bob Kohlhepp - Leaders On Leadership
What does it mean to be at the top? What do you have to remember if you’re the company's CEO? Be aware of your responsibilities since you are in charge of managing your employees. Being at the top still requires that you listen to them so you could make smarter decisions for the company’s overall growth and success. Bob Kohlhepp is the retired Chairman and CEO of Cintas Corporation. Bob spent 50 years with Cintas was an important part of a growth story with sales growing from $1.6 million to about $8 billion today. But being at the top has its adverse effect, according to him. In this episode, Listen to valuable insights and tips in managing employees, hiring, motivating, and pushing everyone to the same objectives!
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Bob Kohlhepp - Leaders On Leadership
I have an amazing guest. We have Bob Kohlhepp, the retired Chairman and CEO of Cintas Corporation. Bob spent 50 years with Cintas and was an important part of their growth story, with sales growing from $1.6 million to about $8 billion now.
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Bob, welcome. Thank you for joining us.
Thank you, Tracey, for having me. I'm looking forward to it.
We get a lot of people on here that have very backgrounds. I myself have worked at quite a few things but it is going to be fascinating to hear about a leadership perspective that has been wholly focused on one particular industry and company.
I'm looking forward to sharing it.
My father wrote a speech called The Price of Leadership many years ago and it is still one of the most downloaded and listened to speeches. In it, he lays out the four things that leaders are going to have to be paying if they are going to be leaders in reality and not leaders in name only. Bob, the first one he talks about is loneliness. We have all heard the term what's lonely at the top. Heavy is the head that wears the crown. Bob, could you unpack for us what loneliness meant for you throughout your career, maybe at different stages and share with our readers how they should cope with loneliness if they are in that season?
It is lonely at the top. When you are the CEO of a company, everybody is looking to you. You have to make the final decision. The buck stops at your desk. I would tell you that the most pressure I felt in my job was the fact that when I stepped down as CEO, we had a little less than 30,000 employees. We always realize that there were 30,000 families counting on me to make the right decision.
It is lonely at the top. When you're the CEO of a company, everybody's looking at you. You have to make the final decision. The buck stops at your desk.
There is a lot of pressure in that because if you mess up at a company, people can lose their jobs and their investment in the company if they are shareholders. It is a tremendous responsibility. There is no question about it and it is lonely at the top but there are some key things you can do to deal with that loneliness. The first thing is to have a good mentor.
I was very fortunate that the founder of our company was my mentor and my boss for most of the 50 years I was there. He was a great person to consult with, get advice from, pick his brain and rely on the experience that he had because he had been there before. One of the things leaders have to do is to look for people in their life that have been there before and then talk to them about what did they do under these circumstances and so forth.
The other thing you can do to fill that gap is I was a member of YPO, the Young Presidents’ Organization. When you have the ability to talk to other people who are in the same position that you are in, go to them and say, “I have this problem. Have you ever dealt with this before? What did you do? How did it work? What would you have done differently?” If you can't join YPO because you don't qualify or are not interested, you need to have some group of people that are confidants or you can go to for help and input. I would be looking for people who have been there before whenever possible.
The third thing I would tell you is you need to develop confidence within your organization. I always found that there were people within the company who I had a great deal of respect for. When I was challenged with a problem, I would frequently call one or more of them in say, “This thing has come up. Here is what I think we should do. What do you think?” There were usually 2 or 3 people.
If you have a good head of human resources, they can be a great resource because frequently, when other people in the company have a problem, they might go to the head of human resources and talk to him about it and not necessarily come to you. It is great to have a head of human resources that is a confidant of yours, that has their ear to what is going on in the company and that you could use as a sounding board and as a person that can give you good input. If you do those three things, you can deal with that loneliness at the top.
I love you hit on the three different areas. Napoleon Hill Mastermind Groups, alone sheep is the dead sheep. I love that you talk about within the organization lateral, outside the organization, your YPO because you still need people from outside. Sometimes you get so insulated. I love that the founder was your mentor. Is he the one that recruited you to the company?
Yes.
Did you have any idea where it was going or how big it was then when you first started?
CEO: The level of innovation in any company is directly related to the number of tribes. So you got to let your people try things, even if they're things you don't necessarily agree with.
It was $1.6 million in sales.
How many people were there?
Sixty-two.
Have you found him or did he find you? Was it in the local proximity because this fascinates me how people come together at the beginning of their career?
What happened was he reached a conclusion based on advice he got from an outsider that he needed to stop hiring people from within the industry to come to work for him and hire young college graduates who could grow with the company. When they hire people within the industry, frequently, they are not college graduates. They would do a good job for 2 or 3 years and all of a sudden, the job would double in size and they couldn't handle it anymore.
He went to a friend and his friend said to him, “That’s what you need to do.” If you look at the great companies in the country. Procter and Gamble are right in Cincinnati. IBM, Google, whatever company you want to talk to. Most of them hire people right off of college campuses and they grow on their own. He said about contacting his insurance broker, banker, lawyer, CPA and say, “Be on the lookout for a young person who you think has some potential.”
Coincidentally, the lawyer for Cintas was one of the people he contacted. He and I were practicing CPA. The lawyer and I had some mutual clients. I said some things in several meetings that the lawyer was very impressed with. He called up Dick Farmer, who was our Founder and said, “I got this young guy and you should talk to him.” The first thing Dick said was, “How old is he?” He said, “He's only 23.” Dick said, “I would like to have somebody that is a little further along in their career than 23.”
Give people leeway to make mistakes.
What Dick didn't realize is I went to a unique high school in my area. I graduated from college when I was nineteen. I had four years of experience at age 23. He didn't know that when he heard 23. Dick called him a second time. When he called me, he said, “Bob, I have an open position at the company. It happened to be a comptroller. I have heard some things about you. I would like to meet you and talk to you about maybe coming to work for me.”
I said, “Dick, I'm very happy where I am. I have no interest. Thank you very much.” I hung up. I came to know Dick Farmer was a persistent man and he kept calling me back. Finally, he said to me, “What harm can it possibly be if we spent an hour or two together and talked.” Once I met him, we hit it off like a hand in a glove. I could see that he had a vision for where he wanted to take the company. He said I could help him achieve that vision and if I did, I could be successful as he was. That is how it all started back in 1967.
Did you come in with your accounting or your financial background? Did you start in that role at comptroller? Did you bounce all over CFO before you went to CEO?
I started as a comptroller and then we were growing. Dick decided to go to Cleveland to build the company and, believe it or not, at the rifle age of 24, he made me the general manager of the company he built. He said, “Here is where you are running.” That was great. We were on the phone constantly. I’m like, “What do I do about this? This guy quit. What do I do about that?” We were in constant communication. I went from general manager and then I went back to become chief financial officer. I became executive vice president. I became president and chief operating officer, CEO, vice chairman and ultimately chairman.
Outstanding input on how to combat loneliness, anticipate it and be intentional about people because there are only certain things that you can talk out with certain groups of people and have them on speed dial for whatever happens. Thank you so much for that, Bob. The next topic my dad talked about was weariness.
To stay and grow, we are more tools, although sometimes we like to think we're more than that but it is tiring. How do you stay at the top of your game because you have to be in fit, fighting form to lead the troops? How do you deal with weariness? Can you share with us a time when it almost got the best of you?
The way you do that is with humility. You do that by having humility. Recognizing that you are not always going to be right, people in your company doing the work know more about what is going on than you do, just because you have a college degree or you have this title manager, supervisor, whatever might be behind your name, there are other people in the company who have more experience than you do.
You have to follow the advice my father gave me and that is you have 2 ears and 1 mouth for a reason. You have to listen a lot and you have to listen to your people. I used to tell my people all the time that the answer is never in your office. When you have a problem, go talk to your employees and customers. The employees always know what is wrong. Usually, they even know how to fix it.
CEO: You need to have some group of people that are your confidants and people that you can go to for help and input.
Many people think that because I have got this vice president position, I'm supposed to know. Rely on your people. They are standing next to the problem all day, every day. They see and understand it. They wonder why somebody has not asked them. What do we need to do to fix this? Humility is an important asset.
Your health is an important part of dealing with that situation. I always try to watch what I eat. I exercise regularly. It took the edge off and frequently, almost every night when I went home. The first thing I do is put my gym clothes on, go down to my basement and run on the treadmill. I found that I go home, I would be tired but I was not tired. I was more stressed and that exercise took the edge off. You need to do that as well.
There was a time when we started up a distribution center that I was in charge of. It was automated and we had the old distribution center that was manual. We thought we had worked out all the bugs in this new automated system and we shut down the old distribution center. We brought everything to the new distribution center and all of a sudden, boxes were supposed to go down. This conveyor went down. That conveyor was an absolute nightmare. I slow out to myself, “Maybe the Peter Principle got me because this thing is messed up. We were missing shipments and so forth.”
What I did was I went to my people and worked out a plan. Everybody knew what they needed to do. I will tell you, if I had been a rope in my office after everybody left, I might have strung myself up because I was so down but I never let my people know that. I always told them, “We will get this fixed. It is going to be okay. We'll survive this. This is just another problem.”
I have been asked many times on these podcasts, what is the most important ingredient or trait that successful people have? Without hesitation, I say, “Dogged determination.” You are going to get knocked down. The roads of success are always under construction. The people who do it over the long term are the people after they get knocked down, learn from their mistakes, dust themselves off and get right back into the game.
That dogged determination, in my opinion, I don't care whether you are in business, academia, the medical profession or whatever it is, is an asset that every successful person has. Never give up. Always get back in the race. Learn from your mistakes. I used to always say, “I have no trouble with anybody making mistakes. The only people I know who don't make mistakes are people who don't do anything. The people you worry about are the people that make the same mistake over again. Those are the ones you have to deal with.
As you are a boss, I would give people leeway to make mistakes. It is okay. You got to try things. The level of innovation in any company is directly related to the number of tries. You got to let your people try things even if they are things you don't necessarily agree with. You can't jeopardize the whole company with those decisions. They got to be smaller decisions. Somebody once told me that Thomas Edison invented the light bulb on 676 tries. If we would cut him off at 600, we would all be sitting around with flames and candles. That is the mindset you have to have when you are the boss.
The road to success is always under construction.
I love that you brought up the humility aspect and weariness because a lot of times, we carry the burden and we are not meant to do it alone. Your team is there to help. Otherwise, you have the wrong team. Somehow we think, “I have to have all the answers.” It was like, “You have to be able to find all the answers. That comes from the people.” Loneliness, weariness and the next thing my father talked about was abandonment.
Abandonment typically gets a negative connotation, fear of abandonment by work in pet rescue. Abandonment is a big no-no. His sense of abandonment was we need to abandon what we like and want to think about in favor of what we ought, need to think about and be doing. It almost is a pruning of the non-value-added things. In other words, a real hyper-focus. I'm sure, Bob, as you were growing the company, you had a million people come up with a million different things every day. They were good. As we know, good is the enemy of great. How do you stay on point and avoid mission drift, as we call it the military, scope creep?
Any leader has to understand you have limited resources of people, capital and other ways. You have to direct those limited resources to the areas that are going to make a difference. I would say the first thing you have to do is to have a vision. Where are you trying to take the organization? We had a very clear vision in our company as to what we were trying to do and the way we wanted to do it.
We need to go back to that vision. We also had a principal objective in the company. Our principal objective was to exceed our customer's expectations in order to maximize the long-term value for our employees, who would be called partners and our shareholders. Every decision we make, we would go back to does this ties into our vision and principle objective? If it didn't, we should not be doing it. That's one way in a macro way. You need to do it.
The other thing is I would always have my yellow pad and back before we had iPhones and things like that, my list of things to do. In the back of my legal pad, I had two things, my job description and my goals. On the first of every month, I would get my job description out. I would get my goals out and I would say to myself now, “Did I spend the last 30 days focusing on these things or were there a whole bunch of other things?” Frequently the A priorities are much more complex and more difficult to solve. We have a tendency to do a lot of Bs and Cs and have the feeling we got a lot of things done and the As are sitting there gathering dust. That little system that I had kept me to be focused on the A priorities.
Have you ever heard of the Ivy Lee Method? You worked for Schwab and you would say the day before you listed rack and stack your top six priorities. That keeps you focused on point. I love that because we think we're doing stuff and we're getting stuff done but the A priorities are the biggest levers that are going to move the business forward. That is wonderful advice for our readers.
Lastly is the vision. A lot of people, when they think leadership and vision, you almost think they have to be touched by an angel. It is esoteric and very like Nostradamus but my dad would always say, “Tracey, vision is seeing the future and then executing it.” How did you see the vision of Cintas? You watched a long-term vision. Not only stay on point but go into the creative sphere. Tell us about what vision meant for you and how you guys would tweak it, modify it, breathe some new life in it. How did you do that?
We did it very deliberately. It was up to the CEO. Dick Farmer and I became CEO in 1995. It was my job to paint the vision. We need to look at what's happening in your industry. Where do you fit in your industry? What could disrupt your industry or your business and be able to look forward 5, 6, 7 years and see where it is all going.
CEO: You have two ears and one mouth for a reason. And so you have to listen a lot and you have to listen to your people.
The simple description of a vision is it is like the picture of a jigsaw puzzle. When you are working on a jigsaw puzzle, most people have a box that got a picture on the front of it. They're constantly going from putting the pieces in place, back to the picture, back and forth. Without a picture, which is the vision, people don't know what they're doing and how it fits into the overall organization.
Dick Farmer used to tell a story about three guys digging a ditch. The guy walks by and he says to the first guy, “What are you doing here?” The guy says, “I'm digging a ditch. What's it look like up there?” He asked the second guy, “What are you doing here? He said, “I'm digging a ditch. This is where we're going to put the plumbing for this building we're building.” He asked the third guy and said, “We're digging a ditch and this is going to be a magnificent cathedral. It is going to have 4’s and 5’s. It is going to have 25 stained glass windows. It is going to be this and that.”
The third guy has the vision. The CEO's job is to paint the vision but equally, if not more important, communicate the vision ad nauseam so that everybody gets how their job fits into the overall picture. In fact, I teach a course on leadership. The very first trait that I've found nine key traits of leaders is vision. You need to know where you are trying to take the company and then you need to know how to communicate that to the people working in the company and what they do each and every day, week and month ties into that overall plan.
You have to spot things when people get off track with the vision and make sure that they get back on track. It doesn't mean they're not doing a good thing. They are just not doing something that fits into the overall plan. That happens frequently in a company where the CEO doesn't paint and communicate the vision ad nauseam.
You hit on something important. You want to have it clearly delineated or bounded because all things are exciting. We could try a million different things. I would tell people, “Park in that parking lot. Let's stay on point.” Even in publishing a book, “That's a great sub-topic. That can be your next book.” Let's stay focused on this. I love that everything you talk about goes back to that puzzle. You don't say, “Here's the puzzle and here's another picture. Just get it there.”
The vision has to change over time because sometimes 3/4 approve the vision and now you got to be looking out another 5, 6 or 7 years. We would tweak it from time to time. We will constantly review it annually to be sure it all makes sense and fit what the situation was. The communication of the vision is, if not more important, as important as creating division.
Bob, thank you so much. You have taken us through loneliness, weariness, abandonment and vision. Since we have got somebody with your pedigree and your decades of experience, I want to open it up now. What other things about leadership are near and dear to your heart? You are like the sage on a stage now. You can reflect back and pontificate, maybe some things you saw or what's on your heart to share with contemporary leaders for now.
It's much harder to pass down your values than is to pass down your wealth.
I would say a couple of things. Number one is the importance of culture. Every organization has a culture. If you think about the family you grew up in, the high school you went to or the college you went to, there were certain values that were there. There were certain things in your family that your mom and dad felt very strongly about and they made up your family's culture.
Every organization, company, nonprofit, institution or higher education is a culture. The job of the CEO is to articulate. What is that culture? What do you want people to do? How do you want them to conduct themselves? How do you feel about your employees? How do you feel about your customers? What is the work ethic in your company? All those things need to be defined. If you establish a culture, you naturally attract people that are compatible with that culture.
In fact, we would even interview people in two steps. Step one was, are they qualified to do the job? Step two was, will they be compatible with our culture? We spent as much time on step two as we did on step one because if you hire somebody who wants to work 30 hours a week and you have a company where you typically work 55 hours a week, it is not going to work. You need to find out about that before you hire, not after you hire.
We used to call our culture the ultimate competitive advantage because I believe that if you can get the majority of people, you always strive for all the people but the majority of people in an organization is like a big boat and everybody has an oar. In many organizations, you see half the people row in one way, half of the people row the other way and the boat somewhere. If you can get the majority of people in your organization rowing in the same direction, meaning having a set of values that they buy into, believe in and live in every day. It becomes an awesome force.
That's something we spent a lot of time talking about. We've written books about it. We taught courses on it. Every new manager that came into the company had to go to the course. If you read Jim Collins' book, Built to Last, he talked about all the companies he studied. He looked at the leader in that industry. He had a cult-like culture. I don't mean that in a bad way but everybody drank the Kool-Aid so to speak. That is important because it is intangible. Your competitors can't copy it. You can't see it but it is real.
Can you talk a little bit about the book that you came out with, Build A Better Organization?
My book is broken down into three parts. We talked about the first part. It is about culture, principle objective, corporate character, management system and business ethics. The second part of my book is about people. Let me pause on that part of it because we haven't talked about that. I once attended the women's Final Four many years ago, when the legendary coach Pat Summit coached Tennessee. My wife and I were the hosts for University in Cincinnati that I was very involved with because the Final Four was going to be in Cincinnati and the university was the host.
Iowa City is where the regionals are and the University of Connecticut was number one undefeated. Somehow, Tennessee upset them in the regional. They came to Cincinnati and won the Final Four. I was in the press conference where Pat Summit was being interviewed by the reporters after she won. One reporter said to her, “Coach Summit, would you share with the other women's coaches how you've been able to win four national championships in the last nine years?”
CEO: When you have a problem, go talk to your employees and customers. Your employees always know what's wrong. Usually they even know how to fix it.
Without hesitation, she said, “Recruiting.” I have never ever forgotten that night because I have preached that to our people, recruiting and hiring the right people. You can be the greatest coach in the whole world but if you don't have good players, you are not going to win many games. We developed a system we called Meticulous Hiring.
I don't care if you were the janitor. You had to go through 6 or 8 interviews. We will check your references religiously. We know more about you than you knew about yourself before we hired you. We understood that when we lost people, we would go back, do studies and realize, in probably 60% of the cases, we shouldn't have hired them in the first place.
The hiring process is a very arduous, time-consuming process. We have a human tendency to compromise in that process because you are busy, you are interviewing people at night on Saturdays and you want to get it over with and get back to doing your job. What do you do? You compromise. You should never ever compromise on a hiring decision. You need a very arduous process on how you go about recruiting.
As I said earlier, “We would not only determine if this person is capable of doing the job. Do they have the qualifications?” We would spend as much time in, not more on, are they going to be compatible with our organization? We would ask a lot of situational questions because it was built on the premise that past behavior predicts future behavior.
We would ask questions like, “What's the toughest decision you ever made? Tell me about it. How did it turn out? Would you do it differently now? Who's the best boss you ever had? Why? Who's the worst boss you ever had? Why? How did you deal with that bad boss?” A number of questions like that and was always about here's a situation, how did you handle that situation?
Most people will handle the next situation like they handled the last situation. We had a distinct process and you would go through eight interviews. If those eight people would get together and compare notes, if any one of them said, “We shouldn't hire them.” We didn't hire. We would go back to ground zero. The rule was when you hire somebody you are excited about, you are still going to be wrong 20% to 30% on time. When you hire somebody, you are warm about. You will be wrong every single time. Don't ever forget that.
For the leaders out there, we are not God. We can’t see in somebody’s heart but from the military and a big due diligence person, I appreciate we can only know as much as we can know but the more upfront and then if you don’t, it goes exponentially higher. I tell people, “If you want it bad, that's how you are going to get it. Don't do it.”
Most successful companies hire people straight from universities and nurture them to grow within the company.
The other thing that is part of our process is checking references. We always require the hiring manager to check references. Another question I would ask in the interview is, “In your last two reviews, what areas of improvement did your boss ask you to work on?” I would ask them the same question about the previous job if it was within the last 5, 6 or 7 years. I would call the boss and ask him the same question. You would be surprised how often the answer is different.
I wouldn't be surprised. That's brilliant. Do you let them give references? Do you always go back to previous employers and call them as a reference?
If you were interviewing with me, I would say, “Who was your boss in your previous job? Is she still there? What position is she in? What city is she in?” I would find out you would never call the human resource department. The human resource department will confirm dates of employment and salary. If you have a number, they won't tell you anything else because that is what the lawyers tell them not to do.
I would talk to the person they worked for. I would not take no for an answer. If I would call that place and they would say, “Mr so-and-so retired 2 or 3 years ago.” I say, “I have a very important matter. I need to talk to him. Do you tell me how to get ahold of him?” They would give me his whole number. I would call him at home.
For our leaders out there, that is so important to get the rest of the story and to get a well-rounded concept. That's why I tell people, “Don't burn bridges.” You never even were there but yet you are going to have to say you were there. It is important that your professional pass is always going to be there.
The other thing I would end to that is if you think you can know somebody in two hiring interviews better than somebody who worked for this person for five years, you are putting it to yourself. Frequently, they do not open up with those kinds of things because if you are talking to a high-level manager. They're aware of potential exposure. They say something they shouldn't say.
I remember I was hiring an engineer one time and he worked for Procter and Gamble. He was leaving Procter and Gamble. I called his previous boss and I said, “Tell me why didn't this guy move into management?” He said, “Bob, we hire hundreds of engineers every year. Twenty percent of them go into management, 70% of them are remaining engineers, 10% of them leave.” I said, “Where was he?”
He says, “He was in the 70%.” I said, “Why wasn't he in the 20%?” I got gibberish. I didn't get a straight answer. Finally, the guy was getting upset with me because I kept probing. He says, “Let me put into this way. If I had a row across to the English Channel and I was allowed to put five other guys in the boat with me, he wouldn't be one of them.” I said, “I got it.”
That is certainly sage advice. Bob, what are you doing now? Tell people how they can get in touch with you. If our readers are thinking, “I would love to talk to Bob.” Either to have him speak, get his book, maybe as a mentor. Can you share with our readers how to get in touch with them?
In the jobs that I have had over the years, I have worked very hard. Because of that, at times, I miss some family things that I wish I could have attended. If it was important, I was there but I missed a lot of soccer games, plays, musical recitals and all that thing. I'm 78 years old in 2022 and I have devoted a lot of my time to imparting the knowledge and wisdom that I have been able to accumulate over the years to my children, the experience in a lot of different areas.
CEO: The CEO's job is to paint the vision, but equally communicate the vision ad nauseam so that everybody gets how their job fits into the overall picture.
I'm very close to my children. We talk a lot. I need to pass on to them because one of the things that I believe very strongly in is it is much harder to pass down your values than it is to pass down your wealth. I'm focusing more on passing down my values than passing down my wealth. That's one thing I'm doing. I don't work 80 hours a week like I used to. I have time for golf and a few other things.
I have a website called RobertKohlhepp.com, where you can listen to all my podcasts and a number of articles that I've written. You can order my book or you can order it through Amazon or Barnes & Noble. That's been a fun thing to do. I will tell you I'm not sure I'll write a second one because there's a lot more work than I thought it was. I was so pleased to be able to capture the knowledge and the experience I had in a book because I felt like I didn't want to leave this Earth with all that being in my head. That's where I spend my time nowadays.
Bob, thank you so much. I learned so much and it is wonderful to sit and listen to the wisdom of a real season leader like yourself. Thank you for sharing your insights and time.
Tracey, thank you for having me. I appreciate it.
You are welcome. For our tremendous leaders out there, thank you so much for being part of our Tremendous Tribe. If you like this show, be sure and hit the subscribe button so you don't miss any of our future episodes. We would love the honor of a five-star review. Hit the like share, drop us a line, drop us a comment, reach out to Bob, read a Tremendous book and keep on paying the tremendous price of leadership. Be sure and check us out on TremendousLeadership.com. Thanks so much for being a part of our Tremendous Tribe. Have a tremendous rest of the day. Bye-bye.
Important Links:
Amazon - Build A Better Organization
Barnes & Noble - Build A Better Organization
About Bob Kohlhepp
Bob Kohlhepp is the retired Chairman & CEO of Cintas Corporation. Bob spent 50 years with Cintas was an important part of a growth story with sales growing from $1.6 million to about $8 billion today.