Herbert V. Kohler Jr.,
who died on Sept. 3 at the age of 83, was one of the greatest business leaders that Wisconsin has ever had.
I had the opportunity to interview him twice, and they were major highlights of my 25-year journalism career.
I first spoke with him in 1998 when I was a reporter for the Sheboygan Press. It was the opening day of the U.S. Women’s Open golf tournament at Blackwolf Run, which Kohler had built. The event was an enormous success and attracted record crowds. That same weekend, Kohler opened Whistling Straits golf course north of Sheboygan, which would later host three PGA Championship tournaments, the U.S. Senior Open and last year, the Ryder Cup. It was extraordinary to speak to him as he was on the verge of establishing Wisconsin as an
international golf destination.
Then in 2007 I had a lengthy interview with Kohler for a cover story for Small Business Times (now known as BizTimes Milwaukee). During his 43 years as CEO of Kohler Co., he transformed the company, established by his grandfather in 1873, into a world leader, with more than 40,000 employees and dozens of manufacturing facilities around the world. It was a tremendous opportunity for me to pick his brain on how he had done it, and to share that wisdom with our readers.
As a tribute to Herb Kohler's incredible career and life, the vision he had for Kohler Co. and the impact he made on the state, here are portions of that 2007 interview:
What are the key philosophies and best practices that are most important to your company’s success?
Kohler: “The first best practice is that we are privately held. Our people are not focused on quarterly results, even though we maintain many of the disciplines of publicly held corporations. We look at longer-term results. And we’re considerably different than a corporation owned by private equity. Those folks have mountains of debt and have to suffer the rigors of extracting cash from those companies. Our weakest competitors are either publicly held or owned by private equity.
“We have a mission. Everyone in this company, regardless of what business they are in, kitchen and bath, power, furniture, hospitality, are in pursuit of this mission. Our mission is to raise the level of gracious living of everyone touched by our products and services. That means that every customer … that buys a plumbing product, or an engine or a generator, plays a game of golf or stays in a hotel room, comes away feeling strongly positive about that experience. So much so that if that person talks about that experience a year from now or five years from now, invariably that person will smile.
"If we produce smiles, we’ve done our job."
"Not just momentary smiles, but deep-seeded smiles. If we produce smiles consistently, we are attaining our mission. But we have to do it thousands upon thousands of times every day.
“Now, to do that we have a couple of guiding principles. The first is that we live on the leading edge in design and technology in products and processes. Nothing we do can be a copy. With a copy, you’re not on the leading edge. That guiding principle, if we in fact do it consistently, is what makes this place so much fun because we are all charged with doing something better today than anything we did yesterday or the day before. Our job is to bring something new to this world, continually, and not clutter it up with the same old thing.
“The second principle is that we have a single standard of quality in everything we do. Making an engine, making a bathtub, producing a restaurant.
"It’s that single standard of quality above the norm that creates the reputation of Kohler."
“And then there’s a third principle that’s pretty important. And that is we take 90% of our earnings and reinvest it back into the business year after year after year. And that produces the fuel for growth.”
When you have a new idea…what is the key to making that innovation happen? A lot of entrepreneurs have what they think are great ideas, but they don’t know how to execute them to make them realities.
Kohler: “One of the real keys is producing prototypes, because you are going to find that as good as the idea might be, it’s going to have a lot of bugs. And in producing models, prototypes or samples, you’re going to find just a slew of things you would like to change. And to the extent that you do that, you will come up with a much better finished product than if you just took your first shot and out you went.”
So much of what you and your company have done has been successful. Have you ever done anything in business that wasn’t successful? Have you ever made a mistake? And if so, what did you learn from it?
Kohler: “I could give you an exclusive story about all of my mistakes (laughs). And, we’d have a lot of fun with it. Once upon a time, I thought we should buy our largest distributor of plumbing products in France as a stepping stone into our own distribution in Germany. It was a bloody disaster. They simply weren’t capable of adapting, and we found ourselves competing with our customers, which is something you never want to do. So, after some serious financial decline, we sold it and went on to much better things. That’s an example of cutting bait. This company doesn’t often have to cut bait because it usually studies its opportunities very well before it invests. And when we invest, we are pretty darn certain that it’s going to be successful. It may not come out with the timing that you expect, but that’s one of the great benefits of a privately held company. We can persist with a good idea, whereas a publicly held company cannot do that. They have to produce immediate results, and if they don’t, bang, away goes the good idea.”
How would you describe your leadership style, and how would you say it compares to the leadership styles of the other members of your family that have run this company?
Kohler: “My style is different than my grandfather’s, my father’s, my uncle, my children. We’re all different. What I bring to the party is ideas and the little sparks of fire, of interest, of potential. What we have in common is that we have this mission and this same set of guiding principles, and that’s far more important, ultimately far more important than simply trying to drive a profit and loss statement."
"We will get much better results, financially, by driving the mission with guiding principles than we will (being driven by) a P&L and a balance sheet.”
Click here to see the full 2007 interview with Herb Kohler.
