By Maria Saporta
Frank Blake, the retired chairman and CEO of the Home Depot, is not a fan of Amazon – a company that is disrupting the retailing industry.
“Amazon is a dark star,” Blake said. “I really don’t like Amazon.”
Blake was the guest speaker Monday at the Rotary Club of Atlanta, where he was asked about the impact of e-commerce on retailing.
For bricks-and-mortar retailers, Amazon has an unfair advantage. Its customers order products online, and Amazon bypasses the traditional retail establishment.
Fortunately, Home Depot saw the importance of e-commerce early on, and it adjusted its business to be receptive to online customers, Blake said.
“There are some retailers that are going to make it, and a lot (of retailers) will not,” Blake said without naming names.
“We are in a people business at a time when it’s unbelievably convenient to order things from the comfort of their home,” Blake said. Traditional retailers have to provide customers a rewarding in-store experience because the online competition is so intense.
Blake was especially critical of “Alexa” – Amazon’s gadget that responds to customers’ questions and commands, and also is available to fulfill orders for products delivered through the Amazon system.
Half-jokingly, Blake described Alexa as Amazon’s way of spying on customers.
But more seriously, when Alexa fulfills orders, it will show a preference for Amazon’s products, and the customer may not know whether it is getting the best deal.
“Every retailer is going to have to figure out its strategy for dealing with Alexa,” Blake said.
In his comments to Rotary, Blake spoke about the qualities of leadership and his experiences in government, business and the nonprofit sector.
When he was at Home Depot, he would spend his weekends writing hundreds of hand-written notes to employees (associates) to let them know how valuable they were to the organization.
“You get what you measure,” Blake said – quoting a well-worn business tactic. But then he added his own twist. “You get what you celebrate.”
When a CEO celebrates the successful work of his or her employees, it helps motivate the organization to move in the right direction.
Decades ago, Blake worked for George H.W. Bush, and he observed the leadership styles of the vice president and the late Gen. Norman Schwarzkopf during Desert Storm. Both mean knew how important it was to make sure everyone felt valued.
On the eve of Desert Storm, Gen. Schwarzkopf asked to visit the people who were in charge of cleaning the latrines demonstrating his commitment to “honor everyone on the team.”
Blake also worked for General Electric and its CEO Jack Welch. When he became CEO of the Home Depot, Blake asked Welch for help because he said he was “singularly unprepared for this job.” Welch provided annual guidance to Blake for eight years.
Towards the end of his tenure as Home Depot’s CEO, Blake asked Welch what was the single most important attribute of a leader.
“He said generosity,” Blake recalled. “If you are not energized by the success of the people who work for you, you will never succeed.”
Blake also spoke of his relationship with Home Depot founders Bernie Marcus and Arthur Blank – when he became CEO of the company they founded.
“Both of them were beyond kind to me when I came over to Home Depot,” Blake said. “They were unbelievably helpful.”
Although he has retired as CEO, Blake holds two significant positions in Atlanta. He is the board chairman of Delta Air Lines, where he has been able to witness two strong CEOs back-to-back: Richard Anderson and Ed Bastian.
Blake also chairs the board that oversees Grady Hospital.
“Grady is a great example of Atlanta’s leadership pulling together and saving a critical asset of the city,” said Blake, who pointed out that the Fulton County Commission had just made its first capital investment to the hospital in 25 years – a grant of $60 million.
It is part of a public-private $165 million campaign to expand and improve the hospital. Blake said he hoped the DeKalb Commission would also contribute in the near future, and he told Rotarians the business community also would be asked to participate.
“The other thing I’ve learned in business…you want people who radiate out. You don’t want people who absorb,” Blake said. “Grady is a radiating community.”
After Blake’s talk, Rotarian Stephanie Blank told the former Home Depot CEO that he should pen a new word – “Grady-ating.”
Blake also was asked about the value of business leadership in government circles.
“Business acumen is irrelevant in running an effective government organization,” Blake said, adding that business skills actually can be a detriment. “Government is about paying attention to other stakeholders and listening to find common ground.”