April 4, 2024
Dan Florness, President & CEO, Fastenal
How To Build A Fortune 500 Leader With Inexperienced People
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Not many leaders can say they’ve been at the same company for 30 years and been an active Rebooter of the organization along the way—taking it from a small town supplier to a global market leader. Dan Florness can.
As the President and CEO of Fastenal, a Fortune 500 leader in sectors from industrial supplies, logistics and consulting services to manufacturing, construction, and state and local government sectors, Dan and his teams have grown the company to 3,400 locations in 25 countries with 23,000 “can do – entrepreneurial” employees who delivered over $7B in revenue last year.
Dan shares his simple insights and stories on how to Reboot a small nuts and bolts supplier into a Fortune 500 leader, on this episode of The Reboot Chronicles Show.
Growing Globally Through Listening Locally
When talking about how a company grew from a small company in Minnesota to a Fortune 500 company, the first question that comes to mind is how did you do it? What is the key to your success? When asked, Dan told us that he lets his local franchises make the decisions that need to be made. As he puts it “we not only allow people to make decisions locally, we challenge them to make decisions locally.” Dan has trust in his local branches to make the decisions that need to be made based on what their customers want, and is not worried if they make a mistake. By showing their clients that they are willing to admit a mistake and fix it, the teams become more agile, and the client feels confident that they are still in good hands.
Investing In Inexperienced People Not Acquisitions
Corporate America is a fast paced and rapidly evolving place that often leads to high employee churn. Good leaders focus on optimizing their People, Platform and Passion for growth. Some companies get distracted along the way, always looking for the next big thing, like Metaverse or AI, but Fastenal seemed to take another approach. Instead of trying to always predict they react, and instead of employee churn they pride themselves on their base of tenured employees.
On the show we talk a lot about the Build Buy Borrow model of growth. How do you balance the things you can do yourself, versus the things that are better borrowed (partnering) or bought outright (M&A). For Fastenal their history of acquisitions is an interesting one. As Dan puts it, their first acquisition “left such a positive impression on our founder that our second acquisition was 30 years later.” Along with that statement Dan makes an interesting point, that buying a company doesn’t come with the years of knowledge that you learn from starting something yourself and learning through making mistakes.
On top of all of that, Fastenal has a university where they train people early on in a variety of ways, so that they can be even better employees and help the company grow quicker. They also pride themselves on actively hiring inexperienced frontline employees looking for a future.
A Global Future
We talked a lot about how Fastenal is growing and the way Dan is growing it in a broad sense, but let’s narrow it down to what Fastenal is focusing on in the upcoming years. One of the things that Dan mentions is growing overseas. Fastenal already has a branch in China as well as in the EU, but they are still small fish in those markets—which is a good thing. So the next major goal is how to adapt the business and the infrastructure of the business to the other countries so that they can begin to grow in those markets, while still maintaining the culture that they have cultivated. Seems like they are on track to be a $10B market maker.
