Executive Highlights: Entrepreneurship
Interviewee: Mr. H. Wayne Huizenga
Pushing forward past Challenge & Change
To gather a sense of the “day in the life of H. Wayne Huizenga,” please Mr. Huizenga, tell me a little bit about what your typical daily agenda consists of.
Well, I don’t think my day is any different than yours. Alright, we all get up in the morning and get ready to go to work and face the day’s challenges. Our challenges here are like https://experience.tripster.ru/experience/Adler/sights/ those of hundreds and thousands of people, doing the same things we’re doing; making different business decisions during the day. I don’t think my day is any different than yours.
In our business, we are trying to operate some of the businesses that we have. Most of them are out of this area so we do it by phone and the rest of the day is spent looking at business opportunities, acquiring, or selling assets or reviewing companies that we want to acquire or that we want to sell.
We are a small group of people here, probably, I’m guessing now 9-10 people in the office; maybe 12 with the support staff. So, we do a lot of things quickly. We have our own in-house lawyers, our own in-house accountants and we do whatever we need to do pretty much. We also use outside firms, you know outside accounting firms and outside legal counsel, but we’ve been doing this for so long that a lot of the things we do we can pretty much handle in-house. So that is basically what we do. Everyday is a new day. Most of the day is not spending time on managing our existing business, it consists more of looking at new opportunities.
Okay, so the in-house staff would basically help to expedite those business transactions for you?
Yes, they would be actively involved in making that decision.
Mr. Huizenga, as the creator of 3 Fortune 500 companies, a 5 time recipient of Financial World Magazine’s “CEO of the Year” and numerous other achievements, what have you found to be most challenging in general business these days?
I don’t think that anything we’re doing today is any different than what we did 5, 6, 8, or 10 years ago. Typically, we don’t do much of “start-ups,” we mostly acquire young businesses that are on the way up. Or sometimes a mature business where someone has passed away in the business and they’re looking to sell or something like that and they need capital to take that business to the next step That’s pretty much what we do on a daily basis here.
In the past, when things didn’t go the way you expected regarding business, how did you remain motivated; Especially in earlier years when you started with Waste Management and Blockbuster?
Well, we’re always motivated (he said with a pause and a smile). And so things don’t always go the way you wanted them to go but that doesn’t mean you don’t stay motivated. If a certain problem in a business has you sort of down in the dumps for the moment, it doesn’t matter, there are plenty of opportunities right around the corner…
You know, so “okay, fine, that deal didn’t go the way I wanted it to go, so on to the next one…” and if a certain problem in a business has you sort of down in the dumps for the moment, it doesn’t matter, there are plenty of opportunities right around the corner. We just try to deal with those opportunities and “get on with life,” so to speak.
Turning a new face on a new day.
What strategies have you found work for you to help in “pushing forward” toward your business goals?
I don’t think I would call it a “strategy,” I think it’s the people you hire that have the expertise, the leadership, and the personality to take it on to the next level.I don’t mind saying here, I’ve said it a hundred times before, that everybody here in this office is smarter than I am. That is the way I want it.
I think those are three key things and I don’t mind saying here, I’ve said it a hundred times before, that everybody here in this office is smarter than I am. That is the way I want it. I hire all great people, forward thinking and very intelligent. That’s the way I think it should be. When there are people smarter than you then they are always coming up with the great ideas.
How do you “plan ahead” for change or unexpected circumstances?
The environment we’re in right now, it’s a tough environment for a lot of businesses. It’s also an opportunity for lots of businesses. It’s tough for those certain businesses, “that are good businesses,” but perhaps were overly leveraged at some point- but their business was good, and now their business is down. Okay, now for these businesses, margins are down, revenues are down, etc.-but it is still a “good business.” Sooner or later the economy will be coming back… and by the way, I think it’s later than sooner. So if we can buy those companies…now…at a discounted price because of the circumstances of the economy than that’s an opportunity for us; and so yes, these are negative times now, but then turn that around and in the right situation it’s a positive.
As an entrepreneur, a manager, and a leader, how do you manage the impact of “change” on those you deal with in business and those you manage?
I think that everyday there is some kind of challenge, or change, opportunity, disappointment, some kind of positive and some kind of negative, you know what I mean? It’s just a routine thing that happens every day. Some days are a little more serious than other days, but that is just something we do here on a daily basis and we take it in stride. There are no ups or downs in this office “because of something not going quite right today.”
Dealing with People “the Deal Maker”
What could you identify as the top two most important qualities in a job applicant, potential business partner, or client (someone that you must deal with) that you believe would lead to “your” best possible business outcomes?
Oh, I think you want to hire people you think can be a “good” leader in a short period of time and a “great” leader over a longer period of time. But you’ve got to recognize that this person is someone who can fit into the organization and eventually be a great leader.I think you want to hire people you think can be a “good” leaders in a short period of time and a “great” leaders over a longer period of time
I’m talking about a younger person coming up, or if you’re hiring a more experienced person it is easier to tell whether that person has been a leader or not. So that’s pretty much what you’re looking for is someone who has the leadership abilities to take it to the next level and then after you make the acquisition or after you are running the business you have the have the confidence that that person can lead the charge.
Is there anything, during your initial interactions with people, that indicates to you, that this person may “take us to that next level?”
I think that maybe two thirds of the time that would come out in the interview process- if you didn’t know the person. But it doesn’t always come out in the interview process. Most of the time you can get a feel for the person and say, “yeah,” you may not be sure about his leadership, but you have a pretty good feeling about his personality. There are a lot of intelligent people out there that do not have good personalities, and that’s what holds them back.
His personality, being, is he going to be able to convince the person he is working with, or work with the other person effectively. So I think personality really plays a lot. There are a lot of intelligent people out there that do not have good personalities, and that’s what holds them back.
After working with many business partners, in different capacities, what have you discovered to be the least promising qualities- those that give you a sense that success is not likely?
Well basically, just the opposite of what I said before. If the personality is not there, if you don’t feel that they can be good or great leaders, than I think success is not likely.
You’ve been quoted as “one of the greatest deal makers of the 20th century,” what “makes the deal” for you?
I think flexibility is a big part of that. If you are a public company, you have a little more flexibility than if you’re a private company. If you’re a public company you can deal with stock, you can deal with cash in notes, you can deal with all cash if you want or whatever the case may be. For example, Steve Berard and I are partners in a company right now by the name of Swisher, and this morning is a good example. We spent a half an hour on the phone talking about a company that we want to acquire. It’s a good company…a great company with great margins; and the company is not really for sale. Now they do have a bunch of aggressive, nice young guys running the company, so… They are not just interested in selling the company and getting some cash and saying, “ok, so what do we do now?”
Okay, so how do we structure a deal for that? One that keeps them motivated, keeps them excited, and yet gives them some guarantee for what they have now but also gives them upside in the future? Because we are a public company, we are able to do that easier than if we were a private company- but you can do that if you are private as well, you know? So we agreed to some whole complicated formula today of some cash, some notes, some stock options, some upside potential over a certain number, and if its over a certain number you get more and then you give them an incentive to work harder and so forth. So you structure a whole different 3 or 4 or 5 different levels of opportunity for them, so that there is some certainty, and some security, and a couple of different levels of opportunity for them.
So basically, you are able to stand back and structure this entire strategy confidently knowing that they are going to sell…and they don’t even know it yet.
Leadership
How would you describe yourself as a leader and what traits do you think are necessary for a leader to possess?
I don’t know if I can relate to leadership as it relates to “most people.” Now to respond to leadership, as it relates to me, is very easy. Because like I said before, I’ve got great people, right? They come to me and say, “yesterday we looked at four deals” and “here’s what we think we should do…” and “this company has this and this company has this, but this other company over here has what both of these companies have, plus the owners are motivated and so forth and so on.” So, they almost lead me to the conclusion and to the point where they are almost the leaders rather than me being the leader because they’ve summarized the situation and laid it out very easily for me. Now, once in a while I’ll say, “yeah, but I don’t really like that industry,” or “I don’t really like that business” or something. So I might suggest that we pass on that one and if, perhaps we did “that other one, and this other one can tie us in with the business we bought a couple of weeks ago maybe we can merge those two together and maybe that will be something better…” We will talk about that for a while and kick around ideas. Around here, it is more of a “team” organization, more of a “team decision.” Somebody will agree and someone else will throw out another idea and say “well, if we look at it this way…” you know, from a different direction. So we kick it back and forth. There is just not one person here coming up with the ideas as to how we operate.
This ties right back in to what you mentioned earlier about surrounding yourself with intelligent people and being able to “identify” them as being a “good-fit” for your team in the first place.
I agree, you see, it would be different if you and I were sitting here having a conversation and we were running a business that had 3,000 people working for us and we had 5 plants around the United States and I was the Chairman and CEO and, you know? Now, you are talking more about day to day decisions and operational decisions and who rises through the ranks and who doesn’t and so forth and so on. When we are here, we do some of that with some of the companies that we own, but mostly we are looking at transactions. So it’s a little bit different for “us” as a leader.
Now in my old days, when I was CEO of different companies we had to do that, but today we operate a little differently.
What has been your most challenging leadership decision in the past few years; perhaps, with your consideration of the “old days” as the CEO of those companies?
When I was the CEO in the waste management business, you know, Waste Management or Republic Services, the businesses were pretty simple. Every day the trucks go down the road and pick up the trash. So really, the decisions were focused on “how do we grow the business” and “how can we become more efficient.” That is where you spend your time as a leader, it is to “leading the charge,” to become more efficient, more profitable, and more growth oriented than what your competition is.
Then you go to other businesses like Blockbuster Entertainment, okay now you are talking about being on the leading edge of some type of technology and you are doing something that no one has ever done before. Now, all of a sudden you are rolling out these video stores. When we were at Blockbuster we went months and months opening up a new video store every 17 hours. Well, you don’t open up a new video store every 17 hours! That is risky. Because it’s a new strategy, you are spending a lot of money building or opening a new store and stocking it with all of the video tapes that are in there. A lot of people still hadn’t bought into the concept that this was going to be a viable business. So, you are rolling it out like you believe, but a lot of other people didn’t believe.
Not only did you have to sell your employees but you also had to sell all your bankers, your investors and your shareholders that you were going down the right path here- so you roll these initiatives out. It wasn’t long, well, it was 7 years later when we said, “uh oh,” this is the time we need to start thinking about selling this business. So we sold that business for $8.5B and about 2 years later, maybe 2 ½ to 3 years later, the person who had bought it from us, sold it for $1B.
We recognized the opportunity going in, but we also recognized that there was a time that we should get out. It’s tough when you bust your tail for years and years and years and all of a sudden turn around and say, “okay, let’s sell this thing.” You know what I mean?We recognized the opportunity going in, but we also recognized that there was a time that we should get out.
But, we sold it at the right time; we got in at the right time and got out at the right time. So the timing was important there. But also, a lot of that is luck, and a lot of that is having the right people around working with you saying “hey, we have to be careful here…”
Who has been your biggest influence with regards to leadership? Why?
Well, through the years, in the old days, my first partner was Dean Buntrock at Waste Management. He was older and more experienced than I and was a great friend. He was a good leader and I learned a lot from him. Through the years, there have been other people along the way that I’ve learned from and watched and a lot of those people, we’ve been together for a long time now.
Operationalization (making it happen)
What strategies do you employ to assist you/your senior leadership team in ensuring that your business goals or benchmarks are met?
First of all, a “great idea” needs to be proven out first. You know, now, sometimes you have to move quickly, like in the case with Blockbuster. So you don’t have time to really, really prove it out. First of all, a “great idea” needs to be proven out first.
You have time to “test it,” so to speak. You don’t have the privilege or the time to spend 2 or 3 years testing it out. By that time, somebody else has already jumped in and now they’re the competitor. You have to work hard at “giving it the best test you can” within the time constraints that you have. Okay, and then fine, then you’ve got to pull the cord at some time or push the button at some point and say “okay, we’ve got to start moving.” That is when it gets touchy.
We’ve gone through that a couple of times and so far that’s worked out fine for us. You just can’t go do it, you’ve got to “test it” to see if it’ll work. We call it the “what if” theory around here. You know what I mean? A lot of smart people, thinking ahead, come up with the “what ifs.” You might be talking about all of the fabulous things you are going to do, and if you are one of those people that are positive, motivated, charged and challenged, you are thinking about all of the great things that are going to happen. But, you need a few people around that are a little more reserved.
To balance it out a little bit?
Yes, more of the “what ifs” people. What if this happens, or what if that happens, etc. You need to throw up all of those potential stumbling blocks. At the same time you’re thinking about rolling something out you have to have those stumbling blocks thrown up in the air. There again, the guy that’s charged isn’t going to do that. He needs someone he has confidence in, someone who can trust him, someone else who can contribute. I’m fortunate here because I have a good team. But, a lot of people don’t have a good team. Often they have to seek the advice from a legal firm or a consulting firm and they have to be careful that they pick the right people to give them the encouragement and they have to pick the right “what if” people.
What advice could you offer to an entrepreneur that is full of “great ideas,” but has not yet “made it happen?”
I don’t think that is unusual. I think that there are plenty of smart, intelligent people and there are those that have great “ideas” but that are not really “realistic” ideas and there are those that have good “realistic” ideas. I think there are plenty of people with good realistic ideas out there and the difficulty for them is getting the backing, you know, the funding they need, the right help to take them to the next step and so forth. That’s not an easy task. You don’t just hire anybody. You know, you don’t just pick up the phone or go to the yellow pages and dial up someone like that either. It needs to be someone you trust. The start up phase is the worst phase, I mean, it’s…the riskiest.
What leadership strategies have you found are not successful for you in your line of work? Why?
Again, it’s not really a strategy but a belief. That is hiring the right people with the right intelligence, the right ambition and the right personality to be able to take it to the next level. And, there again, if you have an idea, that is a 60% idea instead of a 90% idea, someone who has an aggressive, really intelligent personality can take that 60% and make it a 90%. Most people can take a 90% idea and go do something with it; it’s those in-between ones; that is how to do it; it’s how they take it to the next step that is important.
Final Thoughts
If there is one solid piece of advice you would offer to other leaders and striving entrepreneurs in your community, what would it be?
Don’t try to do everything yourself. Either hire or retain the right people, but there again, they have to be “the right people.” You have to have a person that can verify that he/she really is the “right” person. Don’t try to do everything yourself. Either hire or retain the right people, but there again, they have to be “the right people.”
I don’t really know a young entrepreneur that “does it all on their own.” They might own the company 100% but they are not doing it on their own. Very few do it on their own. You need some help along the way, whether it is on the finance side, or the money raising side, or the business guidance side or whatever. I would just search out those “right” people to assist you in taking it to the next level.
Mr. Huizenga, I sincerely thank you again and your Executive Insights are very much appreciated.