Vendor Newsmaker Q&A: Michael Rosenbaum

What inspired you to share his story in Six Tires, No Plan?

There’s something intriguing about a guy who builds a billion-dollar empire, engenders intense loyalty among his workers, and yet remains absolutely unknown outside his small sphere. As I dug into his history and the evolution of his philosophy, I was similarly intrigued by the simplicity of his approach. The fundamental truths that generated his success are no secret. We all know them, but we often pay only lip service to them. Halle, though has applied these simple truths in a consistent and humble way to achieve his success. In the end, you realize that anyone could be Halle and do what he did. So the question for all of us is, why not?

Halle is an inspirational leader who has given back to his employees and the community. How does his generosity help retain loyal, productive workers?

I was talking to one of the company’s managers about Halle’s willingness to step in with a flight on the corporate jet or any other aid he provides to employees in need. I asked if she ever needed that kind of help and she answered, “No, but it makes me feel comfortable to know it would be there if I needed it.” People know Halle is loyal to them, but he also insists that they be similarly loyal to each other. When people in the regions or stores get together to raise funds for a local cause or to aid a fellow employee, their loyalty to each other and the company grows –even if Halle is not involved directly.

His first tire store was in Michigan, home to the automobile industry and where he was raised, but his significant expansion led him to Arizona and two dozen other states. How was he able to grow into an 800-store chain over 50 years by selling a commoditized product with lots of competition?

Halle doesn’t sell tires. He and his team sell themselves. That’s an important distinction. In my consulting work, I often find a disconnect between what the customer buys and what the client thinks he sells. I didn’t find that gap at Discount Tire. If consumers can go to 20 nearby stores and buy essentially the same tires in every store, there’s no competitive edge to product selection. Discount Tire offers low prices, but customer loyalty attaches to the people in the store. You have to hire the kind of people who can generate that loyalty, but it pays off quite well if you do so.

Halle introduced a few other services and products over the years but most of them didn’t succeed. He eventually decided to not get into auto repair and other logical, related areas. Why?

These areas are strongly related, and logical, if you are thinking about the auto industry. Look at it from the customer’s perspective, though, and the match is not necessarily as perfect. Customers want good selection, low prices and good service. They also want to spend as little time as possible in the waiting room while their cars are in the bays. Tie up one bay for a day with a transmission job and every other customer has an extended wait-time. Over time, Halle found that doing one thing very well would generate both customer satisfaction and corporate growth.

Halle came from a large family and no money. He grew up in a small town during the Great Depression and served in the Marine Corps. How did those early years and later boot camp help mold him into a leader?

He learned the importance of the team, whether that team was his military unit in South Korea or his extended family. As he learned that he could be the leader of a team, not just a member, he still saw leadership within the context of the larger group. It’s impossible to identify a specific moment when it all began to gel. But it’s clear that Halle knew he had to depend on others, but did not want to be dependent on them. Possibly as a result of being in a family that obtained help from others, or because he was inspired by people who owned businesses, he definitely developed a preference for being the giver, rather than the recipient.

PAGE 3

As a businessman you served as the president of the nation’s largest investor relations agency. From that perspective, tell us what you admire most about how Bruce built up and runs his company?

I’ve had the opportunity to advise C-suite executives at more than 150 large companies, including the founder/CEOs of dozens of firms. Less than a handful of these founders cultivated either the productive culture or the long-term success that Halle achieved – and I can’t think of any who achieved both. Ultimately, all business is about people. Whatever the product, whatever the price, relationships and trust among people drive success – or failure. Bruce Halle has achieved a nearly impossible level of success by engaging, inspiring, rewarding and retaining good people. It’s a reminder to managers everywhere that it’s important to put away the spreadsheets and performance metrics and figure out how to motivate and inspire the people behind the numbers.

What role, do you believe, Bruce’s faith plays in how he treats others in business?

It’s very challenging to describe one’s own faith, much less that of another, but I believe his faith plays a major role in his life – including business. Bruce recognizes, first, that he is human and flawed. That knowledge drives him to be less judgmental and more patient with the failings of others. He doesn’t always succeed, of course, but he makes a more consistent effort than you see with most people. There are aspects of servant leadership in his approach, especially when it comes to caring for employees, hitting the reset button and giving credit to others. There’s no question who is in charge at Discount Tire, but Halle makes an effort to lead by example more than fiat.

Bruce talks a lot about “paying forward.” Tell us what that means.

When you receive a gift, you have two obligations. One is gratitude to the person who provided the gift. Second, and possibly more important, is the need to mirror the giver’s act by providing a benefit to someone else. There are givers and takers in the world. Halle wants employees who are givers, who recognize their own good fortune and are willing to share it. Those people are more likely than the norm to pay forward to customers and build strong relationships in the stores, or pay forward to other employees and increase the loyalty within a team. This emphasis flows in large part from Halle’s faith, but the real world business impact is measurable.

You write that Halle’s company was built around the employee and not the customer. How so?

This is a seemingly contradictory statement to make about a company with such high customer satisfaction levels, but it’s more an issue of how you get there than it is about the goal. In the beginning, Halle wasn’t thinking about compensation strategies or the psychological profile of employees. He was thinking about getting people to join his team and build the business. He tended to look for people like himself, people who were willing to work hard and smile while doing it. If he could attract and retain them, they would make it possible to expand. So the development of the right employee base and culture became the foundation for superior customer service levels.

No one gets hired as manager of a Discount Tire store, even if they managed one or more stores elsewhere. Why?

This works on many levels. First, you want managers who know the Discount Tire systems and can teach them to others. Second, you want people who can support and continue the corporate culture, so it’s productive to look among people who are part of that culture already. Possibly most important, every person in the company sees the process as fair. Nobody works five years and has some outsider jumping into line ahead of him. Getting the keys to the store is a major reward with significant financial benefits and autonomy. Halle thinks that kind of reward should only go to someone who has already made a contribution to the company by earning his stripes in a Discount Tire shop.

PAGE 4

His consistent policy of promoting within and using incentives, such as performance bonuses and flights on his private jet for employees and their families sound like great motivators. But Bruce will also reward underperformers in certain circumstances. Why?

Demoralized people simply give up and stop trying. Halle doesn’t want good people demoralized. If people are working hard, doing pretty much everything right, and still failing to hit their targets, the reason can be an external factor outside their control. That has happened in some states with more challenging local economies, for example. Halle’s goal is to get as much as possible from his people, but he doesn’t insist on the impossible. If people are incentivized and motivated, they will deliver more to the company and to the customers. Halle is willing to reduce his margins to get that extra effort and retain good people.

Halle offered free snow tire changes to customers in cold-weather stores. How did giving something away, including replacing flat tires for free, help grow his business?

People like free stuff. They also like it when someone does hard work that they would have to do otherwise. It seems like a no-brainer, but business people don’t always work that way. (For example, consider airlines, which charge for seat changes or flight changes that cost them nothing.) Halle wanted good will, referrals and repeat business, so he was willing to give up some near-term profits in order to build a long-term revenue stream.

He aired a commercial that’s been running on TV for over 35 years having been shown hundreds of thousands of times and setting a longevity record recognized by the Guinness Book of World Records. Why has it been so popular and effective?

This is a great example of a company recognizing what it sells and what customers value. The simple message is that the company will take care of the situation if a customer is dissatisfied. It doesn’t matter what tire the customer buys or what the problem is. Discount Tire makes a blanket statement: If you are unhappy, bring it back and we will take care of it. After all these years, this ad is also a familiar friend for television viewers. You know immediately what it is and who the advertiser is, which is pretty much the Holy Grail for all kinds of ad campaigns.

Founded in 1960, Discount Tire has never had a layoff, never a year of declining sales. How did they manage that?

It’s a combination of store growth and rising sales per store. If you look at the history of the company, you see new store openings as a consistent and measured pattern. New stores create revenue and a place for new employees. It’s also important that Discount Tire is in a replacement/maintenance market. When the economy is good, people drive more and need to replace their tires more frequently. When the economy is weak, people keep their cars longer and buy replacement tires at Discount Tire rather than as part of a new-car purchase.

Why do you consider Bruce an “everyday hero?”

It’s not what you’re born with, but what you make of yourself, that defines the everyday component of everyday heroes. If he had been born into a family of corporate attorneys, attended Harvard, joined a prestigious law firm and became a great lawyer, there would be nothing surprising about that progression. But Halle didn’t get the best education, a membership in high society or any particular advantages unavailable to others. He started out like everyone else, actually with less than most people, and succeeded in spite of – not because of – his beginnings. And, on his way to the top, he remembered to give something back to the people who were making his climb possible.

PAGE 5

Prior to founding Discount Tire at age 30 he had some business setbacks. What did he do differently in order to ensure success this time around?

I don’t think he did all that much differently. He just found a place where his skill set and work ethic paid off. He did well at selling cars, but the talents that made him successful didn’t translate into insurance sales. His ability to connect one-on-one with customers was a benefit in part of his wholesaling venture, but not enough to overcome other challenges. There’s an important lesson here about finding the right match between a person’s strengths and the job that enables him or her to capitalize on those strengths.

Bruce doesn’t give a lot of advice, but if you take the lessons of his life described in the book, it would pretty much boil down to this: Be prepared to work hard, probably over a long period, to build momentum. Create a team of people that will take care of each other and work together to take care of the customer. Do whatever you can to turn a transaction into a relationship. Worry about the customer first and the spreadsheet last. And don’t forget to have fun.

Bruce once agreed to sell his Arizona home and before the agreement was put in writing he got an offer for $50,000 more from someone else but he decided to honor his oral agreement for the lower offer. How does one remain so principled in the business world?

I give this answer to anyone who will listen and it has nothing to do with Bruce Halle. There is no business world. There is just the world. And in that world, you decide that some things have value and some things don’t. One thing that people take with them wherever they go is their reputation, which can be the most valuable asset of a lifetime. Halle is very disciplined in seeking to build and protect the value of his reputation, which leads him to be very consistent in keeping his word. You make a choice in life to do what’s right or do what’s expedient. Halle has made the choice to do what’s right.

For more information, visit www.sixtiresnoplan.com and www.plannedtvarts.com.

What inspired you to share his story in Six Tires, No Plan?

There’s something intriguing about a guy who builds a billion-dollar empire, engenders intense loyalty among his workers, and yet remains absolutely unknown outside his small sphere. As I dug into his history and the evolution of his philosophy, I was similarly intrigued by the simplicity of his approach. The fundamental truths that generated his success are no secret. We all know them, but we often pay only lip service to them. Halle, though has applied these simple truths in a consistent and humble way to achieve his success. In the end, you realize that anyone could be Halle and do what he did. So the question for all of us is, why not?

Halle is an inspirational leader who has given back to his employees and the community. How does his generosity help retain loyal, productive workers?

I was talking to one of the company’s managers about Halle’s willingness to step in with a flight on the corporate jet or any other aid he provides to employees in need. I asked if she ever needed that kind of help and she answered, “No, but it makes me feel comfortable to know it would be there if I needed it.” People know Halle is loyal to them, but he also insists that they be similarly loyal to each other. When people in the regions or stores get together to raise funds for a local cause or to aid a fellow employee, their loyalty to each other and the company grows –even if Halle is not involved directly.

His first tire store was in Michigan, home to the automobile industry and where he was raised, but his significant expansion led him to Arizona and two dozen other states. How was he able to grow into an 800-store chain over 50 years by selling a commoditized product with lots of competition?

Halle doesn’t sell tires. He and his team sell themselves. That’s an important distinction. In my consulting work, I often find a disconnect between what the customer buys and what the client thinks he sells. I didn’t find that gap at Discount Tire. If consumers can go to 20 nearby stores and buy essentially the same tires in every store, there’s no competitive edge to product selection. Discount Tire offers low prices, but customer loyalty attaches to the people in the store. You have to hire the kind of people who can generate that loyalty, but it pays off quite well if you do so.

Halle introduced a few other services and products over the years but most of them didn’t succeed. He eventually decided to not get into auto repair and other logical, related areas. Why?

These areas are strongly related, and logical, if you are thinking about the auto industry. Look at it from the customer’s perspective, though, and the match is not necessarily as perfect. Customers want good selection, low prices and good service. They also want to spend as little time as possible in the waiting room while their cars are in the bays. Tie up one bay for a day with a transmission job and every other customer has an extended wait-time. Over time, Halle found that doing one thing very well would generate both customer satisfaction and corporate growth.

Halle came from a large family and no money. He grew up in a small town during the Great Depression and served in the Marine Corps. How did those early years and later boot camp help mold him into a leader?

He learned the importance of the team, whether that team was his military unit in South Korea or his extended family. As he learned that he could be the leader of a team, not just a member, he still saw leadership within the context of the larger group. It’s impossible to identify a specific moment when it all began to gel. But it’s clear that Halle knew he had to depend on others, but did not want to be dependent on them. Possibly as a result of being in a family that obtained help from others, or because he was inspired by people who owned businesses, he definitely developed a preference for being the giver, rather than the recipient.

PAGE 3

As a businessman you served as the president of the nation’s largest investor relations agency. From that perspective, tell us what you admire most about how Bruce built up and runs his company?

I’ve had the opportunity to advise C-suite executives at more than 150 large companies, including the founder/CEOs of dozens of firms. Less than a handful of these founders cultivated either the productive culture or the long-term success that Halle achieved – and I can’t think of any who achieved both. Ultimately, all business is about people. Whatever the product, whatever the price, relationships and trust among people drive success – or failure. Bruce Halle has achieved a nearly impossible level of success by engaging, inspiring, rewarding and retaining good people. It’s a reminder to managers everywhere that it’s important to put away the spreadsheets and performance metrics and figure out how to motivate and inspire the people behind the numbers.

What role, do you believe, Bruce’s faith plays in how he treats others in business?

It’s very challenging to describe one’s own faith, much less that of another, but I believe his faith plays a major role in his life – including business. Bruce recognizes, first, that he is human and flawed. That knowledge drives him to be less judgmental and more patient with the failings of others. He doesn’t always succeed, of course, but he makes a more consistent effort than you see with most people. There are aspects of servant leadership in his approach, especially when it comes to caring for employees, hitting the reset button and giving credit to others. There’s no question who is in charge at Discount Tire, but Halle makes an effort to lead by example more than fiat.

Bruce talks a lot about “paying forward.” Tell us what that means.

When you receive a gift, you have two obligations. One is gratitude to the person who provided the gift. Second, and possibly more important, is the need to mirror the giver’s act by providing a benefit to someone else. There are givers and takers in the world. Halle wants employees who are givers, who recognize their own good fortune and are willing to share it. Those people are more likely than the norm to pay forward to customers and build strong relationships in the stores, or pay forward to other employees and increase the loyalty within a team. This emphasis flows in large part from Halle’s faith, but the real world business impact is measurable.

You write that Halle’s company was built around the employee and not the customer. How so?

This is a seemingly contradictory statement to make about a company with such high customer satisfaction levels, but it’s more an issue of how you get there than it is about the goal. In the beginning, Halle wasn’t thinking about compensation strategies or the psychological profile of employees. He was thinking about getting people to join his team and build the business. He tended to look for people like himself, people who were willing to work hard and smile while doing it. If he could attract and retain them, they would make it possible to expand. So the development of the right employee base and culture became the foundation for superior customer service levels.

No one gets hired as manager of a Discount Tire store, even if they managed one or more stores elsewhere. Why?

This works on many levels. First, you want managers who know the Discount Tire systems and can teach them to others. Second, you want people who can support and continue the corporate culture, so it’s productive to look among people who are part of that culture already. Possibly most important, every person in the company sees the process as fair. Nobody works five years and has some outsider jumping into line ahead of him. Getting the keys to the store is a major reward with significant financial benefits and autonomy. Halle thinks that kind of reward should only go to someone who has already made a contribution to the company by earning his stripes in a Discount Tire shop.

PAGE 4

His consistent policy of promoting within and using incentives, such as performance bonuses and flights on his private jet for employees and their families sound like great motivators. But Bruce will also reward underperformers in certain circumstances. Why?

Demoralized people simply give up and stop trying. Halle doesn’t want good people demoralized. If people are working hard, doing pretty much everything right, and still failing to hit their targets, the reason can be an external factor outside their control. That has happened in some states with more challenging local economies, for example. Halle’s goal is to get as much as possible from his people, but he doesn’t insist on the impossible. If people are incentivized and motivated, they will deliver more to the company and to the customers. Halle is willing to reduce his margins to get that extra effort and retain good people.

Halle offered free snow tire changes to customers in cold-weather stores. How did giving something away, including replacing flat tires for free, help grow his business?

People like free stuff. They also like it when someone does hard work that they would have to do otherwise. It seems like a no-brainer, but business people don’t always work that way. (For example, consider airlines, which charge for seat changes or flight changes that cost them nothing.) Halle wanted good will, referrals and repeat business, so he was willing to give up some near-term profits in order to build a long-term revenue stream.

He aired a commercial that’s been running on TV for over 35 years having been shown hundreds of thousands of times and setting a longevity record recognized by the Guinness Book of World Records. Why has it been so popular and effective?

This is a great example of a company recognizing what it sells and what customers value. The simple message is that the company will take care of the situation if a customer is dissatisfied. It doesn’t matter what tire the customer buys or what the problem is. Discount Tire makes a blanket statement: If you are unhappy, bring it back and we will take care of it. After all these years, this ad is also a familiar friend for television viewers. You know immediately what it is and who the advertiser is, which is pretty much the Holy Grail for all kinds of ad campaigns.

Founded in 1960, Discount Tire has never had a layoff, never a year of declining sales. How did they manage that?

It’s a combination of store growth and rising sales per store. If you look at the history of the company, you see new store openings as a consistent and measured pattern. New stores create revenue and a place for new employees. It’s also important that Discount Tire is in a replacement/maintenance market. When the economy is good, people drive more and need to replace their tires more frequently. When the economy is weak, people keep their cars longer and buy replacement tires at Discount Tire rather than as part of a new-car purchase.

Why do you consider Bruce an “everyday hero?”

It’s not what you’re born with, but what you make of yourself, that defines the everyday component of everyday heroes. If he had been born into a family of corporate attorneys, attended Harvard, joined a prestigious law firm and became a great lawyer, there would be nothing surprising about that progression. But Halle didn’t get the best education, a membership in high society or any particular advantages unavailable to others. He started out like everyone else, actually with less than most people, and succeeded in spite of – not because of – his beginnings. And, on his way to the top, he remembered to give something back to the people who were making his climb possible.

PAGE 5

Prior to founding Discount Tire at age 30 he had some business setbacks. What did he do differently in order to ensure success this time around?

I don’t think he did all that much differently. He just found a place where his skill set and work ethic paid off. He did well at selling cars, but the talents that made him successful didn’t translate into insurance sales. His ability to connect one-on-one with customers was a benefit in part of his wholesaling venture, but not enough to overcome other challenges. There’s an important lesson here about finding the right match between a person’s strengths and the job that enables him or her to capitalize on those strengths.

Bruce doesn’t give a lot of advice, but if you take the lessons of his life described in the book, it would pretty much boil down to this: Be prepared to work hard, probably over a long period, to build momentum. Create a team of people that will take care of each other and work together to take care of the customer. Do whatever you can to turn a transaction into a relationship. Worry about the customer first and the spreadsheet last. And don’t forget to have fun.

Bruce once agreed to sell his Arizona home and before the agreement was put in writing he got an offer for $50,000 more from someone else but he decided to honor his oral agreement for the lower offer. How does one remain so principled in the business world?

I give this answer to anyone who will listen and it has nothing to do with Bruce Halle. There is no business world. There is just the world. And in that world, you decide that some things have value and some things don’t. One thing that people take with them wherever they go is their reputation, which can be the most valuable asset of a lifetime. Halle is very disciplined in seeking to build and protect the value of his reputation, which leads him to be very consistent in keeping his word. You make a choice in life to do what’s right or do what’s expedient. Halle has made the choice to do what’s right.

For more information, visit www.sixtiresnoplan.com and www.plannedtvarts.com.