YouSaid · the spoken record

Mitch Rales

lines on the record

128

first

2024-05-02

most recent

2024-05-02

sittings or episodes

1

sources

podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

1. “Said to ourselves, the type of leader we're really looking for is George Sherman. Here it is. He teased it up for us and we didn't even expect it. And to make a long story short, ninety days later, we had a deal with George. He did extensive due diligence on the business. And remember, this is when Daniher was primarily a tool company, and George was a tool guy. George gave us a great ten-year run. He was an exceptional CEO. He professionalized the business. He brought processes in. He helped us roll out the Danaher business system in meaningful ways that were really important to becoming the culture of the organization, our DNA, and like I said, 10 great years with George and a seamless CEO transition to Larry Culp as part of his exit was. Just pretty cool to see and watch and be part of.”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

2. “Fired ourselves and we hired a fellow by the name of George Sherman to become Dan Hurst's first real CEO outside of the business. He was actually an outside hire. George came to us from what was known then as Black& Decker. Today we know it is Stanley. Black& Decker George was the COO and we had dinner with him one night. We thought we were going to be talking about deintegrating their drill truck manufacturing plant in South Carolina and that he was going to give us the business if we would take over the facility. We were ready to go and we had all of our ideas. And what George said was I'm really thinking about leaving Black& Decker. I'm thinking about going to work for this organization and I know you know these guys at this organization. What do you think? And I'm kicking Steve under the table and he understands exactly why I'm kicking him because we had always.”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

3. “Well, yes, the story starts with the fact that I think Steve and I understood what we didn't know. We were not meant to be great operators. We tried. We did okay. But I think we understood that we really needed to professionalize the business. We could create long-term vision and strategy and how to properly allocate capital. We were very good at those type of things. But the details of what you need to do to run a business day to day is a heavy lift as a CEO of publicly traded company really requires you to be in 24-7, 365 days a year. And we're prepared to commit the time and the energy, but the details were something that really needed to be paid attention to. And so we like to say in 1990,”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

4. “As well, so there's good and there's difficult that come with situations like this. And I saw it in his life till the day he passed at 89 years old.”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

5. “I think he came away with both. I think the sense of accomplishment was my dad used to tell a story where he'd sneak out at orphanage at night and he'd buy a pie for a nickel back in the 30s during the Depression area time. And then he'd come back into the orphanage and he'd slice it into eight pieces and he'd sell each piece for a penny. So he made three cents on a five cent purchase. He said, now Mitch, that's pretty good margin. The hustle and the entrepreneurial spirit on the other side of the equation, I think he always dealt in his life with a sense of abandonment because he was put into an orphanage, not because of anything other than his father was incapable of taking care of the children. But that left a lasting imprint on his life.”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

6. “And manage things. People draw conclusions from the same facts that are presented to different people that are opposite ends of the spectrum. It's kind of amazing to see how people look at facts so differently. But they do. And so you need to be prepared for that. Just when you think and say, there's no way somebody could come to this conclusion, yet they do. You just need to be prepared to deal with things like that. So he's probably the one who's had the biggest influence on my life.”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

7. “And he understood the psychology of what it was like to be out there on the street competing every day without a formal education and how to get things done. And I watched him with bankers over the years and how he maneuvered bankers and convincing them to give him loans when he didn't really deserve to get loans and how he just managed people and how he sold and his nights at home were spent on the phone calling people and we just were in the general vicinity of where he was making his calls. So we heard all the different things that went on. So I like to think the apple doesn't far too far from the tree and he taught me the street smarts. And, you know, one of the stories that I never forget that he told was if you're in a poker game and after three hands, you haven't figured out who the sucker is, you're it. It's really true in life just teaches you the different ways that people think.”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Business to the employees because one of his themes is want to be a champion of the underdog. So the truck drivers got equity in the business as a result of this ESOP. And the business still exists to this day. I think when he sold it, it was about a $10 or $12 million business. He sold it to the employees. And by the way, they couldn't pay for it, so he took a note back for 100%. So they paid him out over time for the business. And today Midsouth building supplies still exists. And I'm told it's a $150 million business, and the truck driver's a millionaires. So how great is that? That's my dad.”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

9. “That side of the equation, eventually settled in Pittsburgh with my mom and created a home improvement contracting business that did very, very well, but I think he had a hard time dealing with the complexities and personalities of home improvement salesman. And he ultimately said, I would rather sell to them product than have to manage these cast of characters. He came picked up the whole family and moved us to the Washington DC area when I was 10 years old. And just decided he was going to start a wholesale building products distribution business. And he did. So here's a guy who wasn't scared to take risk, had the entrepreneurial spirit and drive. And at the same time, created a business that he ended up selling. And what we are told was the first Aesop done in America where he sold the...”

   2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

10. “My dad would have to have been a very formative experience. He was a very humble guy. He grew up in New York City. His mom passed in childbirth of his youngest sister at the time. And his dad was a fruit vendor on the streets of New York City and couldn't care for the family. And as a result, he and several of his siblings were put into an orphanage. He went into Hebrew orphan asylum when he was 11 or 12 years old, left when he was 16 years old with a toothbrush and five bucks saying, Norman, good luck, the world is all yours. And he always told the story, I believe the guy. Here's a guy and my dad who probably never finished his high school education and was a ditch digger, worked the carnival circuit, was on a boat at some point in his life working”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

11. “What do you think is going to happen with everybody else in the business? They know that that needs to be part of our culture, part of our DNA. They need to buy in and become part of this in a profound way that just is enabling. So I think the idea is you just have to get started and you have to be committed to it. And you can read a few books, you can learn a little bit about what a Toyota production system is or there's God knows a ton of information out there on what Danaher has done. But you need to get the journey started. And it's a compounding journey. Once again, you're making little decisions and little changes every single day that add up to nickels and dimes and quarters become dollars. And these things add up over the course of time to big money when you've been on it forty years and doing it over. A prolonged period of time.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

12. “Well, we have a Japanese concept known as going to Gemba. And that means going to where the action is. So let me give you something real time. We were on with our CEO at Danaher yesterday, my brother and I. He took an hour out of his date to spend with us on some important things we needed to review with him. He's in Pensacola, Florida right now at one of our largest manufacturing facilities, leading what we refer to as a President's Kaizen. And many of our presidents from around the world this week are leading Kaizen's. We have 2,000 of our associates engaged in Kaizen's around the world this week. So that's called walking the talk and making sure that you're setting an example at the highest levels of an organization. If Reiner Belair shows up in Pensacola and dedicates a week of his time to a president's”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

13. “Whether it's your call centers, whether it's things like contracts and the likes, you can continuously improve all of these things. So we were able to create a business system out of this, not just a production system. So that was at the root of what started to happen in 1985, 86. And that compounding journey over the last almost 40 years now has served us well.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

14. “Importing Edward Deming's principles back to America because he had exported them to Toyota. And when we learned what the Toyota production system was all about, it was clear that they were the best of the best at doing this compared to anybody else in the world. And we were able to adopt those principles and bring them back to America and start to integrate them into the business. And it started as Danher is the Jacobs Production System because we took it to one of our most difficult manufacturing facilities that we had that was upside down with problems and introduced it there. It went and evolved from the Jacobs production system to the Danaher production system. And over the course of time, as we learned how applicable all of these learnings were, not just to manufacturing, but to the business as a whole, whether it's accounts receivable man.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

15. “What we learned was in watching GM change a two ton die that took them six weeks to change that die over, and we watched Toyota change that same die in six hours. And we said, something is going on here that we need to understand. And what came clear was Toyota adopted the principles of a famous quality guru by the name of Edward Demi. And he had a bunch of principles, 10 or 11 different quality principles that he stood by. And he tried to sell his bill of goods to GM Ford and Chrysler at the time. They weren't buying it. And in 1959, Toyota bought in Hook Line and Sinker to these principles. So what we like to say is all we were doing was”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

16. “That was the early roots, and that would have been 1985, 1986, when we were two young guys. We had made a series of acquisitions. And we kind of looked at each other and said, we don't know much about manufacturing. We better figure out how to run these businesses. And we did divide up the world. I went to Europe, Steve went to Asia, and we split North America. And when we looked at GM, Ford, Chrysler, Toyota, Volvo over in the Scandinavian countries, we learned a ton. And we saw something amazing in Japan, or Steve saw it.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

17. “And how they created square footage for entertainment space rather than the artworks and how the sun would shine in certain glass areas that was distracting and what you could do to eliminate that type of thing. There's 101 different learnings that came out of this. And we brought all of those back with us that became part of our architectural brief and how we wanted to build this place out. And I think we've created something pretty unusual. We made some mistakes along the way. I mean, if you want to know as a, for instance, our cafes were way too loud. We didn't look at the acoustics as properly as we should have. It was an expensive fix, but we were able to take care of that. We have perforated ceilings now that you can't even really see, but that take a lot of the impact of sound out so that you can hear yourself, have a conversation.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

18. “Oh, it's a great question and one that we spent a considerable amount of time on. Not only Emily and I, but taking our architects, taking our builder at times, the people that we're going to be very active in the build out of Glenstone as a whole. We actually benchmark 50 museums around the world. And we had great access to meet the teams. And we would sit down and have a nice conversation to get started with the team before we did the tour. And the first question we would ask is, so if you had to do it all over again, what would you do differently? And the stories they told us were absolutely amazing. The learnings of what not to do was profound. And for our architects and our builders to hear these things, we got into the minutiae of things like loading docks. How would you do your loading dock differently than what you've done today?”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

19. “Can't be great quickly. Gray takes time and compounding. So this journey of thirty years to get to that point is what we're really after. And that's the BHAG that we want. We want to create something that doesn't exist anywhere else in the world.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

20. “Over the course of time as well. So there's 2,000 plus artworks in the collection now. We've made some mistakes along the way, but we correct those mistakes and we continue to up the game on the collection of art that we have as well. And the same thing has taken place in the architecture. The same thing has taken place in the care of the landscape. I mean, we want forested areas. We want pastures with flowers. We want people to be able to really wander and see lots of different things. I mean, we've planted pretty close to 20,000 trees now, some very, very large, some one inch caliper. But we pay attention to all these details in what we do and how we've gone about it. And it's been a great journey for Emily and I to share. But we also think institutions of greatness aren't once again built quickly.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

21. “By every day. I mean, we even do interviews that we call core value interviews when we're hiring associates to come to work at Glenstone to see if their values are aligned with the values of the institution itself. This helps make sure that you're hiring great people who have a shared purpose and vision that's similar to yours. It started there. And we can talk for hours about how we select an artwork, but it's very similar to the way we select a business. Do you want a business? It's a C or a B minus? Hell no. You want businesses that are A plus that are anchor tenants that are the defining type of businesses in the industries that they support? It's no different in the way we select art. We want the A plus works of the most defining artists of the time when these works were created. And that compounds on itself.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

22. “Will Emily and I have become disciples of the author Jim Collins, and he's written the book Good to Great, Built to Last, How The Mighty Fail, and the Takeaways and Learnings that we've had from Jim over the years, by the way he comes and speaks at our conference every four to five years for our businesses have just been profound. And it all starts with creating a purpose statement, a set of core values, a vision statement of what you stand for, and a BHAG, a big, hairy, audacious goal, which is what you really aspire to over a 20 to 30 year period of time. And for Emily and I, it all started about what we thought there. And we started with our purpose statement, which is art is essential to life. And we build a set of core values that we live.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

23. “That's what we want, and that's the philanthropy that we're trying to create here. It's hopefully going to be one of the revered museums around the world in its day. And it's got a long-term endowment that's been put in place to sustain it in perpetuity in a way that will keep it unique to what we're trying to do.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

24. “We think we need another fifteen plus years to really create something great. Here, we're good now, but we're not great. And greatness is is a journey that takes time. We hope that all the good decisions that we make at Glenstone in the years to come and in the years past will continue to compound on one another. So we'll talk about compounding a lot today, but Glenstone is compounding as well with the decisions we make every day and the learnings that we have and the things that we continue to do to try to up our game and create an experience for our visitors. It's just second to none.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

25. “Get out of your car, you go to our arrival hall and you check in and you then make a six, seven, eight minute walk through the landscape to get to the building, to get to the pavilions itself. So you have a chance to decompress along that walkway. You'll see some monumental sculpture along the way. The building is kind of hidden until you start to approach the last couple of minutes of the journey itself. When you actually get to the building, you're really ready to start to engage. You've left your negative thoughts about what's happening in the world, what's happening in your daily life, the hustle, the bustle that's going on, and you really do get a chance to decompress. So that's what we're about. We're on a mission. We're now 15 plus years in.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

26. “To get you started when you arrive at Glenstone, you come into our parking facilities. Each space has a tree. You're feeling the calm of nature as soon as you come in. It's not the traditional parking lot that you would see.”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

27. “That just isn't seen in the museum world anywhere else. We were aghast at many places that we visited over the years where you stand 20, 30 feet away from the picture and you're taking a picture of the picture because there's 10 or 15 people in front of you. So you never get a chance to engage with an artwork in a way that you get to at Glenstone. We actually did a study. We wanted to dedicate about 350 square feet per visitor versus what happens at a famous New York Museum on a weekend where they allocate about 20 square feet per visitor. So it gives you a feel for the sense of calm that would be here and in a way that, once again, a visitor can engage with the artwork in a great way. They could stand in front of a pretend, 20 minutes if they want. And by the way,”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source

28. “Glenstone is obviously something that's near and dear to my wife, Emily, and my heart. The two of us co-founded this place, oh, I guess in September of 2006 with the whole vision and purpose of, number one, art is essential to life and that we could create something very different that hasn't really been seen in the world today. And what do I mean by that? We're about the seamless integration of art architecture and nature. We sit on a campus of about 400 acres where people can come and experience all three of these pieces of the equation in a slow,”

    2024-05-02 · Invest Like the Best · Mitch Rales: The Art of Compounding - [Art of Investing, Forever Episode] · IDENTIFIED FROM THE TRANSCRIPT · source