For Herb Kohler and his associates, thinking outside the box is part of the job.
By Jeanette Hurt
Herbert V. Kohler Jr. loves his job—exploring old territory, developing ideas and breaking new ground. He seems as much entrepreneur as executive. Yet Kohler, 69, heads up one of the largest privately held companies in the world, with 49 plants around the world.
As the chairman, CEO and president of Kohler Co., he is in charge of more than 35,000 employees worldwide in four different, but related, business spheres: the Kitchen & Bath Group, Global Power Group, Interiors Group and the Hospitality & Real Estate Group. “I’ve been an explorer all my life—in cultures, the arts and the leading edge of business,” Kohler says. “For me, every day is exciting because we’re always trying to break new ground.”
Exploration, coupled with persistence, he says, is key to both his company’s and his own personal success. A good example of these principles can be found in a trip he took to the North Pole, when he was “just a young man.” The trip, sponsored by the Canadian government and the Admiral Byrd Polar Society of Boston, brought business leaders to the high Arctic to ask them for their advice in assisting the Eskimo population regain some independence after years of government assistance. “Traditionally, the Eskimo was considered the world’s most independent people, relying totally on what they could find within their environment,” Kohler says.
But after it was discovered how desperate their lives were if they missed the migration of caribou, there was an outpouring of government support. While visiting, the executives came upon several instances where the new dependence on the government caused wasteful behavior. “I went fishing with an Eskimo. The char were migrating, so this Eskimo set up a stone wall, and then set up another one upstream so the fish would be trapped. Using his gaff hook, this Eskimo was able to catch about 200 char in 30 minutes,” Kohler says. “This was traditional as a means for supplying food for his family and his dogs. Then, he staked and cooked one in a coffee can with a Bunsen burner, and we shared it for lunch. We didn’t take one fish with us back to the settlement.”
The first suggestion was to bring in freezers because the Eskimos didn’t have a way to store their catch. The permafrost was six inches below the surface and too hard to penetrate, so they couldn’t dig down for storage; it was also suggested the government fly in a plane every other week to take the fish to southern Canada. Another suggestion was for the government to assist the Eskimos in building resorts and fur farms. “The process of exploration and discovery is when no one has an answer to a problem, and you’re out there, working with people to solve it,” Kohler says. “It taught me persistence—that if you have developed what seems to be a sound idea and executed it well, more often than not, it will work out.”
That wasn’t the last of Kohler’s expeditions. In 1979, he wanted to turn the old American Club in Kohler, Wis., into a village inn. The club was constructed in 1918 as a dormitory for European immigrants who came to work for Kohler, but by the ’70s, it had outlived that purpose. “It was less and less appealing for people to live there,” Kohler says. “Mobile homes were a better answer for inexpensive housing.”
The more obvious option for the American Club was to convert it into offices or green space. “I was the eccentric to suggest a village inn, especially because it was to be a high-end service business across from an iron foundry. A few associates and myself developed the idea and then I took it to the board, of which I was chair.
They rejected my idea twice. I was persistent, I went back a third time, and finally they just sort of looked at each other. I think they were thinking, ‘Three million will not break this company, and this kid is determined to do it.’”
The inn started out with 125 rooms. It has since been expanded five times and, just a few years after it first opened, became the only AAA five-diamond hotel in the Midwest. Did Kohler imagine this kind of success when he first pushed his board to open the inn? “No, not by a long shot,” Kohler says. “I’m not a visionary. If I were, I don’t think we could have done half the things we’ve done. A visionary is determined to go from point A to point B, and he or she has a very distinct image of B. I have a mission, I like to build one success on another and let them suggest a direction. We had just successfully opened the Sports Core, a fitness center, and the River Wildlife, a private club; those successes gave me the confidence to pursue a village inn. The inn, once successful, in turn suggested golf when we knew nothing of golf. Today, we have three of the top 100 courses in the United States.”
Kohler discloses that the 132-year-old company now has more than $5 billion in annual sales and has grown its book value at an average compound growth rate of 11.4 percent per year over the last 35 years. Recently, the company set up a joint venture to produce four-cycle engines in China and purchased a diesel engine company in Italy, both of which will allow them to produce a cleaner, quieter diesel engine. The company’s Kitchen & Bath Group also has new spa bath and shower products in the pipeline. “You can do things with water and electronics that you couldn’t even think about five years ago,” Kohler says. “You can create amazing experiences with water, light and sound.”
And Kohler continues to open new businesses—a favorite being the Craverie, a concept café with an “Indulge” menu and a “Lean” menu, as well as the company’s own chocolates, in Kohler, Wis. Like everything else, what started as a risk is taking off. Forever an explorer, this business icon allows himself to be inspired by the opportunities around him.
Kohler’s Favorite Things
Nature, sports and arts are high on the list of Herbert V. Kohler Jr.’s favorite things to do in and around Milwaukee. Here are some of his sure bets for making your visit a perfect one.
Lake Michigan (www.great-lakes.net) and the Whistling Straits Golf Course (www.destinationkohler.com) in Kohler, Wis.
Sheboygan River (www.sheboyganrivers.org) wildlife and the Blackwolf Run Golf Courses (www.destinationkohler.com) in Kohler, Wis.
John Michael Kohler Arts Center (www.jmkac.org) in Sheboygan, Wis.
Kohler Design Center (www.us.kohler.com) in Kohler, Wis.
Milwaukee’s Bradley Center (www.bradleycenter.com) for a Bucks or Marquette basketball game
Milwaukee Art Museum (www.mam.org) with its Santiago Calatrava-designed Quadracci Pavilion
Kettle Moraine Scenic Drive (www.dnr.wi.gov) with the Wade House (stateparks.com)
Discovery World (www.discoveryworld.org) in Milwaukee
A show in the Kohler Foundation’s (www.kohlerfoundation.org) Distinguished Guest Series in Kohler, Wis.
