On March 2005, Ernst & Young alum Bill Rhodes received an unexpected phone call that rocked his world. The call was from Pitt Hyde, founder and then non-Executive Chairman of the Board of AutoZone, Inc. Hyde was calling to say that, due to the surprise resignation of the company’s CEO the previous Friday, the AutoZone board had met over the weekend and appointed Rhodes as the company’s new top exec.
The call came not only as a shocker to Rhodes, who was serving as AutoZone’s Executive Vice President of Store Operations and Commercial at the time, but at age 39, it made him the youngest CEO of a Fortune 500 company.
Rhodes remembers being “scared to death” about his sudden promotion. He also recalls not having much say in the matter. “I was not asked, by any stretch of the imagination — I was told, ‘Here’s what your job is, now go to work.’”
But five years later, things seem to have worked out just fine. Today, Rhodes oversees the nation’s leading retailer and a leading distributor of automotive replacement parts and accessories with more than 4,600 stores in the US, Puerto Rico and Mexico.
Rhodes’ road to success
While Rhodes reached the CEO slot in record time, it certainly wasn’t a straight path. At one point, it looked like things were heading in the wrong direction.
Rhodes started as an intern in the Ernst & Young Memphis office in 1988. Six years later, he was asked by AutoZone, his lone retail client, to join them as manager of inventory accounting.
“It was a hard decision to leave,” he says, “but the opportunity for a Memphis native to work for such an icon in the Memphis business community, well, it was hard to pass up.”
Over the next few years, Rhodes held a variety of increasingly responsible roles at AutoZone. After managing the inventory accounting function and forming a process improvement group, he moved into store operations (while also assisting with the purchase of four new companies). He later returned to finance, where he was promoted to Senior Vice President.
Congratulations, you’ve been demoted
In 2000, AutoZone was preparing for the succession of its CFO. But feeling Rhodes just wasn’t ready for that role, the company instead made him a divisional vice president — which, on paper, was a demotion.
“But it turned out to be the best demotion you could ask for,” notes Rhodes. “I was suddenly leading 500 stores and some 8,000 people in 11 states — it was an incredible learning experience that changed the course of my career.”
Within a year, he was promoted to Senior Vice President of Supply Chain, followed three years later by his appointment to the newly created position of Executive Vice President of Store Operations and Commercial. Then, in 2005, came the phone call from Pitt Hyde.
A culture of respect: hands-on cultivation
Sitting with Rhodes in a conference room overlooking the Mississippi River, you can practically feel his passion not just for AutoZone, but for the culture of AutoZone. “We have a phenomenal, unique culture that’s based on solving people’s problems,” he says.
Respect plays a huge role in AutoZone’s culture says alum and CEO Bill Rhodes. That translates into an “upside-down hierarchy” where the focus is on the 60,000 AutoZoners who are closest to the customer.
Rhodes points out that AutoZone doesn’t have a mission statement, but rather a pledge — something that’s recited at the start of every store meeting as well as every board meeting — that starts by putting customers first.
Respect, says Rhodes, plays a huge role in that culture. At AutoZone, that translates into an “upside-down hierarchy,” where the focus is on the 60,000 AutoZoners who are closest to the customer.
Rhodes gives an example: “We’re not sitting at corporate headquarters — we’re at our store support center; I’m dressed just like every AutoZoner in our stores is dressed because we’re one team.”
One of Rhodes’ favorite things to do is to visit stores and help work the counter or unload a truck. “I learned early in my Ernst & Young days that you can sit in a conference room and hear about how something’s supposed to work, or you can go down to the floor and see how it really works,” he notes.
Working side by side with the AutoZoners in the stores lets Rhodes not only better understand the challenges they face, it also helps him think about what resources, training or products would make them more successful. For Rhodes, that’s cultivating a culture of respect.
Really rollin’ now
It’s a lesser-known economic maxim: when times get tough, the tough tend to fix (rather than replace) their cars. And that’s good for AutoZone.
Even during the recent economic downturn, the company has seen remarkable earnings-per-share growth and continues to enjoy a top return on invested capital. Rhodes calls AutoZone’s business model and culture “one of the best.”
When not busy leading AutoZone, Rhodes enjoys spending as much time as possible with his wife of 17 years, Amy, and their two children. For more than a decade, he’s served as Treasurer of the Memphis-based National Civil Rights Museum.
“Talk about teaching you about respect,” he remarks. An All-American golfer while in college, Rhodes also serves as Vice Chair of Youth Programs Inc., an arm of the Professional Golfers Association that raises money for St. Jude Children’s Research Hospital, and currently serves as Chairman of the Retail Industry Leaders Association and Memphis Tomorrow.
Rhodes is particularly proud to call himself an Ernst & Young alum. He remains in close contact with his long-time mentor and friend, Memphis Office Managing Partner Bill Drummond. “I loved the people I worked with at Ernst & Young,” Rhodes reminisces, “and I loved the opportunity the firm afforded me.”