01 Dec 1999
Q & A: Herb Kohl
Bucking the Trendby Susan YoungTopics:
As a boy growing up in Milwaukee, Herbert H. Kohl (MBA '58) spent afternoons and weekends restocking shelves in his immigrant parents' grocery store. It was good training for Kohl, who joined the family business after graduating from HBS and over the next 23 years helped expand Kohl's to include one hundred grocery and department stores. Kohl focused on philanthropic activities after selling the business in 1979 and purchased the NBA Milwaukee Bucks in 1985. Elected to the Senate seat vacated by William Proxmire (MBA '40) in 1988, he was reelected in 1994.
As one of the few businesspeople in the Senate, do you feel like an outsider?
My business background is certainly a big part of what I do here and how I look at things. People often say, "You just don't seem like a politician." But I'm delighted to be a businessman in public service. I think my colleagues respect my background - they see me as somebody who's a little different.
How do your business activities compare with being a senator?
In business, things have a beginning, a middle, and an end. In the Senate, there is always another chance and another time and another speech. In the Senate you don't get anything done unless you're able to work out some consensus with other people, whereas in business you don't usually need a majority in order to get things accomplished.
You spend a lot of time on children's issues. Why?
I really like young people. Here in Washington, they often get short shrift. They don't vote, and they don't contribute. My support for young people cuts across a broad spectrum - from supporting a balanced budget amendment so we won't pass our debt on to them, to things more traditionally thought of as kids' issues: Head Start, education, child care, gun control, crime, Boys and Girls Clubs. There are probably a dozen different things that I work hard on that have a direct impact on young people and the quality of their lives.
What are some of the other issues you're involved in?
I fight for consumer and business issues. I'm always ranked at the very top of the list of senators who vote to cut spending. As a businessman, I know the money you don't spend often representsyour profit. In a Wisconsin vein, I'm working to change the formula by which dairy prices are paid to farmers. We are a dairy state, and because of a law from the 1940s, our dairy farmers get paid less for their milk than those in all other states.
Was there ever any question that you would join the family grocery business?
Not really. I went to HBS to prepare for the job. Being ambitious and energetic, I assumed a responsible position almost immediately after earning my MBA. Without the foundation that I got at the School, I think I might have failed at Kohl's. I learned how to devise and implement a strategy and, most important, about the importance of working well with people.
What was your strategy in running Kohl's?
`/bulletin/bullpics/acircle.jpeg~ Kohl's is a company with thousands of people who implement strategy. In a retail business, no matter what you decide in the office, if the people out in the stores don't execute it, your business isn't going to be worth a darn, because they're the ones who deal with your customers. So hiring and motivating the right people was key - I interviewed every single person who was hired during my time at Kohl's.
How did you first get involved in politics?
In the mid-1970s then Governor Pat Lucey asked me to be state chairman of the Democratic Party. When the Senate seat opened up in 1988, many people who knew I had an interest in public affairs suggested I run. Because I'm not a truly "public" person, I held back until literally the last moment. "OK, I'll run," I finally said, and before I had a chance to change my mind, the press knew, and I was committed.
How did you finance your campaign?
Almost all of the money I spent was my own. Initially there was a question about whether that would be a detriment - people might think that I was buying the election. The local newspaper took a poll and asked, "Are you offended by Herb Kohl spending his own money to run for office?" Something like 88 percent said, "Not at all."
What's your position on campaign finance reform?
I'm very supportive of it. Money is way too important here in Washington. People who contribute the most influence legislation the most. And that's obviously contrary to our democracy.
How has your own financial situation affected you as a senator?
I am the luckiest guy here because I don't have to ask anybody for money. That allows me to do what I think is right on every vote, because I don't have anybody that I have to satisfy because they contributed a lot of money. That gives me such an advantage in trying to do what's right. I'm not saying that only rich people should run for office, but what we must do is reform the system so that virtually every elected official can have the freedom I have. That way we can all do a better job.
Describe your philanthropic activities.
Giving away money has never been hard for me. I'm not sure I could give away my last nickel, but I am in a position to contribute, and I do. The biggest gift I ever made, $25 million, was to the University of Wisconsin to build a new sports facility. It made sense because I'm a Wisconsin senator, a sports fan, and a professional team owner. It is a beautiful building, and I'm proud of it. I also have an educational foundation that gives out about $400,000 a year in scholarships and awards to teachers and students around the state.
Is it true that you have paid taxes even when you were not required to do so?
Yes. It has never bothered me to pay taxes. Several times I have had no tax liability, but I have paid nonetheless. I believe that people who have money should pay some amount in taxes. We all have an obligation to our generation and the next to give some of our money back so that we can keep this country going and improving.
Do you think Americans' tax dollars are well spent?
For the most part, yes. Look at all the things we get for our taxes: education, police, the military, environmental protection, and hundreds of other things. True, a portion of it gets wasted because in anything as big as the U.S. government, where you're spending trillions, money falls through the cracks. But for the most part, the money is spent in a legitimate way. We are always trying to do a better job, but we still have the best, most effective, most efficient government in the world.
What are your proudest accomplishments?
I'm very proud of my role at Kohl's - of being a part of an enterprise that was such a success. I'm pleased that I was able to keep the Bucks in Wisconsin. I was just overwhelmed with getting elected to office. That's pretty special. I've been here eleven years, and I feel as though I've done a good job. I've had a bunch of positive things happen to me in life. And I've been happy with all of them, so far. We'll see what tomorrow brings.
A lifetime basketball fan, Herb Kohl worked to get the Bucks to Milwaukee in 1969. Not wanting to see the NBA franchise leave his hometown when it came up for sale in 1985, he became a local hero when he bought the team. "At the time I paid the most that anybody had ever paid for an NBA team," says Kohl of the $18-million price tag. "I thought it was a stupid investment - way too much money in a small market for a basketball team."
Fourteen years later, with the Bucks' worth an estimated $100 million, Kohl has no regrets. "It's been a source of great pride and interest to me," says the humble Kohl, who initially didn't feel comfortable parking in the VIP spot reserved for him.
As president of the Bucks, Kohl makes an effort to attend as many games as he can. Noting that he spends "a goodly amount of my spare time working with the Bucks to keep them on a path of success," Kohl says, "it's a nice diversion from being a senator."