A Golf Fanatic
Herb Kohler has turned his passion for golf into a major business from Wisconsin to St Andrews
From the Print Edition:
Ernie Els, November/December 2012
(continued from page 4)
“Take that, Herb Kohler!” Hosseini shouts.
Kohler gives him a look, then starts to laugh that deep throaty laugh of his. The onlookers gathered at the fence behind the green—the continual gallery at the home of golf—applaud vigorously and Hosseini acknowledges them.
In that little tableau, there is much to be said about Herb V. Kohler, his passion for golf, his passion for life and even his business. What could be better than playing the game in St Andrews, playing with good friends and surrounding yourself with successful aspects of your business enterprise?
“He’s a very interesting, successful, creative and complicated guy,” says M.G. Orender, part of that day’s foursome, a close friend and a former president of the PGA of America. “He can have a somewhat gruff way about him, but he has a huge heart.
In the short time he’s been involved in golf, he’s had a huge impact, not just putting on major championships, but serving on boards and donating time and money. He’s made some substantial financial contributions. He’s been involved in amateur golf, pro golf, the superintendents, First Tee, environmental stuff. He does it quietly. He does it for the love of the game.” It was a love that was a longtime coming, a love that, like the rest of his life, he embraces fully. For Kohler, there is no other way to live.
As chairman of the Kohler Company, the family business established by his grandfather in 1873, Kohler has built a multi-billion-dollar enterprise beyond the plumbing products that established the business. Kohler is into kitchens, furniture, small engines and generators, stone and tile. Kohler products are produced on four continents and have found their way into millions of American homes and businesses, and the Kohler name might be the first one you encounter each morning.
Then, there is golf. The Kohler Company owns the Blackwolf Run and Whistling Straits complexes in the Kohler, Wisconsin area, a family town established by his grandfather.
When Kohler got a chance to get a foothold in St Andrews, Scotland, a place he dearly loves, he bought the Old Course Hotel, just outside the ropes of the 17th hole of the Old Course, in 2004. That property includes the Dukes Course just outside of town. Then he took over a failing condominium project at Hamilton Hall, now called Hamilton Grand, the red-stone building right across Golf Place from the 18th green of the Old Course. “They are both iconic,” says Kohler, who is a member of the R&A. “There are no two locations in golf that are comparable.”
It is through golf that Kohler expanded his vast personal vista. “I discovered the integrity of the game, the physical aspects of it, the mental aspects,” Kohler says, tucking into his eggs and bacon in a private room of his Old Course Hotel. “I needed something to wrench me out of my work, and golf turned out to be it. There were also high values to it, something that is at the core of our company. There is self discipline required, integrity required. Getting involved has led to some of my best friendships I have today.”
For decades golf was a big part of the American corporate milieu, but not for Herb Kohler. His focus was on expanding the Kohler brand, in making it a household name for something other than commodes, and entering into related businesses. All this would be done with a creative flair, creativity being at the forefront of Kohler’s business and personal philosophies. He had this idea about turning the old employee dormitory, the building that housed artisans his grandfather had brought over from Europe, into a luxury hotel, the American Club. It was a decision that had direct bearing into Herb Kohler’s foray into golf.
“My whole golf experience took place without any vision at all,” says Kohler. “I had an old bag that was my father’s with some wooden shafted clubs and I might play a couple of times a year. It was the hotel, the American Club that got me into it. I had a vision for the American Club as a high-quality resort and, of course ,we could show off our products there. But it was the guests who questioned why there wasn’t a high-quality golf course to go with it. We opened the hotel in 1981.
“We had a vice president of business development who was a 3 handicapper and he was my guiding light. Once I got involved in building a course, I figured I had better find out what the game was about.”
After a characteristically thorough screening process, Kohler chose Pete Dye as his golf course architect to build the Blackwolf Run project. Dye’s knowledge of the game impressed Kohler, as did his views on the aesthetics of a golf course. Kohler,
after careful consideration, was never afraid to take a chance and gave Dye as much of a free reign as he was ever likely to give anyone. Dye’s courses are challenging, and Jeff Cheney thinks he knows why that appealed to Kohler. Cheney, the Kohler Company’s CFO and a 3 handicap, is one of Kohler’s frequent playing partners.
“When it comes to his golf courses, [Herb] says that people like to ride a roller coaster, ride something that scares them a bit,” says Cheney. “These courses aren’t easy, but they are playable for most people, and memorable, which is what Herb wants.”
“Dad and Herb are renaissance men with a fantastic eye for design detail,” says Perry Dye, Pete’s eldest son and a designer himself. “They’ve had their run-ins over things, of course, but they always come to an agreement on what’s the best thing for a course or a tournament course. They are great friends who are only separated by a couple of billion dollars.”
Dye went on to design four courses for Kohler, who from the outset wanted them to host major championships. “If we were getting involved, we had to get involved in a big way,” says Kohler. “It’s the way we do things.”
Blackwolf Run has been the site of two U.S. Women’s Opens and two PGA Tour events. Whistling Straits has hosted two PGA Championships and a U.S. Senior Open. The Straits course will host the 2015 PGA and the 2020 Ryder Cup matches. He is particularly proud of the fact that Old Course Hotel was the host hotel of the 2010 British Open, and a month later his American Club was the host hotel of the PGA Championship.
“We have the ability to manage hotels and events to the highest standard. The highest standard,” Kohler says with emphasis. “And when we do that within the brightest spotlight on that championship, which in turn that shines the spotlight on all our businesses directly and indirectly. When we put our brand out front like that, it has a significant impact over time, without question.”
For someone who rebelled as a youth, who was intent at one point not to have anything to do with his family company, the long journey to the chairman’s office preceded the smallest seed of interest in the game. He virtually never played and only did so with his father’s wooden-shafted clubs. He attended the toney Choate private school in Wallingford, Connecticut, then went to Yale where he was rather unsure of what he wanted from an Ivy League education.
“At the end of my freshman year the dean of my class called me in and said your grades are good but I don’t see a sense of purpose,” Kohler says. “I said ‘Yeah, I don’t either.’ He said ‘If I you want to take some time off, fulfill your military obligation and find something you are passionate about, you could do that and your grades are good enough that you could get back in.’
“So I did a six-month stint in the Army at Fort Leonard Wood and Fort Chaffee. Then I went to Switzerland and lived with a family and studied math and physics in high German. All the lectures and the textbooks were in German. It was a struggle, but I got through it.”
When he returned to the states he decided he might like to be an actor so he went to Knox College in Galesburg, Illinois to major in theater.
“I became a poet, I edited a wild political newspaper on campus,” he says. “I was a pre-hippie, at the forefront of the hippie movement.”
At Knox College, he auditioned for a play and ended up with more than a role. “The upshot of my theatrical career is that I ran off with the director and married her six months later,” Kohler says, chuckling.
That would be his first wife Linda, with whom he would have four children. Once married, he decided that poetry, political newspaper editing and acting weren’t going to pay the bills. He had to rethink what he had said to his father.
“I had told my father I would never take another penny of his money, the company money,” says Kohler. “Then I thought I had a wife now, I had better get my act together, so I went back to Yale and got a degree in business administration.”
That still didn’t bring him back to Kohler, not immediately.
“I was working somewhere else when my father called and asked me to come back to work at the company,” he says. “I said, ‘Are you kidding? I didn’t spend the last three years of my life preparing to work for you.’ But I thought about it, particularly the potential I thought the company had. So three days later I called him and said I’ll come back, but under no circumstances are you to have anything to do with my career. I want to go through all the normal channels, be subject to the same scrutiny that anyone would get. And he promised he would stay out of the way.”
So the scion of Herbert Kohler Sr., who had done laboring jobs in the company as a teenager, returned to Kohler and worked as research and development technician, a schedule coordinator, a warehouse supervisor. “Others had the responsibility for promoting me,” he says.
Two years later his father died. After discussions with company executives, he became vice president of operations. Two years later he became executive vice president. In 1972 he became chairman and CEO.
It wouldn’t be until after he opened the first of his golf courses in 1988 that Kohler was bitten by the golf bug. In doing so, he also got bitten by the betting bug, playing for small stakes but negotiating like he was buying another business.
He recently retired after winning the Gnarly Balls title for an eighth time, a contest between other Kohler Company employees and local residents. The Gnarly Balls isn’t about scores, it’s about the money you win from betting. And the prize is a pair of rusted casting balls from a Kohler foundry connected by a rusting chain attached to a piece of Lake Michigan driftwood. The competition is so named because it takes place at the beginning and end of the Wisconsin golf season, in the gnarliest weather. Herb Kohler likes a challenge, and blustery winds, snow, sleet and the occasionally frozen fairway.
Kohler will say that his betting scheme is pretty simple. “I usually play a $10 Nassau, $2 skins and Honest John,” says Kohler, obscuring all the haggling over strokes given and received. It’s often the only topic at breakfast.
“I keep track of all the rounds and all the bets over time,” says Cheney. “He’s won a net $5,226 since this has all started. I’ve won $5,108. We play for a lot more playing gin on the plane traveling to play golf than we do in the actual golf.”
“Herb is a keen, voracious negotiator of a bet,” says Orender. “Negotiating a bet with myself and Mori, it’s really a battle. He’d rather beat Mori for 10 bucks than buy another company. When they first met, Herb was probably a solid 15 handicap and Mori was in the high 20s. Now because Herb is dealing with some health issues [sore hip and foot], Mori is giving him shots. They will go through this big argument deciding on strokes before the round, and they keep arguing about it for half the round. If Mori got two dollars off of Herb, it would make him happy. They will spend 25 grand to take a private plane somewhere to play golf for five bucks.”
For Hosseini, a very successful Florida developer who is president of ICI Homes, the relationship with Kohler is about two good buddies having a blast, whether it’s on the private jet or at a street kiosk. “His humility, down-to-earth, one-of-the-guys type attitude is what attracted me to him,” says Hosseini. “That made us become good friends . . . We are happy to get a hot dog on the street, or eat in the finest French restaurant in the country. As long as we have a good time, that’s what it’s all about.”
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