Other Board Service
Social Justice Committee, Church of St. Patrick, Edina 2007-2012
Browar Namyslow brewery, Poland 2005-present
St. Mary’s University, Winona 1990-2000
Like many directors, Michael Dolan believes that hiring a new CEO is one of the most important and most difficult decisions a board can face. The challenge and the difficulty are doubled when a hire doesn’t work out.
A business consultant who spent 25 years at KPMG and struck out on his own in 2001, Dolan knows this only too well. In January, he and his board colleagues at Winona-based hardware distributor Fastenal Co. appointed president Leland Hein to take over as CEO from Will Oberton, who had held the position since 2002. Then in July, the company’s board reinstalled Oberton as interim CEO; Hein was named the company’s COO.
While Dolan says that Fastenal has a strong interview process, he also notes it can be hard to truly assess a potential CEO. Sometimes even a highly talented executive isn’t quite the right fit for the top job.
“Does he or she fully have the skills to take us to the next level? That’s the tough piece of this exercise,” he says. “Some would go to outsiders and have them do all the work. But we know more than they do about the company. It’s still the board’s decision, and we choose to do it ourselves.”
Dolan and his board colleagues are now back at square one, looking for a new CEO. As always, it starts with due diligence. When Oberton’s predecessor as CEO, Fastenal co-founder Robert Kierlin, decided to retire in 2002, Dolan and the independent directors sat down with him and other executives to get their perspective on the succession. (Kierlin had asked Dolan to join the Fastenal board in 2000.) That’s typical of Dolan, says Dan Florness, Fastenal’s executive vice president and CFO. Dolan isn’t one to just accept information passively, Florness adds; he connects with key leaders to gather information and opinions. Dolan also regularly tours Fastenal facilities and store locations worldwide.
“From day one, Mike has been a very engaged board member and he truly wants to understand things,” Florness says. “He’s always very diligent and thorough in how he approaches being director, and he really cares about the business.”
Dolan’s connection with Fastenal began during his tenure at KPMG. As a partner at the financial consulting firm, he provided taxation and audit services to distribution, transportation and manufacturing companies, including Fastenal. Dolan advised the company when it went public in 1987. He left KPMG in 1995 and became COO of Smead, the Hastings-based manufacturer of paper filing supplies, where he worked until 2001.
Finding a CEO isn’t the only challenge Dolan handles on the Fastenal board. He’s also chair of the audit committee, which monitors the company’s management of business risk, particularly on product quality and cybersecurity. Since 95 percent of the products Fastenal sells are manufactured by third parties, Fastenal needs to ensure that these products don’t cause, say, an oil spill or a medical device failure. Judicious vendor selection and ongoing quality testing are important in mitigating such risks.
“Mike has really good business common sense,” Florness says. “We can get into a discussion about our distribution center or trucking network, and he’s right there with the discussion instead of being in listening mode. He’s able to grasp what’s being discussed very quickly and ask questions and provide good feedback.”
Dolan’s service for Fastenal also led to his most distinctive board service. In 1995, Fastenal co-founder Mike Gostomski purchased a brewery in Namyslow, Poland. For about six months, from late 2004 to spring 2005, Dolan helped run the business, traveling frequently to Poland until he and Gostomski could find a permanent leader. Dolan still travels to Poland a few times a year as a Browar Namyslow board member.
“I enjoy business, and both the challenges and threats that go with any business,” Dolan says. “I subscribe to the idea that business is nothing more than good people doing good things every day. If you can get them to do that, the challenge and enjoyment I get out of business comes from some small hand I had in helping people do well.” Now he’s preparing to help Fastenal’s next CEO succeed.