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Dec 5, 2022 2022-12 Accountancy Alumni Business Administration Faculty Finance Student

CDW’s Krasny shares entrepreneurial approach with Larry Gies

A conversation between Michael Krasny (FIN, 75) and Larry Gies (ACCY, 88), two of the College’s most celebrated entrepreneurs, was the centerpiece of this fall’s V. Dale Cozad Lecture on Entrepreneurship, an annual lecture series hosted by Origin Ventures Academy for Entrepreneurial Leadership. 

Krasny is the founder and retired chairman and CEO of CDW, which grew to be a Fortune 500 company and the nation's largest direct marketer of multi-brand computer products for business. He sold the company in October 2007.

He shared his inspiring and sometimes improbable journey with fellow entrepreneur Larry Gies, founder and CEO of Chicago-based Madison Industries, one of the largest and most successful privately held companies in the world. Five years ago, he and his wife Beth donated a $150 million naming gift to Gies College of Business.

Gies: What were your goals and vision for your life when you graduated in 1975?

Krasny: I was not a particularly good student in high school and quite frankly, I didn't even want to go to college. I ended up going to a junior college my first two years and applied to University of Illinois because a bunch of my friends went here. I applied and I didn't get in. But the next time I visited them, I stopped by the admissions office ask them why I was turned down. I met with someone older than I am now and somehow talked my way in.

Gies: What happened next?

Krasny: I went to work for my dad who was a Toyota automobile dealer, back when no one knew what that brand was. I had started playing with computers in the 1960s and tried to automate things at the dealership, but he wasn’t receptive, so eventually I left.

Gies: What kind of process got you to turn your passion for computers into a full-time job?

Krasny: I took a three-day dBase programming class for $19.95 and the book that went with it –for an extra $8—was like reading a best seller. I read it from cover to cover and absolutely fell in love with it. Then I applied for a job creating a scheduling program for doctors. He never made a sale, so I put an ad in the Chicago Tribune to sell the computer I’d bought for the project. It sold quickly, someone else called and asked for the same thing, then the first person called back and asked me to make more. I made more money selling these computers in three days than I had made working for three months. I started buying parts wholesale from a Chicago company PC Network and eventually they asked me to build computers for $20 that they sold for $400. I decided I could do the same thing.

Gies: Was this the beginnings of CDW?

Krasny: I placed an ad in PC World magazine for Computer Discount Warehouse in December 1985, and the phone started ringing off the hook. I decided then that I was in this for the long haul and that we would offer the ultimate best service. That didn’t always happen in the beginning, but we worked our way through it.

Gies: What was the day you said to yourself there’s definitely a demand and I’m going to build a business out of it?

Krasny: I don’t think, until the day I sold it, I really felt comfortable. Even when we reached the Fortune 500 and employed 8,000 people. You know, we were Fortune best company to work for every metrics that you could think. That was a good metrics. I still walked to work every day, paranoid of failure.

Gies: You built a $30B market cap company with 15,000 employees, one of the largest companies in the U.S., considered one of the best places to work in America. A lot of people would say that was success.

Krasny: I cared more about my coworkers than I did about my customers. And I cared more about my coworkers than I cared about our profitability. Profitability is only a byproduct of executing a business on all cylinders. I realized that if I wanted to build a company, I needed really good people, and if I wanted to have the best people, I had to create an environment that was attractive to everyone.

Gies: As a leader, how did you let those front-line people know how important they are?

Krasny: I'd walk through the warehouse and chat with people. I'd ask them, “Why do we do this? Why don't we do this? And we’d constantly change things. I was trying to learn and help everyone go through it. We let everybody know how important every single position in the company is.

Gies: How do you cultivate an entrepreneurial atmosphere as a company grows?

Krasny: Enthusiasm is contagious. They catch it and pass it down. And you keep a humility within you and empathy in order to let everybody share in that enthusiasm.

Gies: Please share with everyone here how you look at that giving. Why do you do it and why you do it so differently than so many other people?

Krasny: Three reasons: I looked up to Julius Rosenwald who took over Sears in the 1920s and built it into the massive empire. His philosophy was anonymous giving. I happen to be Jewish and there's this term “tikkun olam” that means giving and asking for nothing in return. That, to me, is true giving. And I don't want to be any different than my friends.