Copyright Star Tribune
Dan Florness is known for being frank, and also for facing problems before they show up in results. By Patrick Kennedy The Minnesota Star Tribune November 8, 2025 at 12:00PM In 2022, Fastenal reported strong results, but CEO Dan Florness felt something was misaligned. So the company made adjustments in its structure, and so far it has not faced the financial troubles some other manufacturers have. (Leila Navidi/The Minnesota Star Tribune) Fastenal’s revenue in 2022 was growing at 16%. Most CEOs would be satisfied, especially after the pandemic, but something didn’t feel right to Dan Florness. Florness said in a recent interview he felt there were too many competing voices amid the chaos of the pandemic, supply chain disruptions and increasing interest rates. “There were a few things that popped out that didn’t feel Fastenal-like,” Florness said. The organization seemed misaligned. And that, he said, could lead to issues he wanted to identify before they became problems. Florness knows Fastenal inside and out. An accountant by training, he joined the Winona-based industrial supplier in 1996 as chief financial officer before becoming CEO in 2016. He tries to live by a code that his predecessor Bob Kierlin, who died in February, taught him. He strives to treat everyone as an equal, lead with empathy and stay out of the spotlight. Florness, who understands all the analytics and budget lines, also tries to be honest, whether it’s about finances or a gut feeling, and also feels a loyalty and civic responsibility to southeast Minnesota. Jeff Watts led a restructuring in 2022, since moving up from chief sales officer to president of Fastenal. He is considered heir apparent to current CEO Dan Florness. (Leila Navidi/The Minnesota Star Tribune) The 2022 conundrum Florness’ feeling that something was amiss in 2022 came amid chaos created by supply chain disruptions and inflation. It also came after a big investment, as the company expanded into a new office building in Winona. On paper, things seemed right. He asked another long-time Fastenal employee, Jeff Watts, to address the problem, promoting him to chief sales officer and giving him latitude to make structural changes and move people around as needed. Related Coverage Watts looked at every department and process, from sales and IT to the supply chain, and made changes that has them all working toward common goals. “We’re more aligned now than we’ve probably ever been as an organization,” Watts said. For example, while the shift to vending machines worked for large companies, there wasn’t anything in place to stop the flow of small accounts leaving Fastenal. Now, the model is realigned to better serve all customers, from its distribution centers to its trucking fleet and e-commerce platform. As it solidified the changes, Fastenal continued to shift away from being a distributor to being a customers’ supply chain partner, the officials said. Fastenal works with suppliers and customers on quality control. “We were started by a mechanical engineer, and that quality aspect of our product is embedded deep in our DNA,” Florness said. A Fastenal machine on display at the headquarters in Winona. (Leila Navidi/The Minnesota Star Tribune) The shift to on-site and vending options have allowed Fastenal to gradually reduce the number of physical stores, reducing costs. And as Fastenal adds more connected devices, it has even more data to help keep its customers supplied and to manage their inventory. Meanwhile, revenue has grown from $3.9 billion to $7.5 billion, and in 2021 it became a Fortune 500 company. Profits more than doubled during his tenure, finishing 2024 with $1.15 billion in net income, or $1 a share. “We think pivoting the business model to prioritizing national account customers that value innovative supply chain solutions has led to accelerating share gains,” Merkel said. Becoming more of a supply chain partner than a retail vendor further accelerated growth, Florness said. Revenue and earnings both increased 12% in the company’s third quarter, despite a slowdown in the core manufacturing and construction markets. Sales were $2.1 billion in the third quarter. On the earnings call, Watts noted it was the second straight $2 billion sales quarter. “This demonstrates the effectiveness of our plan and Fastenal’s growing partnership with our customers,” Watts said. While some Fortune 500 companies are priding themselves on a high share price, Winona-based Fastenal still does regular stock splits. (Leila Navidi/The Minnesota Star Tribune) Fastenal likes stock splits Fastenal also does something unusual with its shares, regularly splitting the company stock when the price consistently reaches a certain level. It is recognition of the achievements the employees have accomplished and an opportunity to reset goals, he said. “We’re going to split the stock, and we’re going to start our climb over again,” Florness said. Fastenal continues to grow, capturing more market share. It's also committed to staying in Winona. (Leila Navidi/The Minnesota Star Tribune) Striving to be modest The philosophy matches the values that form the foundation for Fastenal. Florness attributes a lot of his leadership style and success to his predecessor, Kierlin, who summed up the company’s culture into 10 principles of leadership and published it in “The Power of Fastenal People.” Kierlin, who died in February, was famous for modest living, evident by his thrift store suits and the budget hotels he stayed in on business travel. The book was among the first information loaded into Blue AI, Fastenal’s artificial intelligence system that also learns from the constant stream of data from Fastenal’s operations. “Part of it was a tribute to Bob,” Florness said. “It’s one way to ensure our special culture continues to thrive at Fastenal.” The principles are designed for the greater good of Fastenal rather than the individual, Florness said, and are still relevant today. Some of the tenets include listening, sharing rewards, letting people learn and remembering how little you know. Steven DuBois forges products in the manufacturing plant at Fastenal headquarters in Winona. (Leila Navidi/The Minnesota Star Tribune) Fastenal loyal to Winona Kierlin’s values extend to Fastenal’s relationship with Winona. Few Fortune 500 companies are based in cities as small as Winona, population 26,173. Minnesota has two with Fastenal and Hormel in Austin. Hershey and its Pennsylvania namesake is another example. Fastenal’s five founders, including Kierlin, were graduates of Winona Cotter High School. Patrick Kennedy Reporter Business reporter Patrick Kennedy covers executive compensation and public companies. He has reported on the Minnesota business community for more than 25 years. See More
