Fastenal has grown by putting its people close to customers—not simply by delivering products, but by having employees understand what is happening on the customer’s shop floor and act on what they see.
This article looks at three examples of employee behavior at Fastenal:
- responding to a customer’s emergency without taking advantage of the situation;
- spending time inside a customer’s workplace and making recommendations based on what employees actually observe; and
- redesigning inventory locations not only to reduce costs, but also to improve worker movement and safety.
The question is not simply, “What does Fastenal do?”
The more interesting question is:
What kind of talent development environment enables employees to behave this way—and how can those behaviors contribute to market expansion?
Peemo, my AI Research Partner, gathers and organizes information from Fastenal’s public customer cases and other sources.
I then analyze those employee behaviors through the lens of The Extraordinary Leader™ by Zenger Folkman, Dialogue Works, PQA, and the HLS perspective.
The focus is employee behavior—and what HR and Talent Development can learn from it.
1. The Employee Who Responded Before the Customer Had All the Answers
One of the clearest examples comes from E-Z Drill, a Fastenal customer that experienced a major fire.
The customer contacted Fastenal’s general manager and asked him to bring “some of everything” that Fastenal had supplied during the previous six months.
The request was broad and urgent.
Fastenal responded quickly, with products arriving the next day. But what is particularly interesting is what the employees did next.
They provided conservative quantities rather than simply maximizing the sale. They also provided storage bins and shelves, labeled the products, and put them away.
The customer later described Fastenal as having handled the situation with “integrity and care.”
This behavior matters.
The employees were not merely fulfilling an order.
They were interpreting an ambiguous situation, anticipating what the customer would need, making a judgment about appropriate quantities, and taking responsibility for the customer’s recovery.
The behavior can be understood through several differentiating competencies in The Extraordinary Leader™, including:
- Displays High Integrity and Honesty
- Takes Initiative
- Solves Problems and Analyzes Issues
- Drives for Results
Zenger Folkman’s research emphasizes that extraordinary leadership is not about being equally strong in everything. It is about developing a combination of strengths that makes a meaningful difference.
In this case, the important point is that the employee did not wait for a perfectly defined instruction.
The situation itself became the instruction.
That is one characteristic of self-driven talent.
2. When an Employee Becomes Part of the Customer’s Organization
The E-Z Drill case provides another striking example.
Riley Flack, Fastenal’s local general manager, visits the customer’s plant every day. He talks with team leaders and operators, checks their needs, monitors unusual usage, and communicates about lead times and back orders.
The customer described him as almost like “an employee” of their company—even though he was not on their payroll.
More importantly, the customer said that if Riley saw something that would help the business but would reduce Fastenal’s sales, he would still recommend it.
That is a remarkable behavior.
It changes the employee’s role from:
“How can I sell more?”
to:
“What would make this customer more successful?”
Fastenal’s customer itself reported that this behavior contributed to trust and to the growth of its business with Fastenal.
From a Talent Development perspective, this is not simply a matter of customer-service training.
It involves several behaviors associated with The Extraordinary Leader™, particularly relationship building, initiative, integrity, problem solving, and results orientation.
But there is another important element.
The employee has to be willing to look, ask, listen, and say what he or she sees.
That is where Dialogue Works becomes relevant.
A customer’s workplace contains information that cannot be obtained simply by reading a sales report.
Employees have to enter the dialogue.
They have to understand what people are experiencing, identify what is not being said explicitly, and sometimes challenge the customer’s assumptions.
This requires a level of psychological safety as well: employees need enough confidence to raise an idea even when it may not immediately benefit their own company.
3. From Inventory Management to Improving How People Work
A similar pattern appears in Fastenal’s work with nuCamp.
The issue was not simply where to store fasteners.
Fastenal’s Lean Solutions team examined wasted walking, waiting, and travel inside the facility. It introduced five point-of-use storage locations and FASTBin RFID technology.
The result included a reduction in inventory quantities and approximately $14,000 in annual fastener savings.
But the redesign also considered ergonomics.
Bins were positioned with the movement of workers in mind, reducing the need to carry boxes weighing 30–40 pounds and helping reduce the risk of injury.
This is an important distinction.
A conventional supplier might ask:
“Where should we put the inventory?”
The Fastenal approach asks:
“How does the inventory affect the way people actually work?”
That shift changes the problem.
The employee is no longer looking only at inventory.
The employee is looking at:
- movement,
- time,
- safety,
- productivity,
- workflow,
- and ultimately the customer’s business performance.
The project was completed through a four-day transition and generated approximately $14,000 in annual fastener savings. The case illustrates how employees can redefine the problem rather than simply optimize the original request.
4. What Do These Behaviors Have in Common?
Dash’s analysis is that these examples share a common behavioral pattern.
The employees:
observe → question → understand → propose → decide → act → learn
They do not remain at the level of “doing the assigned job.”
They enter the customer’s reality.
They see something.
They ask questions.
They form a hypothesis.
They propose an action.
They act.
And they learn from the result.
This is why the concept of “being embedded in the customer’s workplace and thinking from within it” is more useful than simply saying “customer orientation.”
Customer orientation can sound like an attitude.
What we see at Fastenal is a set of observable behaviors.
5. Why This Matters for Talent Development
This raises a more fundamental HR question.
How do organizations develop employees who do not wait for instructions before acting?
It is tempting to answer:
“Give employees more autonomy.”
But autonomy alone is not enough.
If employees are given responsibility without the ability to observe, question, analyze, communicate, and make decisions, autonomy can simply create anxiety.
Fastenal’s examples suggest that self-driven behavior emerges from a combination of:
Capability + Trust + Customer Exposure + Dialogue + Opportunity to Act
This is closely connected to the philosophy of The Extraordinary Leader™.
Zenger Folkman’s research identifies differentiating leadership behaviors and emphasizes the development of strengths rather than trying to make everyone equally good at everything. The current model identifies 19 differentiating competencies, and its approach uses 360-degree feedback and strengths-based development to create focused development.
The Fastenal examples provide an interesting real-world question:
What happens when these leadership behaviors are not limited to formal managers, but appear in employees working directly with customers?
That may be one reason Fastenal can turn customer proximity into business opportunity.
6. From Employee Behavior to Market Expansion
Here is where the Fastenal case becomes particularly interesting for HR.
A company normally thinks about market expansion in terms of:
- new products,
- new customers,
- new regions,
- sales strategies,
- or acquisitions.
Fastenal suggests another possibility.
Market expansion can begin with what employees discover in the field.
An employee who spends every day with customers sees problems that may not appear in headquarters reports.
A customer asks for one thing.
The employee notices another problem.
The employee proposes a solution.
The solution creates value.
The customer begins using more Fastenal services.
And a new business opportunity emerges.
In the E-Z Drill case, for example, Fastenal expanded beyond supplying fasteners into cutting tools, vending, machine-time improvements, and other operational solutions. The customer reported more than $250,000 in cutting-tool-related cost savings from improvements involving machine time and cycle time.
The market opportunity was not necessarily discovered through a traditional market-analysis exercise.
It was discovered through employee proximity to the customer.
That is a powerful Talent Development implication.
7. The HR Question Is Not “How Do We Make Employees More Proactive?”
The better question may be:
“What kind of organization allows employees to notice opportunities and act on them?”
That requires more than a training program.
HR and Talent Development need to consider whether the organization:
- allows employees to question existing assumptions;
- gives employees access to the customer’s actual workplace;
- creates psychological safety for speaking up;
- recognizes initiative rather than only compliance;
- allows employees to experiment;
- treats mistakes as learning opportunities;
- and converts individual successes into organizational learning.
Fastenal’s CEO Dan Florness has also spoken about employee decision-making, mistakes, giving employees credit, and respectful disagreement. The important point is that autonomy is not simply the act of delegating responsibility. It depends on an environment in which employees can exercise judgment.
This is where Talent Development becomes organizational development.
The goal is not merely to create “proactive employees.”
The goal is to create an organization in which proactive behavior can create value.
8. Do We Need Another HR Tool?
One question raised by the Fastenal case is whether we need a new framework or competency to explain these behaviors.
Our current conclusion is: not yet.
The behaviors can already be explained through existing perspectives such as The Extraordinary Leader™, Dialogue Works, and PQA.
The more interesting finding is the common practice running across them:
Get close to the reality of the work.
Observe carefully.
Ask better questions.
Understand before deciding.
Challenge assumptions.
Act.
Learn.
The phrase I would use for this is:
“Think from within the customer’s workplace.”
It is less a new tool than a practical principle for putting existing tools into action.
9. The Fastenal Lesson for HR Leaders
For HR and Talent Development professionals, the Fastenal case offers a different way of looking at human capital.
Human capital is not simply the number of employees, their skills, or the training programs they have completed.
Its real value appears when employees use what they know to make better decisions in real situations.
That means Talent Development should pay attention not only to what employees learn, but to what they actually do afterward.
Do they notice something others miss?
Do they ask a different question?
Do they challenge an assumption?
Do they propose an alternative?
Do they act without waiting for detailed instructions?
Do they create value for the customer—even when that value does not immediately increase their own company’s revenue?
These are observable behaviors.
And those behaviors can become a source of business growth.
Final Thought
Fastenal’s story is not simply a story about an industrial supplier.
It is a story about what happens when employees are close enough to the customer to see opportunities—and capable and trusted enough to act on them.
The company’s growth can therefore be viewed from two perspectives.
From the business perspective:
Customer proximity creates new opportunities for market expansion.
From the Talent Development perspective:
Developed employees create the ability to recognize and act on those opportunities.
That may be the deeper lesson.
Market expansion does not always begin with a new market strategy.
Sometimes, it begins with an employee standing on the customer’s shop floor, noticing something, asking a question, and deciding to do something about it.
About the Research
Peemo is an AI Research Partner supporting SmartWorks’ HLS Global Case Research. Peemo researches and organizes publicly available information and identifies concrete employee behaviors in global companies.
Dash analyzes those behaviors through the perspectives of The Extraordinary Leader™ by Zenger Folkman, Dialogue Works, PQA, and the HLS approach, connecting employee behavior with Talent Development, customer value, organizational capability, and business growth.
SmartWorks is the exclusive distributor of Zenger Folkman in Japan.
The Extraordinary Leader™ is Zenger Folkman’s flagship strengths-based leadership development program, combining research-based leadership competencies, 360-degree feedback, and focused development.
Akira Chida (Dash)
CEO, SmartWorks Co., Ltd.
HLS Global Case Research
Research Support: Peemo
AI Research Partner