Harvard Business Review Online | Passion for Detail

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Passion for Detail

The man has broken nearly every record in the history of his sport. Along the way,

he’s learned a thing or two about developing talent—both equine and human.

A Conversation with D. Wayne Lukas

D. Wayne Lukas and Julia Kirby

It’s May, and for any American fan of Thoroughbred racing that means one thing: the Triple Crown. The first of the races,

the Kentucky Derby, is run this year on May 1, followed in short order by the Preakness Stakes on May 15 and the Belmont

Stakes on June 5. What better time, then, to compare notes on management with famed horse trainer D. Wayne Lukas?

No one has trained more winners of Triple Crown races than Lukas—his 13th victory with Commendable in the 2000 Belmont

Stakes tied the record of training legend “Sunny Jim” Fitzsimmons. And that’s just the beginning of a long list of accolades

attached to his name. His 17 Breeders’ Cup wins make him the all-time winningest trainer in that prestigious series of races,

too. In 14 different years, he has been the top trainer in the United States in terms of earnings; his lifetime earnings are

now approaching an astonishing $250 million.

Although Lukas’s accomplishments are undeniable, he remains a controversial figure in his industry. Early on, he bucked

long-standing traditions and came up with a program unlike any other trainer’s. His willingness to ship horses across the

country to compete in fields where they had better chances of prevailing meant more victories, happier clients, and a

reputation for success that brought him even better horses. The virtuous cycle, as many of Lukas’s fellow trainers have

learned, proved tough to beat.

But what wisdom can a horse trainer offer to a corporate manager? Let’s start with the fact that the very word “manage” has

an equine origin. It comes from Latin, by way of the Italian word maneggiare, meaning “to handle, to train horses.” Beyond

that, consider that Lukas’s challenge is to spot talent early and develop it into world-class form—despite the fact that the

talent in question can be headstrong, sensitive, or, yes, even lazy. But does the connection go any further than etymology

and metaphor? To find out, HBR senior editor Julia Kirby asked Lukas about his business model, strategy, client management

—and, most of all, what it takes to cultivate winners. Their edited conversation follows.

To what extent are winning racehorses born rather than made? How much is your job about strategy—choosing

the course for the horse—and how much is it about changing the horse by developing its talents?

The most important ingredient, and a lot of people forget this, is the horse himself and his God-given talents. One of the

biggest assets a trainer can have is a good eye in the selection process. Some people just have a knack for finding the

unproven yearling at a sale, privately, or on a breeding farm. And I’ve been around other people who I thought were pretty

good horsemen per se who just can’t see it in the young ones. You have to have a certain amount of vision—it’s like trying to

find the next Michael Jordan in the eighth grade.

Now, once you’ve got that established—you’ve got a horse whose conformation is good, whose bloodlines are good, and who

looks the part of the athlete—the next step is to develop his full potential. You have to be able to give him what he needs to

get to the winner’s circle.

And how do you determine what he needs?

First, you have to find out what he does best and what he can do best. Is he a sprinter? Can he run a middle distance? Does

early speed confuse him? Or does he like early speed, and that builds his heart up and makes him bolder? Horses that prefer

to follow, you sometimes have to train them to lead; those that want to lead, you sometimes have to train them to follow.

What makes it so interesting is that they’re all different. What works for one doesn’t work for another. The biggest thing

when you’re training horses is to be very observant. You must pick up on the little things. Everybody’s doing the big things;

everybody is going to nail the aerobic heart rate and get the lung capacity up; they’re all going to get things right

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conditionwise. We all use the same feed companies, and the same veterinarians are available to everybody. And we all use

the same blacksmiths, pretty much. So what’s the difference between one guy winning and the other guy just being there?

It’s the small things. I can tell by looking at my horses if they’ve lost three or four pounds in two days without weighing

them. Every little sign of their lack of energy or overenergy has to be observed and programmed into your thinking about

what you will do the next day.

And you have to keep trying different things. That’s one of the things that marks our program: We never give up on a horse.

We just keep trying and trying. We’ve got lots of cases to prove that. One example is Spain, who had had a very mediocre

career when I got her. She had earned nothing. Now she’s the all-time money-winningest filly in the history of the breed.

And the horse I won the Kentucky Derby with in 1999, Charismatic, was pretty much a failure early on in his career. I

couldn’t get any kind of production out of him at all. In fact, it got to the point that I even ran him for a claiming price—

twice. That meant, according to the rules of the race, that we put a price tag on the horse and anyone who was willing to

pay the price could walk away with him. And nobody took him. That’s how poor his form was. But I kept trying different

things.

What eventually did the trick?

I finally said, “I think this horse is fat and lazy, but I’m going to get him dead fit. I’m going to ask him to do things that he

wouldn’t dream of.” And I bore down on him, I drilled him, I treated him with tough love, if you want to call it that—and

suddenly I had a fine-tuned athlete that went on to win the Kentucky Derby and the Preakness and almost won the Belmont.

That tough-love treatment must backfire sometimes. Can you demoralize a horse?

Very quickly. The horse is going to react to every stimulus, one way or the other, adversely or positively. And the bad things

that happen in the training program seem to have a way of sticking around a lot more than the good things.

A horse’s mental state is, to me, three to one more important than his physical state. That’s true in all athletic performance,

really, equine or human. You see it all the time in the NFL, when the teams are heading into the play-off season. Usually it’s

a question of stepping over that very fine line between good conditioning and staleness. Getting back across that line with a

horse is really a tough job.

That’s a surprising claim, that what matters most with Thoroughbreds is their attitude. I think of them as

running machines.

They’re a lot more delicate and sensitive than you can imagine. One of the things we always tell our people is, “Never take

the try out of the horse.” If he loses the try, the joy of participating and competing, you’re in trouble. Yet you’ve still got to

bear down on him to the point where he’s fit enough to go a mile and a quarter. So therein lies the problem. Right there.

So is it important to engineer early wins in a career? Or does that make a horse overconfident?

I’ve had awfully good luck not winning my first races with young horses and letting them have that experience. I’m almost

known for that. But what you’re asking about—the management of the horse—is very important. The old saying in the

Thoroughbred industry is “You keep yourself in the best possible company and the horse in the worst.” You need to find

spots where he can gain his confidence. It’s like managing a fighter. You don’t want to come out fighting the number one or

two contender because he’ll whip up on you. You need to come up through the ranks. If you can do that with a horse, it’s

very productive. Those first experiences are paramount to his success.

The management of the horse is very important. The old

saying is “You keep yourself in the best possible company

and the horse in the worst.”

Are those your most strategic decisions as a trainer—putting a horse in the spot where he’s competitive?

That’s right. And the hardest decision is when not to race. Sometimes, whether it’s because of a purse structure, or pressure

from your clientele, or the prestige of the race, or even media pressure, you tend to do more with the horse than you

should. Stepping back and saying no is very difficult.

Is there such a thing as an untrainable horse?

I haven’t run into one yet, but I think some of my colleagues have.

My feeling is—and I preach this to my people all the time—the horse is always right. Whether he’s not wanting to get into

the trailer, or he’s raising hell in the starting gate, or he’s bearing right on the turns, he’s trying to tell you something. It’s

just that the language is not clear sometimes. You need to get to the bottom of it. But there is no such thing as a bad horse,

just like there’s no such thing as a bad child.

You mentioned the clientele—the owners who put their horses in a trainer’s hands. Let’s talk about managing

that relationship.

Well, it would be good to be a master psychologist.

That bad, huh? Let’s start with who these folks are—and what they’re trying to achieve.

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Usually the people attracted to our business are very competitive, smart, and aggressive and have been very successful in

their own businesses—that’s why they have the wherewithal to get into this at some level. Often, they’re retired CEOs or

people who have built businesses from scratch, then sold out. They have money to spend, and rather than buy the Houston

Astros they get into the horse business, which is a little easier and not quite as expensive.

And surprisingly, although they had no prior experience in the horse business, they become knowledgeable very quickly!

They think that the same competitive spirit and management skills they demonstrated in their own business will carry over

to this one. And of course they are the check writers, so they want to be involved in the decision process. They are

something like the owners of sports franchises who can’t leave the coach alone. But if you ever want to screw up a horse,

have two people making decisions about him every day. That’ll do it.

What do owners want to argue about?

Usually they want to run the horse. But that’s a day-to-day decision, and it involves physical factors and mental factors, as I

said. Unless you’re right there sleeping with the horse, so to speak, it’s hard to know whether he should run in that next race

or not. But when you have big races coming up, you’ll start hearing, “We’ve invited our friends, they’re coming in from out of

town, we’re having an outing, and we want him to run.” All of that enters into the equation. The best owners that I’ve ever

known have said, “Look. I’ve hired you to do a job. I’m going to step back and let you do it.”

Help us understand your business model. How does a trainer make money?

We get a per diem—that is, we charge so much per day to train a horse. But in my 40-year career, I have never, ever

broken even on the per diem. No matter what I charge, I have not been able to figure that out. And I doubt that any of my

colleagues can either, unless they’ve got a mom-and-pop deal, with the four kids cleaning out the stalls.

Trainers get a percentage of what the horse wins. I’m trying to figure out how to keep ahead on that, but I haven’t figured

that out, either. I guess if you’re really budgeting and staying close to the vest, you can keep some of that percentage, and

I’m sure most guys do. But if you don’t win, then you don’t get anything. So it’s an up-and-down, very volatile income.

The real juice in the deal is that when you train a good horse, a stallion, it’s customary for the trainer to get a lifetime

breeding right to that stallion. So if you can train ten or 15 stallions that are out there breeding every year, the annuities

from that are going to be absolutely fantastic. Say you were lucky enough to have trained Storm Cat: That would mean that

every year you’d have one breeding worth half a million dollars. If you were lucky enough to have trained AP Indy, that still

would be $175,000 a year. And if you had ten stallions working, even if they each were getting just $25,000 or $30,000 a

year, that is a great, great annuity for you. That’s how you send the kids to college.

You’ve done pretty well at the winnings game, though, too. Your lifetime earnings are more than double any

other trainer’s in history. And you reaped those rewards by competing in a whole different way.

We changed the game. When I first started in the industry, everybody who owned a stable stayed pretty much in one

location. If a Charlie Whittingham or a Woody Stephens had a barn of 20 horses, they were reluctant to race anywhere but

Santa Anita, or Belmont, or whichever track they were near.

We took the position that, if we were going to represent these high-powered clients who were used to showing a profit, then

we were going to have to improve our success ratio. But we realized that not all players can play in the big leagues. Not

every horse is going to be able to run at Santa Anita, Belmont, Saratoga—the top end. And we were not going to be infallible

in picking young horses that could compete at the highest level, any more than you could scout the colleges and pick every

kid to play in the NFL. So we said, Let’s develop a program in which every horse will be successful. If he can’t run at Santa

Anita and Saratoga, we’ll drop him into Monmouth Park. If not Monmouth Park, we’ll drop him down to Delaware. If he can’t

compete in Delaware, we’ll take him to Omaha. And you know what happened? All kinds of records fell. We started

dominating across the country. The catchphrase was “D. Wayne off the plane” because we would take a horse anywhere in

the world we thought it could win. And consequently, we had a lot of happy owners, we made a lot of money, we developed

a reputation, and things got easier.

How did you have that insight? Why hadn’t anyone thought of that?

It’s a business that is so rich in tradition that you can’t budge people. And I came along, upbeat, brassy, and confident, and

I said, “We’re going to do it differently.” I even went so far as to put white bridles on the horses—and everybody said, “How

bad is that?” But I didn’t want to blend into the masses. I wanted to stand out. And the word got out in the industry: “Watch

out for the white bridles.” I was running fillies against colts. The old traditionalists said you should never do that. We not

only did it, we made a filly Horse of the Year. We won the Kentucky Derby with one, which had the old hardboots choking on

their mint juleps.

Running a filly against a colt? How momentous a decision was that for you?

It wasn’t. I looked at the statistics and said, “Hell, she runs faster than they do.” What difference does it make? She wasn’t

going to make a date with them; she was just going to go out there and whip them.

Spoken like a true revolutionary! But I’ve also seen you referred to as the hardest-working trainer in the

business.

I think that reputation probably is well founded. I’ve gone as many as eight or nine years and never missed a day at the

barn. To train a horse and be successful you have to get right in the middle of the deal, and you have to be very, very

intense and involved. The people who don’t succeed, usually the thing that undoes them is that they just can’t handle 365

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days a year, 18 hours a day.

It happens all the time. These young guys come along and say, “I want to be part of the program. I’ll do anything, and

salary’s not important. I’ll sleep in the stalls, I’ll work long hours.” I look them right in the eye and say, “We’re going to test

you on that one.” About a month later they’re saying to me, “My gosh, I never dreamed I was going to be here this much or

put these kinds of hours in. Don’t we ever get a day off? Or an afternoon, even? I’ve got to get a haircut!”

You have a reputation as a tough boss.

People know I’m very demanding, very intense. I ask them to put in the hours. But I’m fair with them, and I reward them

for what they do. I’ve always pushed my good people to the forefront, had them talk to the press and so on. I’ve always

been very quick to give them credit when they’ve had a direct impact on a horse that’s successful. But I’m not easy to work

for because we do it right. All the time. One of the guys called me the other day and said, “I can’t sleep. I’m constantly

worrying about where I’m supposed to be or if I’ve forgotten anything. I’m waking up in the middle of the night, staring at

the ceiling. I don’t know what’s happening to me!” And I said, “Perfect. You’re coming along just great.”

How many people are in your organization?

Eighty-seven this morning.

How many report directly to you?

There are five key people. Each of them has to call me to check in between 4 and 5

AM

every day, and again between 11

AM

and 1

PM

every day, because I want to know how the morning went. I don’t want any surprises. And the last thing

before they lay their heads on the pillow, they have to call ol’ Wayne again. I want to know that everything is good at the

end of the day.

There are five minutes of democracy every morning, when they have an opportunity to express themselves. And then the

dictator takes over.

There are five minutes of democracy every morning, when

they have an opportunity to express themselves. And then

the dictator takes over.

I tell them, “Never bring me a problem without a solution.” I say, “If you’ve got a problem, give it to me straight, and I want

to hear all the bad news first. But don’t just drop it on me. You tell me what you would do in that case. And then I’ll tell you

what we’re going to do.”

And how often do you find yourself coming up with a different solution?

Quite a bit. Because they’re inexperienced, and this is an experience game. But I tell them never to take what I say for

granted and always to ask why. One time I had a young assistant with me at the sales, looking at yearlings. I sent him out

and I said, “Here are the four horses that are on my short list. Go grade them and come back and tell me what you think.”

And he came back and said, “Boy, I love three of them, but I just couldn’t see it on the fourth one.” I said, “What didn’t you

like about that one?” And I quizzed him pretty hard. And then I said, “You’re perfect. Because that one was the decoy. And if

you had said you liked them all just because I liked them, I would have been really disappointed in you.” Just because I say

something, it doesn’t mean they shouldn’t think about it.

And I make them practice their penmanship. I make them write out.…

Wait a minute. Did you just say penmanship?

You should see how some of these guys write. And I call on the phone to see if they answer “D. Wayne Lukas Racing Stable”

the way I want. If they do, I call back. And then I call back again. If they show up at the wrong time or their wardrobe isn’t

up to snuff.…

That’s another thing you personally are known for.

An old-timer once told me: “Wayne, wear the most expensive clothes, drive the best car, and keep a deep tan. You’ll fool

most of them.”

My guys are the sharpest guys in the industry. I tell them, “We’re not going to lower our standards. It’s easy to do because

we’re surrounded by people who have. So we’re going to guard against doing that. When we go to the paddock, we’re going

to be spotless.” I had a kid one time—it wasn’t a kid, in fact, it was Mark Hennig, who’s now a very successful trainer in his

own right—and he was in Monmouth Park with a division of mine. I was watching on television, and he won two big stakes,

back to back. I called him on the phone; I was quite proud of him. But when he answered, he said, “Boss, we done good.

Boy, we done good today!” And I said, “You hillbilly SOB, I trust you with the best clientele in America—educated, highly

successful people—and you answer the phone and tell me ‘we done good’?” He never forgot it. After that, he’d say, “We did

well, coach.”

This strikes me as kind of military.

Very much so.

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Are you a military man?

No.

Then explain to me why you think these things are important.

I think that the discipline you develop outside the barn and the discipline you develop in your life will carry over into the

discipline I need from you in handling the horses and in the stalls. We keep our barns spotless not because a horse will run

any faster if the barn is absolutely spotless but because that discipline will carry over to what does make a difference.

When you’re dealing with people, do you sometimes think they’re just like horses? Does it seem like it’s the

same set of issues?

I think so. You have to know when to back off and when to bear down. When to kick ass, when to pat them on the back,

when to hug them, when to chew them out. I think my assistants would tell you that they’ve never had their parents speak

to them in the way I have on occasion. But they can make a lot of mistakes and I’ll overlook them. The only thing I really

cannot tolerate is a lack of effort. And I don’t tolerate that very well with a horse, either. When it gets to that point, I have

to say, Look, this horse is wasting my time. Let’s run him for a claiming tag. Or, this kid is wasting my time. I’m going to

send him over to Baffert’s barn.

What’s the thing you’re proudest of?

Well, we hold almost every record in racing, but in the past four or five years we have gained a reputation for turning out

top assistants. At this point, I’ve got about 11 former assistants out there that are very successful in the business. And it’s

getting so, if they come out of our program, people are just gobbling them up. In fact, they’re starting to gobble them up

even before they get out of the program.

See, there’s no computer program or video you can buy that demonstrates how to train a horse to win the Kentucky Derby.

There just aren’t any how-to books. It’s a trial-and-error, learn-by-experience profession, and a lot of it is handed down. But

the problem is that a lot of the great old-timers don’t teach. They never have. My coaching background—I spent ten years as

a teacher and a basketball coach—lets me do a lot more teaching than my colleagues.

Make no mistake: I’m competitive with all the trainers out there. This is still a game of experience, and I like to kick their

asses whenever I can. I go after them every day—and I like to keep score, too, because that’s what motivates me. But to be

truthful, I think the legacy is probably going to come down to turning out all those superstar young guys. Now we’re

becoming just as famous for them as we are for our champions. I never thought that was where it was going to go, but it

seems like it’s heading that way.

Reprint Number R0405B

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