Men's Wearhouse

In a growing environment transcending to the decline, Men’s wearhouse was able to surpass its competitors and retain its successful trend. The key factor is the importance given to the employees. Zimmer always put forth the employees first and only then the customers. Inorder to treat customers likje kings, he felt that employees have to be treated like kings. Zimmer’s involvement in the anti war movement influenced his iconoclastic views. The Company’s expansion and growth was largely attributed to the fact that Men did not like to shop. The stores were small in size and not located in large malls thus cutting down on overheads and optimizing profits.
The employees shared an incredible loyalty to the Company showing their continuance of commitment. Zimmer’s charismatic media presence made him more significant to his employees. Zimmer’s belief in tapping the unravelled potential of the employees was a key to his success. The concept of servant leadership changed the traditional perspective of Boss –Employee relationship to thee Provider – Customer relationship. Mentoring has been widely advocated. Zimmer believed that interaction with people meaningfully created positive energy and maintained the organization as a “high touch” one. While prioritizing his stakeholder groups, Zimmer put the employees first. He believed that to maximize shareholder value, you have to place it at the bottom of the heirarchy.
In contrary to the conventional trend of concentrating on merchandising and marketing Zimmer’s focus was on store operations, which was considered critical to the success of the business. Wardrobe consultants were paid salary and commission. Commissions were based on individual performance.More than 50% of the salary was based on commission for legal reasons. There was an employee stock ownership plan. Training was more for sales and not as much for management.Hiring was centralized. The process of hiring was based more on personality and skills rather than experience. Nepotism was not encouraged. Emphasis was placed on providing feedback as part of a coaching and development effort to enhance the sales skills.Monthly newsletters and videos were circulated for effective communication. The Company encouraged socializing with each other. The Company had a number of meetings for training and development. There was a multi-unit managers meeting, a Suits High meeting and a Suits University meeting.
The Key management principles advocated were: Maximizing the individual’s self-esteem. This would lead toa higher self efficacy. The second principle was servant leadership. The other principle was to ask for help when you need it. Identifying success as not individual success but as growth and success of the peers.
In an industry charecterized by varied competition from retailers, to department stores to specialized chains, to maintain its stand is challenging. It would be difficult to maintain the competitive edge based on the unconventional management principles and to remain in close association with the managers. The Company should however capitalize on the win-win principle.

Gary Loveman and Harrah’s entertainment

When Gary Loveman, Professor of Harvard Business School was offered the position of Chief Operating Officer of Harrah’s, it raised many eyebrows. Gary was faced not only with the daunting task of channelising the performance of Harrah’s into a marketing – focused company but also to prove himself before the skeptical onlookers. He felt if he was on the right track, he could reach the coveted position of the CEO when the right time comes.
The Harrah’s business model was directed toward the gaming business, geographic expansion and customer service in sharp contrast to its competitors.

Diamonds in the Data Mine

When competitors were still reeling under the effects of the fast dwindling economy Harrah’s was able to retain its stand. This was largely due to the exceptional customer service and retention of customer loyalty. As per Harrah’s approach, securing customer loyalty or rather mining the customer database was achieved through the following steps
Acquiring a rich repository of customer information
Develop marketing strategies targeted toward the clientele
Identify core customers
Gather specific information about customers and appeal to them
Reward employees for prioritizing customer service.

Customers of Harrah’s are made to feel they are special enticing them to return again and again. This is again a strong illustration of the theory that behavior is a function of the Person and environment. When the atmosphere is conducive, customers feel comfortable and behave in the desired fashion. To have a devoted clientele in a fickle minded industry is highly surprising. Database marketing and analytical tools have been a strong aid toward this approach.
Rather than depending on the frills, the company steered toward expanding its frontiers and focusing on its prime revenue – the casino. Customer relationships was given a lot of importance. The Total Gold rewards program aided the technical analysis of customer preferences. This analysis revealed the unexploited potential spending of gaming money of customers. Customer worth was calculated and lifetime worth was evaluated. The Company decided to treat customers as per their potential worth and reward them accordingly. Marketing was driven toward customer aspiration. Triggers were set and analyzed. The preference of the customers toward the slots were taken into account.
Customer satisfaction was designed to reinforce loyalty. Employees were suitably rewarded based on improved customer satisfaction. Score-driven customer satisfaction allowed the growth of the company.

Sins of Commission

Incentives and Commission – a boon or bane? While in some cases it encourages short term growth and improves performance, it evinces a lot of unwarranted results. The first illustrated incident wherin the couple ultimately decide to choose a different dealer exemplies this fact. Customer service and encuragement of dealer loyalty should be stressed for desired results. The next incident regarding the truckers in New Mexico displays how a well intentioned strategy went awry. Either the workforce should have been increased or the hazards of carrying overweight garbage and speeding should have been stressed enough. Assigning manageable tasks in the required timeframe might have been more efficient in this case. The belief that employee compensation contributes to the company performance and management issues is a misconception as this can produce undesirable effects. Instituting merit pay for teachers to teach children has found to lead to cheating on the part of teachers. Behaviour is a function of the person and the environment and these cases elucidate this fact.

Arrow Electronics

Arrow Electronics has grown in leaps and bounds since its inception as a retailer of radio equipment. Expanding into semiconductors and electronic components, Arrow has been the worl’s largest distributor with a swaggering $6 billion in sales. The CEO, Stephen Kaufman, felt that execution of the Company’s strategy was an important aspect of a CEO’s job. Finding the right jobs for the right people and motivating them for effective execution of the strategy. He felt that the major strategy issues require periodic attention while human resources issues require daily attention. Kaufman took a lot of efforts in building a talented sales force and felt that the people were their main asset. Relationship with Customers and suppliers was dependent on personal relationships.
For salespeople commission was an important criteria. If the market slowed down and the commissions went down, they would start looking at another distributor.

Nordstrom - Discord among Unions

From a debutante as a shoe –retailer, Nordstrom has come a long way from its humble beginnings. With a track sales volume that was almost double the industry standards, and a diversification into apparels and accessories, Nordstrom enjoyed the highest profit margin in the industry. It was distinctly clear that the customer-service was the back-bone of this highly productive company. The liitle feats of the customer-service personnel , way out of their expected job schedule went a long way to boost customer-service. Its innovative commission system of sales per hour was acclaimed as an effective strategy. But critics feel otherwise. The salespeople had to put in their entire working hours and more to account for the target sales and yet have to find time to run errands for customers. This was leading to high pressure contrary to being a motivation. Promoting within the Company also increased experience in the Company. The management also endorsed a decentralized system of operations which was highly prone to misuse. The peer pressure and group recognition although encouraged the employees they eventually did lead to a lot of pressure and sometimes led to sharking, stealing sales credits. The Sales performance of the employees could be tracked by an automated process which enabled comparison with others and also aided in estimating their performance related to their targets.
Inspite of its commendable reputation Nordstrom got caught up in a whirlwind of complaints, union allegations, and lawsuits. Some of the concerns were that the Company coerced the employees to work “off the clock” without being paid. The employees had to run errands for the customers which were not paid for. The Washington State Department of Labor & Industries did an investigation and concluded that the allegations were true and the Company had to back-pay the employees.
The management tried to improve the existing system and recapture its lost glory by initiating procedural changes. Employees had to indicate the extra hours worked. This was again criticized because the Company had to maintain the hours. The Nordstrom stockholders filed lawsuits against the Company for financial losses incurred because the Company failed to disclose their labor problems and the early claims for unpaid work.
The employee grievances only prove that the management had severe flaws and would ultimately lead to detioration of the Company’s honor.

SMC -Beyond the realms of Functional Silos

With an impressive history of the founder, Dr.Winthrop, being a pioneer in the development of specialty chemicals for the pharmaceutical industry, one would anticipate that the sales growth would be in leaps and bounds. With the leadership of Tompkins, stability and maturity grew but the growth in sales was disappointing. With the entry of Carl Burke, came a whirlwind of action. Although the Company was acclaimed for its products, their liason with the biotech and generic companies was trailing behind. Burke’s study revealed that marketing and product development exhibited potential for growth. Finance and Administration needed more attention, especially in areas of Customer Service and Personnel. Burke formed the leadership team to focus on key strategic and organizational issues. Burke’s research led him to believe that the lack of vitality in the team could be attributed to the deficiencies in the system given the ratings and high pay awarded to almost everyone.
Laura Wells, an independent consultant with expertise in executive and organizational assessments was called to give her report. Her assessment comprised of psychological interview, observation and test data. She also insisted on being included in the team meetings as that would aid in her behavioural analysis. After extensive analysis, Laura’s report consisted of many useful revelations on the strategic and organizational level. The inefficacy of the members of the leadership team to stray beyond the confines of their “functional silos” was pointed out. Carl decided to split the sales force, marketing and product development for Pharmaceuticals, Biotech and Generics, which was an intelligent move.
The Vice Presidents of the various disciplines were tested for their cognitive and intellectual functions. Their strengths and weaknesses were analyzed and their career background was studied. For every key person in the leadership team, a summary was construed based on this study. This enabled Burke to assign work based on their skills and their abilities.