This article discusses a Case Study from the Stanford Graduate School of Business that is subtitled: Success in A Declining Industry.

The founder, George Zimmer, opened his first store back in 1973, at a time when competitors were closing their doors. From opening to the time of the article (1997) the Men’s’ Wearhouse enjoyed 30% growth. Between 1991 and 1996 they grew from 113 stores to 345 and from $133.4 to $483.5 in net sales. This Case is a study of some of the things they did right.

Some of the things that I think they did right:

• Humanism. George Zimmer said: “I’ll tell you the last thing most MBA’s probably think of as value is the untapped human potential…the culture says, ‘It’s got to be quantifiable’.” They understood that their people were not disconnected from the rest of their lives when they were at work and had holistic views of their people. In terms of sales and their salespeople they understood that customers could unconsciously tell the difference between a “fake” salesperson and a salesperson that is being part of a genuine human interaction. They saw their salespeople as “consultants” who could expand off someone’s initial request but not sell them something they didn’t want or need for their own benefit. They used the term “selling with soul” and “becoming an artist as a salesperson” as well as “make an emotional connection” (a la “Linchpin” per Seth Godin which actually came more recently). They understood that sales involved understanding and serving people.
• Servant Leadership. In contrast to the ubiquitous ‘shareholders first’ mentality, they said that employees came first and shareholders last (my cynical side says ‘is this real or just lip service?’). Management treated the people they managed and worked with as their customers as well, which is a great policy. Zimmer set an example of his servant mentality by making a comparatively smaller salary than his industry counterparts. They also seemed to have a mentality of managers doing all jobs when needed, similar to Southwest Airlines; if a regional manager was visiting a store and saw a customer that needed help they would jump in and help.
• Open Door Complaint Policy. They encouraged employees to point out problems. Encouraging complaints and allowing problems to surface goes a long way toward improving the business’s structural systems.
• Abundant Training. Zimmer characterized training as the same thing as mentoring, just that it reached more people. He also tried to give his employees a sense of being connected to something with a higher purpose. However, all training was ‘in-house’; see “wrong” section below for the other side of the training subject.
• Tailored Performance Evaluations. While I’m generally not a fan of the Performance Eval, Men’s Wearhouse did do one thing that is worth applauding, if even for the effort: they, at least somewhat, tailored their Evals to the specific job, rather than using a “one size fits all”. This was a step in the right direction. On the down side their Evals did not have any team incentives which probably would have helped preclude inter-company competition and stealing of customers which they seemed to have some problem with.

Some of the things that I think they did wrong:

• Nepotism. Most of the management team and board of directors were George Zimmer’s relatives and boyhood friends and nepotism was not discouraged. While it can be personally nice to work with friends and family it can substantially increase the risk of such negatives as groupthink and lack of fresh ideas.
• No Outside Training and Promotion Only From Within. Men’s Wearhouse said that their “managers did not have the time” to do outside training. In-house training and promotion from within are nice in moderation but too much could create a stagnant situation of sparse levels of new energy and ideas.