Thursday, January 14, 2016

Where Did I Earn My Degree? Nordstrom.

In 1986 I had just graduated from high school and was living in San Diego to go to school at SDSU. I needed a college job and had retail experience so I went to my favorite store at the time, thinking an employee discount there would be the best benefit I could get. Turns out, the discount was a just bonus, the real benefit I got from working at Nordstrom was the college-worthy business and leadership skills I took with me when I left the company. At the time, we were a West Coast company, with Mr. Bruce, Mr. John and Mr. Jim at the helm.

Here is what I learned:
  • The Best Leaders Serve Followers – During my tenure as Director of Training, I would show during our new hire orientation class a company org chart in the shape of an upside down pyramid. Customers were above the pyramid on top, the first tier was our front line employees, the middle managers came next and at the bottom the senior executives and Nordstrom family, in the small point, supporting everyone else. We used to say “At this company you work your way down.” As a department manager I worked for my team, not the other way around. Our roles were very clear.
  • Profit and Loss – As a 19-year old department manager, I was responsible for setting my own budget each year. I learned how to do forecasting, how to understand the difference between fixed and variable costs, how to manage costs associated with payroll, overtime and inventory. I was allowed to set aside a “Make the Customer Happy” budget to provide exceptional customer service without having to go through layers of approvals. I basically learned how to run my own little business within their department store. That responsibility came with accountability that me and my peers took very seriously.
  • The Power of Yes – Every policy at Nordstrom was focused on ways to say yes. “Yes, I can return those worn shoes for you.” “Yes, I can give you back cash or credit.” “Yes, you can just sit here and listen to the piano. Can I buy you a cup of coffee?” We had a policy that no front line employee could say no to a customer: you needed a manager for that. Analysts used to say that the return policy would bankrupt the company with too many people taking advantage of us. The Nordstrom’s were confident that most people were honest and refused to set a policy that penalized the majority because of the minority. It’s a small thing but unbelievably impactful on employee morale to be able to focus on the good and say yes to your customers, instead of trying to catch bad guys and say no all day (like 99% of other retailers out there). Do the right thing and it leads to profit, I’ve seen it firsthand.
  • Humility – The Nordstrom philosophy was promote from within which meant every one of us that ended up in management had worked in a stock room or a sales floor at the beginning, including the Nordstrom family. I worked alongside Mr. Erik in those days (now one of the co-Presidents) and he spent many sale days with us ringing, bagging, stocking and helping customers. No one was above the hard work of retail no matter what your last name was.
  •  Use Good Judgment – This is rule #1 at Nordstrom. Instead of either giving employees no empowerment assuming they can’t handle it or micromanaging each person, the Nordstrom culture was one of accountability. Everything had consequences so we were judicious in our actions and decisions. Management was there to support us, but still made us independently find solutions to problems. Good judgment was rewarded well and bad judgment required a reflective discussion. Learning from mistakes was mandatory.

These business principles are relevant whether you work on Wall Street or Main Street. I am still a proud “Nordie," and, in fact, highlighted the company in my book as a role model of good leadership. The only reason I left in 1993 is because I wanted to pursue a career in learning and development, and ironically, there was no such career path there at that time. I am thrilled to hear how successful they remain, there was a great article in Delta Sky magazine last month about them (http://deltaskymag.com/Sky-Extras/Favorites/The-Nordstrom-Touch.aspx) if you’d like to learn more about this amazing organization.

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