If you enjoy the Dean’s Speaker Series, or insight from individuals with real experience in the business world, you should check out UBGA 177 (Special Topics in Business and Public Policy) taught by, the always cordial, professor Alan Ross. The class hosts brilliant guest speakers on a weekly basis. Recently, to attest to that quality, George
Zimmer, founder and former CEO of the Men’s Warehouse, came to speak about success in business, acting ethically, and the value of maintaining a strong culture.
Zimmer began his talk by providing some background into the history of the Men’s Warehouse. His outlook when starting out was simple; he saw it as an adult lemonade stand, smart and sophisticated, yet simple enough that it was easy to manage. Zimmer also went into business with no real mission statement other than setting a goal to balance profits while still being able to do the right thing and have fun. This may not have been the most orthodox way of going into business, but it has served him and his company well; the Men’s Warehouse continues to thrive.
After 20 years in business the Men’s Warehouse went public. Zimmer explained that this was a boon for cash inflows and led to rapid expansion for the company (one new store a week), and it was around the time of expansion that he noticed the need for strong leadership throughout the company. He discussed the successful use of ‘Servant Leadership’ in the organization where managers were measured not on their own success but the collective success of the areas they oversaw. This style has proven to have great long-term benefits.
Long-term benefits have been a major focus for Zimmer. He has always put emphasis on targeting all other stakeholders before shareholders, and to push past the short-term pressures of stock prices in order to build valuable long-term relationships with employees and customers. By doing so, he claims, you maximize shareholder value in the long-term far greater than you would catering to short-term demands. These aren’t just words, Zimmer has practiced this in business, often to the dismay of his board, but with the success of his company, it’s hard to argue that catering first to other stakeholders is poor corporate strategy.
The second half of the lecture focused on building business on strong ethical and cultural grounds. He explained that Trust, Fairness, and Respect are the three major building blocks of an ethical business, and went on to discuss how The Men’s Warehouse met these values by promoting talent from within the company and even providing financial aid to employees in need; among other things. Everything “Starts out with trust.” Zimmer stressed, and customers themselves have to believe it just as much as those inside the company do. It’s this outlook that is the origin of “I Guarantee It,” which, with great success, has helped ensure customer confidence, and also become an integral part of the company’s culture.
Another aspect of that culture is a belief in compassion. Zimmer talked about opening infant care centers at his company’s major offices to assist working parents, as well as the company’s Health Insurance viewpoint that the less you earn, the less you pay in healthcare costs. He also pointed out that compassion goes beyond the workplace, explained that the Men’s Warehouse, through donor help, supplies 100 thousand suits a year to men looking to re-enter the workforce. It’s from this compassion and a desire to create a fun, not frivolous work environment that has put the Men’s Warehouse in the Fortune top 100 places to work for, eleven years running.
Zimmer admits doing the right thing isn’t always free, however investing in your employees wisely can yield greater dividends than if time and resources were used elsewhere. That commitment to employees has saved the company money. Shrinkage (employee theft) was only $5 million last year, and while that may seem like a lot, it’s paltry compared to the $2 billion in sales the company does. Even Macy’s, which is doing $25 billion in sales, has shrinkage of $500 million.
Finally, Zimmer touched on ethical issues facing his company today, ranging from trying to bring factories back into the U.S. to creating more honest advertising. He also brought up the value of culture, claiming it is “the single most important thing” for a company, that it “suggests longevity” and helps a business transcend the lifetime of its founders.
Ultimately Zimmer believes that business leaders should be mindful of the old adage of “do unto others,” because, in his words, “Following the golden rule has been a reasonable way to achieve success. I guarantee it.”