"Profit in business comes from repeat customers, customers that boast about your product or service, and that bring friends with them."

-- Williams E. Deming

Our experience shows us that only about 1% of top business leaders have any idea what that means. Do you?

Here Comes Nordstrom

Down the street a few miles from our home here in Naples they're building what will become a Nordstrom department store, rumor has it in late 2008. Jane and I can't wait. We know what's coming.

Here are three things we can all learn from Nordstrom. There are plenty more, but today we'll stick with just three.

Lesson One: Nordstrom hires for attitude.

I asked my friends at the Nordstrom corporate headquarters in Seattle, and they tell me they haven't selected a general manager for Naples yet - they won't until just a few months before the store opens.

Ah, but once they assign the GM to Naples, this is what will happen. The GM and her top managers will move to Naples and get settled in their new community. They'll dine out. They'll go to the bank. They'll go to all manner of events around town; art festivals, kids' days at the park... you name it. They'll go grocery shopping, and buy insurance, and get a haircut, and stock up on vitamins, and do everything else a person does when she moves to a new place.

...And all the while, they'll be recruiting. Nordstrom managers are bred to poach talent from wherever they find it. Tomorrow's leading sales pro may be today's animal shelter receptionist. Just wait and see.

Nordstrom's smart. They hire people for attitude, almost entirely disregarding resume. After all, why untrain all those bad habits from an experienced retail sales clerk, when they can start fresh with someone they meet at the dry cleaner's?

Coine used to hire staff from ads we'd place in the newspaper and online. That rarely worked out well for us. When you think about it, you're fishing in the toilet bowl.

Today, we hire exclusively from three sources: through referrals from professionals we admire, through sharp and ambitious people who approach us looking to join our company, and through a lot of the type of poaching that I just described.

This has transformed our firm, and made managing our people literally headache-free. If you hire for your company, I suggest you do the same.

Never run a help wanted ad again. Instead, poach talent.

Lesson Two: Nordstrom inspires its people.

Poaching is easy for a Nordstrom manager, too. That's because Nordstrom is a truly inspiring company to work for. Top sales talent makes all sorts of money. The people who fit their corporate culture - an not all do - perform at the top of their game, because they really feel a part of something special.

Here's one reason: when the new hires arrive for their first day of training, they will be given a five-by-seven card, the employee handbook. On one side, it will read,

"Use your best judgement at all times."

On the reverse, new hires will read,

"There will be no additional rules."

That's it. That's the Nordstrom handbook. Pretty cool, huh?

Well, maybe not to everyone. When my trainers and I present this information in our "C-Level" (CEO, CFO, owner, chairman, etc) workshops, we earn a lot of incredulous looks. The room often falls silent. I delight in watching these big cheeses shift in their seats. Finally someone will speak up.

"If we did that in our company," they say, "we'd be out of business in a day." That earns them a lot of sympathetic, uncomfortable laughs.

It's probably true, too. That's why most companies aren't as successful as Nordstrom.

Treat your people like adults, and guess how they'll act? Some will prove worthy of your new found respect; many others will wash out.

Good. Let them go. Then get out of the office and poach their replacements.

Lesson Three: Nordstrom top brass gets it.

If you're familiar with my work, you probably expected this presentation to go like this: Hire for attitude, Inspire through pride in the company, and Train for skills. It's our HIT model, and we can't stress its importance enough.

Yes, do the Training, which will be easy once H and I are in place. But today, I want to focus more on the Inspire part of HIT.

Nordstrom really inspires its people, all throughout its organization. The handbook - and more specifically, the spirit of that handbook - is one way they inspire pride. The inverse pyramid is another.

If you look at Nordstrom's organizational chart, it will depict a pyramid, with the board of directors, the Nordstrom family, and their top executives at a point, managers all through the middle, and a broad base of front-line employees there to interface with the customers. Just like every other company out there.

...Except that the Nordstrom pyramid is upside-down. The Nordstroms and top managers are on the bottom of the pyramid. The front-line workers are at the top of the pyramid. And above them, you'll find the customers.

The customers are the most important part of the Nordstrom organization. The sales clerks on the floor are the second most important. Department managers are directly below the sales staff, there to help, not to command. Each store's general manager is below his management team: it is his job to serve his managers and sales staff.

Nordstrom's corporate staff exists to serve its stores. Its tippity-top leaders go to work each day with the mission of facilitating front-level sales in any way that they can. They don't go to work to be served; they work all day to serve others.

Just a catchy wall ornament? Ask any Nordstrom employee you meet on the sales floor.

Nordstrom is coming to Naples, and the town will never be the same. Service will increase dramatically, as the bar is set that much higher. Some businesses will suffer, because their top performers will be stolen. And they'll deserve to lose these people. Sorry, guys: treat your people right now, and they won't even consider a better offer.

Hire for attitude by poaching top talent wherever you find it.

Inspire your staff by treating them like adults.

Serve your staff, who in turn will serve your customers.

That's the Nordstrom Way. Can you handle it?

My buddy Mark passed this email along to me. It sounds a little too "neat" to be true. Then again, for anyone who's ever dealt over the phone with a mega-corporation such as a credit card company, this will ring all too true. So, decide for yourself:

Be sure & cancel your credit cards before you die.

A lady died this past January, and Citibank billed her for February & March for their annual service charges on her credit card, and then added late fees & interest on the monthly charge.

The balance had been $0.00, now it's somewhere around $60.00. A family member placed a call to Citibank:

Family Member: "I'm calling to tell you that she died in January."

Citibank: "The account was never closed and the late fees & charges still apply."

Family Member: "Maybe you should turn it over to collections."

Citibank: "Since it is two months past due, it already has been."

Family Member: So, what will they do when they find out she is dead?"

Citibank: "Either report her account to the frauds division or report her to the credit bureau; maybe both!"

Family Member: "Do you think God will be mad at her?"

Citibank: "Excuse me?"

Family Member: "Did you just get what I was telling you . . . the part about her being dead?"

Citibank: "Sir, you'll have to speak to my supervisor" Supervisor gets on the phone.

Family Member: "I'm calling to tell you, she died in January."

Citibank: "The account was never closed and the late fees & charges still apply."

Family Member: "You mean you want to collect from her estate?"

Citibank: (Stammer) "Are you her lawyer?"

Family Member: "No, I'm her great nephew." (Lawyer info given)

Citibank: "Could you fax us a certificate of death?"

Family Member: "Sure." (the fax number is given) After they get the fax ...

Citibank: "Our system just isn't setup for death. I don't know what more I can do to help."

Family Member: "Well, if you figure it out, great! If not, you could just keep billing her. I don't think she will care."

Citibank: "Well, the late fees & charges do still apply."

Family Member: "Would you like her new billing address?"

Citibank: "That might help."

Family Member: "Odessa Memorial Cemetery, Highway 129, Plot Number 69."

Citibank: "Sir, that's a cemetery!"

Family Member: "What do you do with dead people on your planet?"

I keep rooting for banks, but so far, not so good....

We've found a five-star bank: Middlesex Savings, in the Metro West area of Greater Boston. We will present them with their Coine Award this fall.

We're researching Commerce Bank right now. So far, so good. Sadly for the Coines, the nearest branch to Naples is across Alligator Alley, about 90 minutes from here.

After these two, Wachovia is head-and-shoulders above all the rest. They missed a Coine Award by inches in 2006, and haven't really blown us away enough to be reconsidered this year. But they're very good, especially for a bank.

So not all banks stink. Just almost all.

Jane and I, our companies, and our foundation have accounts with 6 different banks. That may seem like a lot to you, but we're second-generation Depression survivors, and this makes us feel more comfortable at night.

Suffice it to say, we've had some experience with banking.

So here's one that kills me: in one bank that we use in Naples, if you ask the teller to make your deposit funds available right away, she will; doesn't matter what bank it's drawn off of. Maybe it's because we're good customers, maybe this is just their blanket policy. I don't know.

However, if you don't ask, they won't do it. What's that about? They'll give you terrific service - they can do it, they're happy to do it. But only if you ask them to. Otherwise, they'll give you lame service, just like most banks.

Service is your differentiator in a mature industry such as banking. That means that all banks are the same, except in this one area.

A lesson to take from this:

If you have a service practice that sets you apart, use it consistently!

This one lesson will make you rich. I kid you not. Ignore it at your peril.