Bruce Giffen is another Nordstrom fan, and he’s had the privilege of an insider’s view. “John and Sally Nordstrom were clients of ours,” says Giffen, whose company is based in Santa Barbara, Calif. “I took John out to lunch—Nordstrom was in a huge growth mode at the time—and asked, ‘How do you train your employees to act like they do?’ He said, ‘We don’t. We don’t have much of a training budget. We let their parents do it for us.’” Nordstrom explained that his personnel teams screened applicants in groups of 50, with one recruiter talking about the company’s values and two others simply observing applicants’ body language. They were looking, he said, for those who indicated that they already shared those values. “I guess this was back a dozen years,” Giffen says, but the conversation stayed with him. Now, when his company interviews prospective employees, “We just try to get inside their heads and see if they have the values there, recognizing that you can’t put into somebody something that they don’t already own.” Getting some of those Nordstrom values into his company wouldn’t be a bad thing either, Giffen says. “We have a lot of the same clientele as Nordstrom. The difference is, they walk out of the store after an hour, and we live with them for 16 months.”
Wayne, Pa., custom builder Chip Vaughan has a knack for seeing business lessons nearly everywhere. “I do look at a lot of different companies,” he says, “because we’re in a lot of businesses. We drill for oil and sell the gas to the customer. We’re very vertically integrated.” Because he competes directly with mega-builder Toll Brothers, though, he pays particularly close attention to how national firms create and project an image. “Whenever I’m buying anything, I think about why I’m buying it,” says Vaughan, who rates Ralph Lauren Polo among the best national marketers, “companies that really understand what ads do and what brands are.”
But success is not always the best teacher. “You could look at companies that you don’t want to follow,” Vaughan says, “IBM and the American carmakers [for example].” Both forfeited preeminence in their industries, “Because they took the attitude of ‘If you build it they will come,’” ignoring changes in customer preferences and continuing to build what they had always built. The dominant player at the dawn of the PC era, IBM saw lower-price competitors carve up its market, lost millions, and got out of the PC business entirely in 2004. As for American carmakers, Vaughan says, “They still don’t really get it. It’s taken them 20 years to understand that you can’t compete the way you competed 20 years ago.” Spurred by these negative examples, Vaughn takes the opposite approach, striving “to be the first in the market doing something no one else is doing.” After a visit to Monticello, for example, he drew a new floor plan that, like Thomas Jefferson’s home, has no prominent central stair. More innovations will follow, promises Vaughan, who has resolved, among other things, “not to rest on my laurels in terms of design.”
In custom building, as in any business, wisdom is where you find it.
