increasingly competitive world. There is no free lunch. Period. If you want
to survive, you’ve got to hustle. I suppose that first class organizations like
Nordstrom do “use you up” in a way. That’s true of Japanese companies
that we read about like Toyota and Honda. It’s true of Intel, it’s true of
Federal Express, it’s true of Goldman Sacks. But most American companies
are staffed by people who punch the clock, put in their hours and don’t
really try that hard. That’s been the story in manufacturing where US com-
panies keep losing ground. Many thought we were immune from global
competition in retailing. But all it takes is one Nordstrom that offers a huge
improvement in service quality and the game is changed. The competitors
fall all over themselves in a scramble to merge and all they did was dig a
deeper hole, and haven’t been able to make the mergers work and pay off
the debt. They bet on efficiency and size that the customer never sees nor
gives a damn about. Banking is like this today. Big mergers, lousy service.
The customer is conditioned to a low standard until someone else figures
out how to really do it right. Then the customers, especially the affluent
ones, jump ship. But it takes relentless effort and day-to-day discipline to
pull this off. Most American companies lack this. Many took pleasure
when Nordstrom got the bad press because it reaffirmed “their way is
better”.’^36
Another employee states: ‘Winning customer loyalty spurs relentless
improvement. Some burn out. Others may find it exploitative. But remain-
ing a winner today demands that price – not just of companies but of the
individuals who work for them.’^37
Nordstrom’s turnover is 50–60 per cent per year – about typical for the
industry. These figures include seasonal hirings. Turnover among perma-
nent staff is 15–20 per cent per year, slightly better than the industry
average. Half of those exits are employee initiated, and are mostly due to
family related matters. The balance of approximately 7–10 per cent of
annual turnover is company initiated.^38
When confronted by reporter Morley Safer during a 60 Minutesinter-
view, Bruce Nordstrom summarized Nordstrom management’s beliefs:^39
The system is to have self-empowered people who have an entrepreneurial
spirit, who feel that they’re in this to better themselves and to feel good
about themselves and to make more money and to be successful. That’s the
system. [We have] expectations of our people. When people apply for a job
any place, they want to work hard and they want to do a good job. That’s
their intention. And our intention is to allow them the freedom to work as
hard as they want to work.The recruitment and internal market domains 399