MVP2006 (Companies)

On 4 December I made a Post about favorite (“excellent”) companies. I want to finish that thought by offering my co-winners of the Most Valuable Companies Award 2006. They are three in number:

Dick Kovacevich, CEO of top performing Wells Fargo Bank, said a couple of years ago: “Analysts preferred cost cutting, as long as they could see two or three years of EPS growth. I preached revenue and the analysts’ eyes would glaze over. Now revenue is ‘in’ because so many got caught, and earnings went to hell. They said, ‘Oh my gosh, you need revenues to grow earnings over time.’ Well, Duh!” Go Dick! I consider myself a died-in-the-wool “top line” guy-fanatic. Hence, my first of three winners for 2006 is a bank, albeit not Wells. Namely … COMMERCE BANK.

They love deposits. They hate stupid rules (remind me to tell you about the Red “no stupid rules” button on every computer terminal). They want people to come into the branch rather than use the ATM or Web. They keep said branches open all the damn time (no exaggeration). They love individuals of modest net worth. They think that when you call them you should speak to a … l-i-v-i-n-g h-u-m-a-n b-e-i-n-g. They love to give out dog biscuits and balloons—and think nothing of taking 8,000 employees to Radio City Music Hall to celebrate a good year.

They think “Wow!” is the coolest word ever (no wonder I love them!!), and that it belongs in banking. They like fun … and I guess they don’t like the Bank of America: “We defy conventional wisdom, operating more like the young bucks at Starbucks than the old farts at the Bank of America.”—Vernon Hill, founder and CEO.

J.D. Power likes them … for example, Commerce recently won a Power award for best customer service for a bank in New York City by placing 1st in 5 of 6 categories and 2nd in the sixth. They are incredibly profitable in hyper-tough East Coast retail banking markets and growing like Topsy.

Hill loves revenue growth (“Our whole story is growing revenue”). And he believes religiously in getting that revenue growth organically (“No great American retailer was ever created by doing acquisitions”); growth-by-acquisition, he insists, is invariably followed by a cost cutting mentality that turns the customer into a second class citizen.

Bingo … on every score.

My paternal grandfather came to Baltimore in the 1870s and became a very successful contractor. Skipping a generation, I got a masters degree at Cornell in construction management. So it has always annoyed me that you never see a contractor on the “bests” lists. Hence, with the greatest pleasure, I name as my second winner … JOHN LAING HOMES. (FYI … there is no meaning to the order.)

The JLH story is in its own way a repeat of Commerce. CEO Larry Webb says: “We don’t ‘close units,’ we build homes.” No big deal, you say. Wrong! The focus by our second largest homebuilder is on the customer, the customer’s family, the customer’s community and values, and the customer’s experience from way before start with JLH to way past finish—not exactly the norm in the “unit-building” world in which John Laing competes. JLH competes on/by design (again, no wonder I love them)—every division in the company, no exceptions, has won top design awards. Professional Builder named them “Builder of the Year” in 2003. And, like Commerce, J.D. Power awards for best customer service cover the walls. And get this: On their home turf, Orange County, CA, JLH is one of the “best places to work” according to the Orange County Register—imagine, I barely can, a builder as best place to work!

Maybe the John Laing story was summed up best in a September 2006 headline in BigBuilder: “Soft Skills, Hard Dollars” Yup, housing is in the tank at the moment—but I confidently predict that JLH will do better than its peers during the downturn and keep rollin’ along.

I love Adelaide! I love a guy who can turn cuttin’ grass and walkin’ dogs into a 2,600-franchise, global business. Hence, I love Jim Penman. He’s the founder and boss of my third MVP winner … JIM’s GROUP. It started with part-time grass cutting by a grad student—and has become a force. We’re all busy as hell, with the 2-worker, 2-professional family virtually the norm. And what a need (“Blue ocean”?) Jim’s Group fulfills. They do all the work you don’t want to do/don’t have time to do—from grass cutting and dog walking to home repairs and driveway care and you name it. Though Jim’s has no J.D. Power awards (there are no JDP awards in Australia or New Zealand or the UK, where the group does its business)—the customer service standards would perhaps intimidate even the Four Seasons. Like Commerce and John Laing, Jim’s Group lives the “people first” strategy-life with an abiding passion—not precisely the norm in the grass mowing industry! And franchisee relations would make most any franchisor drool.

There you have it! I love these three winners! My principal criteria were: “excellence so obvious you’d have to be an idiot not to ‘get it'” and “excellence where you’d least expect it.” And of course, I’m hardly sad that all three sagas are based on: revenue-rules-the-roost, people first, a passion for customers, Wow! … and the relentless and avowed pursuit of excellence. (Oh, and they do indeed make a buck or three or four or six at the end of the day.)

In my 4 December post, I summarized the traits that marked not only these three champions, but my whole group of 20 or so:

*Focused on revenue, organic growth and “offense,” not defense and cost containment.
*People-talent obsession.
*Provide mind-bending experiences. (Driven by design primacy.)
*Nuts about customers.
*Happy to use words like “Wow.”
*Pretty close to the high end of the market.
*Ability to make silk purses filled with gold out of sows’ ears.

Works for me!

(Attached you’ll find a short PowerPoint on the winning trio and a few summary slides from the overall Excellence.2006 presentation.)

Tom Peters posted this on January 3, 2007, in Excellence.
Bookmark and Share