Furniture Retail Success Stories Part 17: Crest Furniture

“As for the best leaders,
The people do not notice
Their existence.
The next best, the people
Honour and praise. The next,
The people fear. And the next,
The people hate. When the best
Leader’s work is done, the people say,
‘We did it ourselves.’” - Lau-Tzu

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Simon Kaplan began life in New Jersey, 1924, son of strong, determined parents, both immigrants, his father from Russia, his mother, Poland. A World War II combat veteran at a very early age, he fought “from Belgium into Holland”, and in the Battle of the Bulge where a mortar shell caught up with him. He returned to New Jersey at the conclusion of hostilities and graduated from New Jersey Institute of Technology as an engineer. “But by mistake I got into the furniture business. I couldn’t get a job in engineering so I joined my father in retail. We were discouraged by the riots in Newark, so we sold up and moved to Bayonne.”

Simon’s military service had a profound effect in forming the core values, honour, loyalty, truthfulness, commitment and dedication, that have shaped his life and his career. “That period changed my entire life. It was a short time, but it was a lifetime. We lost so many men; it made life that much more important. On a wall in my office there is a plaque commemorating ‘The Band of Brothers’, the 506th Parachute Infantry Regiment, 101st Airborne Division. Those men, the Band of Brothers, did not give up; they held out against the enemy.” (Both a book by historian and biographer, Stephen Ambrose, and a television mini-series, record the Regiment’s extraordinary service).

“Major Dick Winters, Commander and Leader of the Regiment, wrote his memoirs, ‘Beyond Band of Brothers’, and in it he listed his ‘10 Principles for Success, Leadership at the Point of the Bayonet’. He says, ‘Remain humble. Don’t worry about who receives the credit. Never let power or authority go to your head.’ You can’t let ego stand in the way of decision. Winters and Edwards Deming helped to structure my thoughts.” And, earlier on, Simon had also placed value on Peter Drucker’s seminal work.

By Major Richard “Dick” Winters, Commander and Leader of WWII 506th Parachute Infantry Regiment, 101st Airborne Division.  Strive to be a leader of character, competence and courage.     Lead from the front. Say, “Follow me!” and then lead the way.    Stay in top physical shape – physical stamina is the root of mental toughness.    Develop your team. If you know your people, are fair in setting realistic goals and expectations, and lead by example, you will develop teamwork.    Delegate responsibility to your subordinates and let them do their job. You can’t do a good job if you don’t have a chance to use your imagination and creativity.    Anticipate problems and prepare to overcome obstacles. Don’t wait until you get to the top of the ridge and then make up your mind.     Remain humble. Don’t worry about who receives the credit. Never let power or authority go to your head.     Take a moment of self-reflection. Look at yourself in the mirror every night and ask yourself if you did your best.     True satisfaction comes from getting the job done. The key to a successful leader is to earn respect – not because of rank or position, but because you are a leader of character.     Hang tough! Never, ever, give up.

He first encountered Edwards Deming’s concepts in the 1990s during a conversation with Jim Mcingvale of Gallery Furniture. “It was in August that Mac told me about Deming, and that he was offering a series of seminars. I phoned the number he gave me and the woman who answered told me the next lecture was scheduled for September in Charlotte, North Carolina. But, unfortunately, registration was full. I asked about the next date when there might be a space for me; it was December 15th in San Jose, California! (Remember, my business is in New Jersey!) They sent me Deming’s book, “Out of the Crisis”, and a workbook, and I carried them with me on the ‘plane.

“The lecture took place in a large ballroom set up with huge screens. Deming (he was about 80 years old at the time) appeared, walked to the podium and said, ‘Open the book to page whatever’, and then he began to read! As he started I said to myself, ‘This is the busiest time of the year and here I am in California listening to this old man read!’ But he talked about the 14 Points for Management , and that it’s not a cookie-cutter. It’s how you perceive the rules, how they can apply to your own business, how to utilize them. It was a defining moment! He didn’t tell me what to do, what to think about or how it ends up. To this day every time I make a decision I reflect, ‘Which point is applicable?’ He said there was one goal in life and that is continuous improvement. It was an initial turning point.

“I flew back to New Jersey and we got into analyzing the 14 Points, adjusting the culture around our own business, making our own decisions relative to building the company. As time went on, we started to develop the people internally. Things slowly changed in interpretation but the basic principles still apply.”

Create constancy of purpose for the improvement of product and service.     Adopt the new philosophy.     Cease dependence on mass inspection.     End the practice of awarding business on the basis of price tag alone.     Improve constantly and forever the system of production and service.     Institute training and retraining.     Institute leadership.     Drive out fear so that everyone may work effectively.     Break down barriers between staff areas.     Eliminate slogans, exhortations and targets for the work force.     Eliminate numerical quotas.     Remove barriers to pride of workmanship.    Institute a vigorous program of education and self-improvement.       14. Take action to accomplish the transformation.

Prior to his remarkable encounter with Deming, Simon Kaplan had already founded Crest Furniture Inc. D/B/A/Value City Furniture back in 1971. Now, with seven retail locations, Value City is “the fastest growing home furnishings company in New Jersey”, together with Crest Furniture’s seven Ashley Home Stores.

Simon also played an active role in the formation of the Furniture Marketing Group and served as co-president, later president. FMG has grown in membership, and has become one of the largest volume furniture-buying cooperatives in the U.S.

Deming’s wisdom inspired Simon to prepare a brochure based on his teaching entitled, “Value City Corporate Culture”. On the front cover the question is asked, “What business are we in”, and the corporate motto is featured, “Building Solutions for Customers by Working Together”. Potential new employees attend a meeting with Simon to discuss the organization’s core principles. Once hired, they are given a copy of the Corporate Culture booklet and must agree to adhere to its expressed principles.

Contents of the brochure include Simon’s interpretation of “Deming’s 14 Points” and a clear and in-depth definition of each of the 14 Points; a description of what it takes to be a Value City Furniture Retail Executive (attitude/performance/skills); “The Art of Getting Along” and the last, and vital page, “CANI --- Constant and Never-Ending Improvement”.

CANI Constant And Never-Ending Improvement. From the Value City Corporate Culture booklet. As leaders of our organization - commit to CANI !    We need to be constantly driving improvements every day - not only to ourselves, but also to our employees and processes.    Each day, our improvements do not need to be extraordinary. - strive to end each day a little better than the day before.     For changes to be of true value, they have to be lasting and consistent.    And finally, work and live with passion!

Simon sees himself as, “A cheerleader, a mentor”, and he gives his people a real chance to grow from within. “These policies have been more successful than I ever dreamed. Understanding that to grow you must help people to develop is a long process, plus understanding that change has to come from you as well. In the beginning, you think you have to micro-manage, but you have to give it up and learn to lead. You must begin at the beginning, start to hire people, start to get a little bigger, recognizing you must have outside help. No one person is that smart. ‘No man is an island’! This is life, as relative to retail as it is to yourself, understanding that people have to seize opportunity to make change. When you’ve adopted this principle and you begin to make progress, you also begin to get the best from each individual.

The Art Of Getting Along From the Value City Corporate Culture booklet. Sooner or later a man if he is wise, discovers that life is a mixture of good days and bad, victory and defeat, give and take.     He learns  that it doesn’t pay to be too sensitive a soul: that he should let some things go over his head like water off a duck’s back.       He learns that he who loses his temper usually loses out.      He learns that all men have burnt toast for breakfast now and then, and that he shouldn’t take the other fellow’s grouch too seriously.     He learns that carrying a chip on his shoulder is the easiest way to get into a fight.     He learns that the quickest way to become unpopular is to carry tales and gossip about others.     He learnsthat buck-passing always turns out to be a boomerang, and it never pays.     He comes to realize that the business could run perfectly well without him.     He learns that it doesn’t matter so much who gets the credit as long as the business benefits.     He learns that even a janitor is human and that it does no harm to say “Good evening!” even if it is raining. He learns that most of the other fellows are as ambitious as he, that they have brains as good or better, and that hard work, not cleverness, is the secret of success.      He learns to sympathize with the youngster coming into the business, because he remembers how bewildered he was when he first started out.     He learns not to worry when he loses an order, because experience has shown that if he always gives his best, his average will break pretty well.     He learns that no man ever got to first base alone and that it is only through cooperative effort that we move on to better things.     He learns that bosses are not monsters, trying to get the last ounce of work out of him, but that they are usually pretty good fellows who have succeeded through hard work and who want to do the right thing.     He learns that folks are not any harder to get along with in one place than in another, and that “Getting Along” depends about ninety-eight percent on his own behavior.

“There are three factors in a business, the customer, the employee and the system under which the employee works. If you enhance the system you do better for the employee and then the customer. And remember that 80 per cent of everything that happens is due to system not the employees. If the employee cannot work the system, don’t chastise the employee, until you look at the system first.
Said Simon, “If you give someone direction they will forget. But if you put it in the form of a story, they will remember what you say. I always try to tell a story.”

“We hold meetings with our drivers, the majority of whom are Spanish. I understood that one of them was grumbling, he wanted to make more money. I told him, ‘I want to double your salary!’ He asked, ‘Are you going to pay us more for deliveries?’ I said, ‘I’m going to show you how to double your salary. You already do what is necessary to meet the customers’ expectations, delivery on time, etc. You have to EXCEED the customers’ expectations, by doing something unique! I told him to come back next week and tell me his story. The following week he raised his hand and told me this: ‘I came to this customer’s house and she had a long driveway... and the snow was up to my knees. I said to her, I have to make this delivery, so give me a shovel so I can clean your driveway. She gave me a tip. And then she gave me $85 for shoveling her driveway!’

“Running the business is basically effectiveness in how you buy and how you sell.” He chuckled, “Two things can kill you in business, not enough business and too much business! And it’s necessary to know the difference between cash flow and profitability. Without cash flow you can’t operate. Cash flow has to be used for the good of the business --- pay your bills and pay on time. The bottom line, integrity and honesty, you will be known as someone who can be trusted.

“Money is something that should be reinvested in the business for the good of all, to make the business better so people are able to do better. It enhances the business so everything profits from the enhancements.

“And you have to come up with necessary information all along the line so people can change effectively. Time is vital. But you’ve got to be careful; when you make decisions, don’t louse it up! Get the whole picture in front of you because one thing affects another.

“People will sometimes tell you that you are good, and you know that you seem to be getting customers on an ongoing basis. Don’t let it go to your head. That’s just when you’ve got to remember to be competition to yourself. What is competition? Look in the mirror! A professional is a
person who gathers information and makes use of it. You can only get better if you get better, not if your competition gets worse.

“We are obsessed with solving problems immediately, even if there is a cost involved. This concept, by the way, was found in the book, ‘Customers for Life: How to Turn That One-Time Buyer into a Lifetime Customer’, by Carl Sewell.




 “As you know, we experienced a devastating hurricane in New Jersey. A customer came in, carrying her extended warranty from a previous purchase. She said, ‘I want you to give me new furniture to compensate for my loss during the hurricane. I’m going to sue you if you don’t!’ Of course her furniture was not covered by natural causes, and we would have been 100 per cent correct in refusing her demand, but we gave her new furniture. Why? The publicity was worth more than the cost of the furniture. And just think what the legal costs would have been! Now she’ll be a customer for life.”

Simon also spoke about his wife Annett, advertising at Value City and the company’s charitable footprint.

“Annett is a perfectionist with colour, a micro-manager. She is still active in the business and has studied over the years. Annett has the ability to see how colours complement one another, extremely valuable in the retail business.

“Advertising at Value City,” he continued, “is very aggressive. We use everything under the sun from technology to print to radio to television. We don’t sell online. We’re not quite set up for the Internet yet.”

He believes in giving back to the communities where Crest Furniture operates. “It’s very important to make a contribution to the community around you. We give a lot of money, gift certificates, donations and merchandise but internally I take care of my own people, too, if someone comes in with a hard luck story. I gave to the man who does the cleaning in the parking lot. I asked, ‘What’s your problem?’ He said, ‘I have to move and I don’t have the money for the first month’s rent as well as the deposit.’ I gave him the money. People think I’m a little too free. But I can’t drive two cars at once and I’ve lived in the same house for 55 years. Last year I changed my car; it was 13 ½ years old. I must give as much as I get.”

Simon’s war service is even now top of his mind, a daily influence. Many of his Value City executive team are WWII veterans, ”Still working because, like me, they like what they do. It’s a very selfish reason. We are able to contribute, and it’s very important for your ego to contribute! People used to say years ago that if you hadn’t fought in WWII we wouldn’t hire you. But unfortunately it’s a shrinking volume, and continuing to shrink.”

Yet, he doesn’t dwell on the past. Instead he is focused on continually improving the business. “In the last couple of years we’ve undertaken to enter into lean management. We have a person who understands how to oversee problems and work along the same lines as ‘The Toyota Way’ (a Deming-inspired Japanese corporation). This person was promoted from within; we brought in an outside company to teach him how to do it. If you want to play tennis, play with someone better than you!”
He’s been recognized by many associations for his work and his philanthropy, amongst them the Metropolitan Furnishings Association of New Jersey and the FMG for his leadership. He was recently honored by City of Hope, as “Man of the Year” by the Greater New York Home Furnishings Association, and “Greatest Employer Award” from his own team of associates. He participated in a campaign through FMG to raise more than $80,000 to support High Point University, and gave both time and energy to help out the City of Hope.

In 1988, Deming noted that the word “joy” was found twice in the Book of Ecclesiastes as, ”joy in labour”. He had used the phrase “pride in work” previously in his writing. He amended his commentary. It’s plain to see that Simon Kaplan has also found joy in his enterprises.

“It’s about the process, good management, leading, mentoring, growing and improving continuously.”