Why Not to Cut Training and Development Dollars

July 1, 2000
The Men's Wearhouse believes in promotion from within, and almost all of the senior executives have been with the company a long time and worked their way up.

Four members of the senior management team have been with the company since it started, and several others have tenures of 10 to 15 years. Ted Biele, the senior vice president of store operations, started as a wardrobe consultant. Julie Aguirre, the director of employee relations, is under 30 and started as a cashier. Because of the company's rapid growth, there have been many opportunities for wardrobe consultants to move into store management positions.

Development and training are important to the Men's Wearhouse. This emphasis is even reflected in the company's organizational structure. Charlie Bresler has commented that most retail companies have only one layer of multi-unit managers, but they have two. "One of the reasons is that our district managers are sales trainers on an ongoing basis for our wardrobe consultants....(They're) also management trainers."

The extra multi-unit managers help provide training and coaching. Management development occurs mostly by observing others and being coached by more senior managers.

Training and off-site meetings are important ways for building and transmitting the culture that provides the Men's Wearhouse with its competitive advantage. The company uses virtually no outside training or outsiders to do its training, and has very little specialized training staff internally.

Instead, the training is done almost exclusively by line managers and senior executives. The model is one of cascading down the hierarchy, with the people at each level having responsibility for the development of those below them.

The company has a number of formal meetings through the year, often at Saguaro Dunes, a resort on Monterey Bay near San Francisco, which many senior leaders consider to be the spiritual home of the Men's Wearhouse.

The company almost doesn't have a training budget--it spends whatever senior leaders think is necessary to keep the culture vital and people energized.

In February, there is a meeting of all the multi-unit managers in store operations, regional managers of tailoring, the managers of the sales associates, all of the managers in merchandising, and all of the buyers as well as the senior executives in store operations. "We have a three-day combination of training, spiritual renewal, parties, lots of sports, lots of drinking, lots of dancing. It's kind of a wild three days with a lot of training thrown in," Charlie Bresler explained.

Bresler described the other components of the training meeting schedule:

"Shortly after February, our Suits University calendar starts up and we bring wardrobe consultants from all over the country to Fremont (California). The primary emphasis is on sales training and a socialization experience into our culture. A lot of key executives...address that group.

"Then, in the markets, we have two other meetings that go on throughout the year. One is called Suits High, which is preparation to come to Fremont and Suits University. It is an introduction to selling. And the other is called Sales Associate University, which is basically a training session for our cashiers. They get training in the store but they also get training in this group meeting.

"And then every summer, we have manager meetings. These are meetings that take place in the markets. This coming year we'll have five different locations. And we fly people to the nearest location. About two years ago, George came up with the idea of adding all the wardrobe consultants to the meeting. So we now have every manager, every assistant manager, and every wardrobe consultant in the company going to a summer meeting...

"In September, we have another multi-unit manager meeting where all of our district and regional managers and store operations executives get together again at Pajaro Dunes.... And we have another meeting to get ready for the fourth quarter, with more training.... A major part of our training program takes place with our district managers who are the primary sales trainers. These people have between 6 to 12 stores."

The company almost doesn't have a training budget--it spends whatever senior leaders think is necessary to keep the culture vital and people energized. There is, of course, ongoing pressure to justify and to cut training expenditures, but Zimmer has stood firm on this issue. He described one example:

"Every year my closest friends, Charlie and the rest of the senior people in our company, say to me, 'George, this business of flying the managers and the assistant Monterey Bay for three nights in this Ajar Dunes resort environment'...I think it actually costs in the vicinity of three-quarters of a million dollars. And so the president of our company, who's a good friend of mine and a former partner at Deloitte and Touche, and even [Charlie Bresler] said, 'I don't know why we continue to do this.'

"And my response, and this is where you have to sort of be strong as the CEO, is: 'I'm not really sure what we're going to talk about either. That's your job, to make sure it's quality....I'm going to tell you that this is the best money we spend.'...I know it's very expensive and hard to create a cost-benefit analysis."

In addition to imparting selling skills and a lot of product and market knowledge, all of these meetings and training do one other important thing: They signal to people that the company takes them seriously.

If the Men's Wearhouse invests in you, you, under the norm of reciprocity, will feel some obligation to the company--to stay, to work hard, and to be loyal. Moreover, for people who have typically been treated poorly in the retail environment, all of this training raises their self-esteem and self-image.

Feeling better about themselves, with higher expectations and beliefs about their own potential and capabilities and with the title of "consultant," employees leave the training energized and committed to doing a great job.

This article was reprinted with permission of Harvard Business School Press. Excerpt of Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People by Charles A. O'Reilly III and Jeffrey Pfeffer. Copyright 2000 President and fellows of Harvard College; All Rights Reserved.