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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.
*Execution!

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 01/03/07.

Comments

Tom, bravo on your recognition of Commerce Bank - who I believe have single handedly revived retail banking. I've been banking with them for about 5 years and can't say enough good things about them. As Tom said, they are always open and call themselves America's Most Convenient Bank, a perfectly fitting slogan. I like them so much that I recommend them to almost everyone - I actually hold back my recommendation for a few people I know who are real pains in the ass because I like Commerce so much I want to spare them from having to deal with them.

As a New Yorker I have seen the big players (like Wells Fargo) try to emulate them, but they fall short because at Commerce customer service is in their damn DNA, and while that can be imitated, it can't be cloned. Those of you who don't bank at Commerce owe them a thanks for re-imagining retail banking, which will benefit customers of all banks.

Posted by Adam at January 3, 2007 3:56 PM

"remind me to tell you about the Red "no stupid rules" button on every computer terminal"...so--are you going to tell us about it?

Posted by david foster at January 3, 2007 5:00 PM

If Commerce will expand into Massachusetts I promise I'll switch banks and stop whining on this website about my current bank!

Posted by John O'Leary at January 3, 2007 5:36 PM

Do we have companies that are not in the Industrial Era?

http://blog.amusecorp.com/index.html/61

Posted by Vasu Srinivasan at January 4, 2007 12:30 AM

Tom

My top three MVP for 2006 are:

Google for its unrelenting commitment to "free search", innovative business models, use of digital technologies, and new ideas.

Skype for it unrelenting commitment to "free communicaitons", innovative business models, digital technologies, and new ideas.

Firefox for it unrelenting commitment to "a free web browser", open source technology, new business models, innovation, new ideas, and improving social cohesion on the World Wide Web.

I choose them because people all over the globe use the products and services of these three companies 24/7...

Each of them could be a good example of the type of C21st "virtual or networked business" that you and Robert Waterman may well have sought out (to examine in detail) if you two had been researching, writing, or publishing "In Search....." for readers in 2006.

Cheers
Richard.

Posted by Richard Lipscombe at January 4, 2007 6:20 AM

Richard, I of course agree with you. (Silicon Valley for 30 years, remember--even once on a list of "100 most powerful ... in the Valley.) But I chose for this selection a different route. The fact is that today and 10 years from today most of us--from hither to thither--will be working in other than Google-like settings. Hence my choice of the likes of Jim's Group. There is hope for "the rest of us"--and seriously cool companies providing services of great value and appreciation of good work do indeed exist outside the tech-biotech sector. And are indeed role models of Excellence.

Posted by tom peters at January 4, 2007 6:35 AM

Tom,

Great selection, thanks for the inspiration! To echo David, please tell us about the Red "no stupid rules" button on every computer terminal!

Posted by Stephen Spencer at January 4, 2007 7:04 AM

Thanks for MVP's Tom & Richard.

2.007 is radically exciting - especially given free enterprise success worldwide [generally in '06] ... '07 Chindia-Energy-Commodity-Real Estate Invest

1. Seems like BrandYou [vs "Companies] may be 2.007 focus like never before - more & more independent wealth types inhaling the latest & best to max advantage

2. The late great & weird career of G.R. Ford as example - $265K net worth when selected vice president - estate now of $20M+ ... selected never elected to VP & president - 800+ only total days in office - defeated in election - then maxed the BrandYou deal for a fabulous USA-International lifestyle

3. And like Mr. Reagan - lived 93+ years - must be something in the California water where they "retired"?! Lovely healthfulness 2.007 1st & last for this Brand

Posted by sean_MVP at January 4, 2007 9:34 AM

The local Commerce bank branches are the most attractive commerical buildings in Northern Virginia. At night they are lit up like a Christmas tree and look like anything but a bank.
And today Wachovia had to reverse a $50 service charge they accidentally charged my account. Again.
I would rather switch then fight.

Posted by Bruce D at January 4, 2007 12:43 PM

Tom

Happy New Year...

I guess my "real" point is that for most people the "gap" between what is available at home and at work is VAST!!! I hope I am not stretching the point to say that even villagers in India have more and greater access to contemporary thinking, technologies, ideas, etc at home than at work.

In an affluent society the things one can do at home - email, blog, communicate with images, publish, create yourself a "virtual" identity, etc. will never be matched by Jim Penman (Jim's Group) in his franchised business. No bank - and I have them as clients - comes within a bull's roar of being "up to date".

There is a huge gap (Gartner Research suggests it is growing larger not shrinking) between how people live (at home) and how they work (in their pedestrian workspaces).

It seems to me that "the wonderful new world of work" needs a huge kick in the backside and it should be swift.

I imagine your role is to motivate people to find their full potential at work... My role is to help people, if and where I can, to live their life each day (at home and at work) to its fullest....

Thanks for your comment and your time....

Stay well and have fun!

Richard.

Posted by Richard Lipscombe at January 4, 2007 4:42 PM

1. Bruce - agree on Northern Virginia & Commerce Bank - AND NV is so beautiful PLUS so NEW - so many fabulous environs

2. Richard - have for years identified with the Home vs. Career Dilemma - amazing how cool & efficient the Home lifestyle can/has become vs. the sheer chaos [& out of control environ] most of us endure in Career-life!

3. Example - co-worker with chronic cough refuses to stay home & remedy it - NOW this jerk must be directed [takes weeks to do this] to stay home on her own time if need be ... meanwhile too much spraying of her disease in airspace - thanks a lot!

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Posted by sean_fun at January 5, 2007 9:28 AM