Learning From Helzberg Diamond’s Barnett Helzberg Jnr

What makes a retail business successful? Indeed, how do we measure the success of such a company? Profitability, margins, sales per store? Returns on capital? The number of stores the business operates out of or their geographical presence? Staff retention and company culture? Customer loyalty? You could successfully argue that all of these things and indeed many more comprise the traits that determine their success. But what makes them truly great? What does a business have to do to be so good, so innovative and so successful that it would stand out from thousands of companies and be attractive to someone like Warren Buffett? Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues Q4 2022 hedge fund letters, conferences and more These are the things that concerned Barnett Helzberg when he was contemplating selling his beloved family business - the third generation jewelry chain, Helzberg Diamonds. As he walked the bustling streets of New York City one day, he heard a lady call out, "Hey Warren Buffett!" That was enough to catch Barnett's attention. You see, he was a huge fan of Mr. Buffett and had just attended his third annual Berkshire Hathaway meeting in Omaha. He couldn't resist the opportunity to say hello to his idol. Without missing a beat, Barnett thrust his hand out and introduced himself, "Hello, Mr. Buffett. I'm Barnett Helzberg, of Helzberg Diamonds in Kansas City." In the next 30 seconds, Barnett uttered a few words that would change the course of his family's business forever. "I believe that our company matches your criteria for investment." Buffett's response was simple but brimming with promise. "Send me the information. It will be confidential." With those words, the wheels were set in motion for a deal that would seal Helzberg Diamonds' fate. In 1995, Berkshire Hathaway acquired the highly profitable chain of 143 jewelry stores across 23 states. “A lot of companies in the jewelry business do not get good returns on capital. It’s not an industry where most of the participants are prosperous. It takes unusual sales per square foot compared to competitors to succeed in that, and we have one operation that does that in spades at Borsheims, and then a different type of operation that does it at Helzberg’s. The typical jewelry store operation is not a very good business, but we think we’ve got two good operations,” Warren Buffett said in 1995. Helzberg Diamonds' appeal to Warren Buffett is not hard to fathom. To gain an understanding of what made the company so successful, one need not look far. Barnett Helzberg, the company's former CEO, offers valuable insights in his book, "What I Learned Before I Sold to Warren Buffett - An Entrepreneur's Guide to Developing a Highly Successful Company.” In the book, Helzberg shares the experiences and lessons learned from running a thriving chain of jewelry stores with sales per store nearly twice the industry average. Below are some of my favorite quotes from the book. Selling to Warren Buffett “My dream buyer for the family business all along was Warren Buffett. I knew we could trust him to keep the headquarters in Kansas City, resist changing the company's character, and retain the jobs of all of Helzberg's associates. It might have been simpler to sell to the highest bidder, but that notion seemed as sensible as choosing a brain surgeon based on the lowest price rather than on talent and reputation.” Customer Service “Great service exists - fortunately for entrepreneurs it's a rarity. What an opportunity for the ambitious until super-service becomes commonplace (it never will).” “You can provide outstanding service - and own your customer. It will make everyone’s job more fun. It will build your business. Great entrepreneurs recognise the goal is the total customer experience, not just the quality and price of goods or services purchased or given.” “Exceed your customers’ expectations (under-promise - over-deliver).” “You must jump very quickly on the wrong kind of customer service and promote a three-strikes-and-you’re-out mentality and never accept less than the best in customer treatment from your staff. That must be built in as one of the absolutes of your business culture.” Listen to Your Customers “Listening is a discipline, and not an easy one! When I’m speaking, I’m learning nothing. I’m not always learning even when listening, but I have a better chance.” “The point is listen to your customer, not necessarily yourself, your wife, or your third cousin. We are all victims of our own experience as well as beneficiaries thereof! Your personal biases can dangerously skew your decisions. Judge within the context of your customer’s likes and dislikes.” Loyalty & Complaining Customers “Make building loyalty (long-term customer value,) not just satisfaction, your prime goal.” “Your complaining customers [are] your greatest opportunity.. I firmly believe the best customers you may ever have will be the ones who come to you angry but were disarmed by your willingness to listen and respond sympathetically to their complaints. They leave feeling special because you went out of your way to help resolve their problems. These are customers who return again and again because they know you care about them and want them to be happy… The point is to find every opportunity to show your customers you want to take care of them. Rather than be reluctant about resolving a customer’s problem, do it with joy.” “A recent Wall Street Journal explained the incredible value of making the angry customer happy compared with the value of the loyal customer. The FedEx concept of calculating the lifetime value of loyalty (that is, $20,000 per year X 20 years is a $400,000 customer) dramatically portrays this concept. Be proud of the fact that unhappy customers think enough of you to express their unhappiness. The biggest loss to your business are the customers who never come back to complain about a perceived problem. Instead, they tell all their friends that they’ll ‘never deal with that lousy company again.’ One study I read estimates that one unhappy customer tells 18 other people about a bad experience. What a huge missed opportunity. I much prefer that formerly unhappy customers tell their friends how we fixed their problems.” Obliquity “Please add a couple of challenges to that simplistic perception that profit is the be-all and end-all. It's not. First thing to ask, "Is whatever action we want to take getting us closer to our objective?" Let me say this clearly: The objective of a business is not just to make money. That is the byproduct of a job well done. The theme at Ford one year was "Does it sell cars?" At Helzberg Diamonds that inspired, "Does it sell diamonds?" Second thing to ask, "What is the return on the investment?" Profit, though a simple and quantifiable measure, is far, from the whole answer. End of conversation.” Seek a Niche “[My father] refused to sell a diamond solitaire in an engagement ring that was not ‘perfect,’ that is, internally flawless, with good color, good cut, and absolute clarity. As he struggled for a name for this concept, he picked up a box of baking soda on which he read, ‘This baking soda is certified to be perfect.’ Thus, Helzberg "Certified Perfect" Diamonds.” “If you are in a crowded, competitive market, create your own market, that is, not the diamond market, the perfect diamond market; not the beef market; the angus beef market; not the beer market: the freshest beer market.” “Be different - and better! You need a unique selling proposition.” Focus on the Controllables “When growing up, I was intrigued that my father only concerned himself with those business elements that were controllable. He refused to acknowledge the Depression and did quite well during that period. He was unwilling to talk about recessions or 20-inch snow-falls. He only thought about and talked about those conditions within his control. Dad was a great believer in ‘not sweating the small stuff.’ He taught us to concern ourselves only with those things over which we have control. I thought he was unique in this until I realized this is one of the key common traits of highly successful people. Those folks are never victims; they take what comes and handle the situation. The rest is a waste of time.” Copy Ideas “I was always taught that many, many people were out there developing ideas I could use. I have found that to be true throughout my life. [My] thoughts and ideas have all been borrowed or stolen from many wise people. Think of the world as your garden of marvelous people and ideas with unlimited picking rights for you. Enjoy the flowers!” Mistakes - Learn & Move On “Most entrepreneurs could dwell at length on their mistakes. The reason to look in the rearview mirror is to divine exactly what you learned and how you will prevent a repeat of those particular errors. Self-flagellation is a waste of time and brain power. Unreasonable build up of fear, causing you to turn to stone and not innovate, is even worse. Of course, these are not all of my mistakes - that will take another, far larger book. The positive spin to put on your errors is to see them as learning experiences rather than unproductive errors.” Seek Contrary Opinions “Want to increase your chances of making a great decision? Find someone who disagrees with you. That might sound counterintuitive, but I’ve learned that getting a contrary opinion from a friend, a customer, or an advisory board member can be a way of guiding you to a more rewarding decision.” “Being a boss doesn’t make you right. Just because you make the ultimate decisions doesn’t mean you have all the answers. That sign on the door doesn’t make you smarter than everyone else. It just helps people find you.” “People you work with may think you only want to hear the good things, not what is really going on. You can become desperate for the truth, so value that person who disagrees with you, for that individual is a true asset.” Humility & Hiring “Arrogance is counterproductive because arrogant people tend not to listen to and learn from others. Arrogant people are a tremendous turnoff to folks who work with them, cutting off real communication. Most of us know so little about the world, no matter how deeply we know about one small part of it, that we really don't have the right to be arrogant.” “I love the thought that god gave us Mozart to keep us all humble. I’ve been blessed with many opportunities to remain humble and I do believe being the dumbest guy in the room can be the smartest thing you can do as a leader.” “I’ve never kidded myself. Our business really began to perk when I hired people smarter than me. Often, all I had to do was get out of their way. When you find these great people, they make your dreams come true, and then they go beyond your dreams. If you don’t care who gets credit, you can get anything done.” “Nearly every entrepreneur can tell stories of holding on to people too long.” “I learned from my mentors always to look for character, values and people skills. Hire someone who is not only a good fit for the job but, equally important, a good fit for the company culture.” “If you don’t have the right people in the right positions, you have neglected your duty and harmed the company.” “Have several people interview job applicants, so you can get other people's opinions. If possible, have the applicant visit the workplace for a day, so each of you can get a better feel for each other, the job, and the culture. Don't be hurried, and don't succumb to pressure.” “Surrounding yourself with dwarfs does not make you a giant.’ - Yiddish Folk saying.” Share Profits “Profits are important, sharing them is important.” “At Helzberg Diamonds, we had a tradition of increasing individual earnings as much as 17 percent in the form of 10 percent profit sharing, 5 percent in a check called ‘progress sharing,’ and 2 percent immediately vested funds with their match in IRA’s. Lots of dollars went into other rewards such as awards, recognitions, and celebration as well! Devise your own system, but be very careful. Remember that change can be considered a take-away and take-aways are not fun, so go slowly. Try temporary systems, and don’t paint yourself into a corner (remember, a privilege quickly becomes a right).” Value & Empower Employees “Treat people as you want to be treated.” “When people feel valued and see their efforts and ideas count for something, they will strive for peak performance.” “Great teachers understand the power of positive reinforcement to increase desired behaviors, and so do great entrepreneurs and managers.” “If you are good to your company associates, you’re associates will be good to your company.” “We gave careful attention to the people who were at the front lines. The top 25 sales associates each month received a small gift with a handwritten personal note from me.” “One day after about 30 years of experience, another instant flash of the obvious; I suddenly realized that numero uno was not the customer but our own associates; everything literally emanated from them. They were the key to the success of the company - without question. That means you treat each with respect and you celebrate and glorify the success of the leaders in performance.” “Our honoring the top sales producers knew no bounds.” “The old song that says, ‘You gotta love 'em in the A.M., love 'em in the P.M.’ always comes to mind when I think about Helzberg associates.” “People who perform a job every day are just as much experts, and often more so, than consultants who live hundreds of miles away. Engage them in coming up with ways to improve productivity of your business, using some of their ideas will commit them to the task much more readily than if you just tell them what to do. Yes, there are diamonds buried in your own backyard! By asking for the opinions of associates, you immediately dignify the jobs they do, enhance their self-esteem, and increase their effectiveness.” “If you believe in people, you will on occasion, depending on the risk and the reward, willingly allow them to fail. If someone else's idea isn't as good as yours, but it's still okay, you're often better off allowing it done his or her way. Quality of execution is far more important than the idea.” “Motivation and execution will tend to be far better if the individual applies his or her own ideas to the challenge. This concept of ownership is the one that can ignite the spark in your associates, get the job done better than you can expect, and reward them with the joy of accomplishment. It also may be the toughest for many entrepreneurs to embrace.” “Pure psychological ownership can fire up enthusiasm and leadership qualities in those around you. It will point you to future leaders. This concept says, ‘I trust you, I believe in you,’ and it can motivate the living hell out of people. Ownership is key to success.” “In order to succeed in an increasingly complex business world, entrepreneurs need the talents of everyone in the organisation. Believe in the abilities of others and let them grow and perform at their best. Helping others harvest their triumphs will allow you to achieve more success than you could hope for by insisting everything be done your way.” Transparency “One lesson I learned from my associates was that the more open management could be with the team members of the business, the more appreciation there was of the company and the more psychological ownership it gave others.” People “I had been taught from day one by my dad that ‘Business is People.’” “At the end of the day, we found that our key success factor was people. We believed in our people. We felt they knew how to operate a store better than anyone in the business, so we decreased the risks inherent in reaching into a new market by transferring in proven managers and associates from successful stores.” Win-Win “A conscious decision should be made regarding treatment of suppliers. Your team should get together periodically to review your care and feeding program and its effectiveness.” Tone from the Top “There is a perception that if the boss does it, it is acceptable! Whatever you do, you are teaching. That is a great plus; it can also be a great minus if you don’t keep it in mind and conduct yourself as you expect others to.” “Everything you do communicates! You always set an example whether or not you want to!” Ideas “A new idea is delicate. It can be killed by a sneer or a yawn; it can be stabbed to death by a quip and worried to death by a frown on the right man’s brow.” “The courage to ask questions is an attribute. Don't be afraid to ask people more experienced than you for their help. They'll be complimented… The more people you talk to, the greater the brew of ideas you will have to marinate your brain… Even new inventions build on creative ideas that someone thought about before… You are heir to the discoveries of many entrepreneurs who skinned their shins trying something new.” “Attend industry seminars, subscribe to trade publications. The acronym MBWA (management by walking around) is an apt description of another important method you should be using to monitor your industry. Don't scorn competitors and do have open eyes, open ears, and an open mind.” Focus “Focus is your lever to success. As the leader you need to be sure you and your team are doing the right things, and as managers they need to be doing things right… Anything that decreases focus on these right things inhibits progress. Investing unlimited effort in failing projects does not create success.” “Among our happiest and best decisions were throwing out the dead merchandise horses and finding that the success of the company increased proportionately. We eliminated china, crystal, all flatware, luggage, radios, small appliances, and other non-jewellery items - ad infinitum and ad nauseum. The practice of optometry in a few stores ended. We found the less we sold, the better we sold what was left: fine jewelry. The time to give up on peripheral items had come; we were early in the game of giving them up. The company gained great focus and, doing fewer things, became far more successful.” Cut Marginal Stores “When you are operating a group of retail stores, there is always the usual bell curve of weak to great performing stores. Much conventional practice dictates committing great effort to the weakest segment. When I discussed this with my friend Steve Lieberman, the hotdog magnate who ran hundreds of Carousel Snack Bars in shopping centres for many years, he said, ‘You make more money closing bad stores than opening new ones.’ His philosophy made sense.. Our attitude became to upgrade the herd annually, closing the weakest stores each year.” “Each activity you undertake exacts the price of not being able to pursue alternate activities. You are investing the time and talents of your associates.” “Because of their semi-permanency and their unlimited parasitic appetite, underperforming operations destroy the good people you send there for turnaround while simultaneously depriving those great managers and great teammates of an exciting opportunity as well as putting capital to non-productive uses. Management’s challenge is to take advantage of the unlimited opportunity to focus the talents on its most talented people on winners. Riding the winners to success was what created the large average sales volume of Helzberg Diamonds stores.” “Certainly one of the most profitable things ever done in our company was the consistent closing of marginal stores that destroyed human resources (who can be motivated in a weak store with the label of ‘poor store’ on it?), used capital, drained central office focus, and really had no reason for being. What a waste of good teammates. A modest turnaround is not nearly as profitable as sending great people to good stores to build them to great so sending the not-so-strong manager to do the impossible makes even less sense. Cut those cancers out as fast as you can. You will not believe how your profits benefit.” Pricing “When possible and practical, prices should be raised in very minute amounts over a long period, even if the need for an increase does not exist at a given time. Your customers will be far happier with the price if you avoid a major surprise and shock.” Performance Standards & Internal Competition “Setting clear standards of performance tells people what the goals are. Standards allow us to measure our performances and they tell us how far we've come and how far we have to go to reach our destination. They are essential to a successful business. At Helzberg Diamonds we gave a lot of thought to performance standards. We found that.. [Image] Here are Some More Investing Tips and Resources. Enjoy! Sponsored [How He Bagged One Of The Top Trading Records…]( A reclusive millionaire has been quietly racking up winning trade after winning trade. Despite avoiding most headlines, he’s become one of the most successful traders around - over the last 8 years, he’s banked a 97% win rate. How does he do it? He sat down for a rare interview where he revealed it all. [Click HERE to see how he’s done it…]( [Privacy Policy/Disclosures]( [Learning From Helzberg Diamond’s Barnett Helzberg Jnr]( What makes a retail business successful? Indeed, how do we measure the success of such a company? Profitability, margins, sales per store? Returns on capital? The number of stores the business operates out of or their geographical presence? Staff retention and company culture? Customer loyalty? You could successfully argue that all of these things and indeed many more comprise the traits that determine their success. But what makes them truly great? What does a business have to do to be so good, so innovative and so successful that it would stand out from thousands of companies and be attractive to someone like Warren Buffett? Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues Q4 2022 hedge fund letters, conferences and more These are the things that concerned Barnett Helzberg when he was contemplating selling his beloved family business - the third generation jewelry chain, Helzberg Diamonds. As he walked the bustling streets of New York City one day, he heard a lady call out, "Hey Warren Buffett!" That was enough to catch Barnett's attention. You see, he was a huge fan of Mr. Buffett and had just attended his third annual Berkshire Hathaway meeting in Omaha. He couldn't resist the opportunity to say hello to his idol. Without missing a beat, Barnett thrust his hand out and introduced himself, "Hello, Mr. Buffett. I'm Barnett Helzberg, of Helzberg Diamonds in Kansas City." In the next 30 seconds, Barnett uttered a few words that would change the course of his family's business forever. "I believe that our company matches your criteria for investment." Buffett's response was simple but brimming with promise. "Send me the information. It will be confidential." With those words, the wheels were set in motion for a deal that would seal Helzberg Diamonds' fate. In 1995, Berkshire Hathaway acquired the highly profitable chain of 143 jewelry stores across 23 states. “A lot of companies in the jewelry business do not get good returns on capital. It’s not an industry where most of the participants are prosperous. It takes unusual sales per square foot compared to competitors to succeed in that, and we have one operation that does that in spades at Borsheims, and then a different type of operation that does it at Helzberg’s. The typical jewelry store operation is not a very good business, but we think we’ve got two good operations,” Warren Buffett said in 1995. Helzberg Diamonds' appeal to Warren Buffett is not hard to fathom. To gain an understanding of what made the company so successful, one need not look far. Barnett Helzberg, the company's former CEO, offers valuable insights in his book, "What I Learned Before I Sold to Warren Buffett - An Entrepreneur's Guide to Developing a Highly Successful Company.” In the book, Helzberg shares the experiences and lessons learned from running a thriving chain of jewelry stores with sales per store nearly twice the industry average. Below are some of my favorite quotes from the book. Selling to Warren Buffett “My dream buyer for the family business all along was Warren Buffett. I knew we could trust him to keep the headquarters in Kansas City, resist changing the company's character, and retain the jobs of all of Helzberg's associates. It might have been simpler to sell to the highest bidder, but that notion seemed as sensible as choosing a brain surgeon based on the lowest price rather than on talent and reputation.” Customer Service “Great service exists - fortunately for entrepreneurs it's a rarity. What an opportunity for the ambitious until super-service becomes commonplace (it never will).” “You can provide outstanding service - and own your customer. It will make everyone’s job more fun. It will build your business. Great entrepreneurs recognise the goal is the total customer experience, not just the quality and price of goods or services purchased or given.” “Exceed your customers’ expectations (under-promise - over-deliver).” “You must jump very quickly on the wrong kind of customer service and promote a three-strikes-and-you’re-out mentality and never accept less than the best in customer treatment from your staff. That must be built in as one of the absolutes of your business culture.” Listen to Your Customers “Listening is a discipline, and not an easy one! When I’m speaking, I’m learning nothing. I’m not always learning even when listening, but I have a better chance.” “The point is listen to your customer, not necessarily yourself, your wife, or your third cousin. We are all victims of our own experience as well as beneficiaries thereof! Your personal biases can dangerously skew your decisions. Judge within the context of your customer’s likes and dislikes.” Loyalty & Complaining Customers “Make building loyalty (long-term customer value,) not just satisfaction, your prime goal.” “Your complaining customers [are] your greatest opportunity.. I firmly believe the best customers you may ever have will be the ones who come to you angry but were disarmed by your willingness to listen and respond sympathetically to their complaints. They leave feeling special because you went out of your way to help resolve their problems. These are customers who return again and again because they know you care about them and want them to be happy… The point is to find every opportunity to show your customers you want to take care of them. Rather than be reluctant about resolving a customer’s problem, do it with joy.” “A recent Wall Street Journal explained the incredible value of making the angry customer happy compared with the value of the loyal customer. The FedEx concept of calculating the lifetime value of loyalty (that is, $20,000 per year X 20 years is a $400,000 customer) dramatically portrays this concept. Be proud of the fact that unhappy customers think enough of you to express their unhappiness. The biggest loss to your business are the customers who never come back to complain about a perceived problem. Instead, they tell all their friends that they’ll ‘never deal with that lousy company again.’ One study I read estimates that one unhappy customer tells 18 other people about a bad experience. What a huge missed opportunity. I much prefer that formerly unhappy customers tell their friends how we fixed their problems.” Obliquity “Please add a couple of challenges to that simplistic perception that profit is the be-all and end-all. It's not. First thing to ask, "Is whatever action we want to take getting us closer to our objective?" Let me say this clearly: The objective of a business is not just to make money. That is the byproduct of a job well done. The theme at Ford one year was "Does it sell cars?" At Helzberg Diamonds that inspired, "Does it sell diamonds?" Second thing to ask, "What is the return on the investment?" Profit, though a simple and quantifiable measure, is far, from the whole answer. End of conversation.” Seek a Niche “[My father] refused to sell a diamond solitaire in an engagement ring that was not ‘perfect,’ that is, internally flawless, with good color, good cut, and absolute clarity. As he struggled for a name for this concept, he picked up a box of baking soda on which he read, ‘This baking soda is certified to be perfect.’ Thus, Helzberg "Certified Perfect" Diamonds.” “If you are in a crowded, competitive market, create your own market, that is, not the diamond market, the perfect diamond market; not the beef market; the angus beef market; not the beer market: the freshest beer market.” “Be different - and better! You need a unique selling proposition.” Focus on the Controllables “When growing up, I was intrigued that my father only concerned himself with those business elements that were controllable. He refused to acknowledge the Depression and did quite well during that period. He was unwilling to talk about recessions or 20-inch snow-falls. He only thought about and talked about those conditions within his control. Dad was a great believer in ‘not sweating the small stuff.’ He taught us to concern ourselves only with those things over which we have control. I thought he was unique in this until I realized this is one of the key common traits of highly successful people. Those folks are never victims; they take what comes and handle the situation. The rest is a waste of time.” Copy Ideas “I was always taught that many, many people were out there developing ideas I could use. I have found that to be true throughout my life. [My] thoughts and ideas have all been borrowed or stolen from many wise people. Think of the world as your garden of marvelous people and ideas with unlimited picking rights for you. Enjoy the flowers!” Mistakes - Learn & Move On “Most entrepreneurs could dwell at length on their mistakes. The reason to look in the rearview mirror is to divine exactly what you learned and how you will prevent a repeat of those particular errors. Self-flagellation is a waste of time and brain power. Unreasonable build up of fear, causing you to turn to stone and not innovate, is even worse. Of course, these are not all of my mistakes - that will take another, far larger book. The positive spin to put on your errors is to see them as learning experiences rather than unproductive errors.” Seek Contrary Opinions “Want to increase your chances of making a great decision? Find someone who disagrees with you. That might sound counterintuitive, but I’ve learned that getting a contrary opinion from a friend, a customer, or an advisory board member can be a way of guiding you to a more rewarding decision.” “Being a boss doesn’t make you right. Just because you make the ultimate decisions doesn’t mean you have all the answers. That sign on the door doesn’t make you smarter than everyone else. It just helps people find you.” “People you work with may think you only want to hear the good things, not what is really going on. You can become desperate for the truth, so value that person who disagrees with you, for that individual is a true asset.” Humility & Hiring “Arrogance is counterproductive because arrogant people tend not to listen to and learn from others. Arrogant people are a tremendous turnoff to folks who work with them, cutting off real communication. Most of us know so little about the world, no matter how deeply we know about one small part of it, that we really don't have the right to be arrogant.” “I love the thought that god gave us Mozart to keep us all humble. I’ve been blessed with many opportunities to remain humble and I do believe being the dumbest guy in the room can be the smartest thing you can do as a leader.” “I’ve never kidded myself. Our business really began to perk when I hired people smarter than me. Often, all I had to do was get out of their way. When you find these great people, they make your dreams come true, and then they go beyond your dreams. If you don’t care who gets credit, you can get anything done.” “Nearly every entrepreneur can tell stories of holding on to people too long.” “I learned from my mentors always to look for character, values and people skills. Hire someone who is not only a good fit for the job but, equally important, a good fit for the company culture.” “If you don’t have the right people in the right positions, you have neglected your duty and harmed the company.” “Have several people interview job applicants, so you can get other people's opinions. If possible, have the applicant visit the workplace for a day, so each of you can get a better feel for each other, the job, and the culture. Don't be hurried, and don't succumb to pressure.” “Surrounding yourself with dwarfs does not make you a giant.’ - Yiddish Folk saying.” Share Profits “Profits are important, sharing them is important.” “At Helzberg Diamonds, we had a tradition of increasing individual earnings as much as 17 percent in the form of 10 percent profit sharing, 5 percent in a check called ‘progress sharing,’ and 2 percent immediately vested funds with their match in IRA’s. Lots of dollars went into other rewards such as awards, recognitions, and celebration as well! Devise your own system, but be very careful. Remember that change can be considered a take-away and take-aways are not fun, so go slowly. Try temporary systems, and don’t paint yourself into a corner (remember, a privilege quickly becomes a right).” Value & Empower Employees “Treat people as you want to be treated.” “When people feel valued and see their efforts and ideas count for something, they will strive for peak performance.” “Great teachers understand the power of positive reinforcement to increase desired behaviors, and so do great entrepreneurs and managers.” “If you are good to your company associates, you’re associates will be good to your company.” “We gave careful attention to the people who were at the front lines. The top 25 sales associates each month received a small gift with a handwritten personal note from me.” “One day after about 30 years of experience, another instant flash of the obvious; I suddenly realized that numero uno was not the customer but our own associates; everything literally emanated from them. They were the key to the success of the company - without question. That means you treat each with respect and you celebrate and glorify the success of the leaders in performance.” “Our honoring the top sales producers knew no bounds.” “The old song that says, ‘You gotta love 'em in the A.M., love 'em in the P.M.’ always comes to mind when I think about Helzberg associates.” “People who perform a job every day are just as much experts, and often more so, than consultants who live hundreds of miles away. Engage them in coming up with ways to improve productivity of your business, using some of their ideas will commit them to the task much more readily than if you just tell them what to do. Yes, there are diamonds buried in your own backyard! By asking for the opinions of associates, you immediately dignify the jobs they do, enhance their self-esteem, and increase their effectiveness.” “If you believe in people, you will on occasion, depending on the risk and the reward, willingly allow them to fail. If someone else's idea isn't as good as yours, but it's still okay, you're often better off allowing it done his or her way. Quality of execution is far more important than the idea.” “Motivation and execution will tend to be far better if the individual applies his or her own ideas to the challenge. This concept of ownership is the one that can ignite the spark in your associates, get the job done better than you can expect, and reward them with the joy of accomplishment. It also may be the toughest for many entrepreneurs to embrace.” “Pure psychological ownership can fire up enthusiasm and leadership qualities in those around you. It will point you to future leaders. This concept says, ‘I trust you, I believe in you,’ and it can motivate the living hell out of people. Ownership is key to success.” “In order to succeed in an increasingly complex business world, entrepreneurs need the talents of everyone in the organisation. Believe in the abilities of others and let them grow and perform at their best. Helping others harvest their triumphs will allow you to achieve more success than you could hope for by insisting everything be done your way.” Transparency “One lesson I learned from my associates was that the more open management could be with the team members of the business, the more appreciation there was of the company and the more psychological ownership it gave others.” People “I had been taught from day one by my dad that ‘Business is People.’” “At the end of the day, we found that our key success factor was people. We believed in our people. We felt they knew how to operate a store better than anyone in the business, so we decreased the risks inherent in reaching into a new market by transferring in proven managers and associates from successful stores.” Win-Win “A conscious decision should be made regarding treatment of suppliers. Your team should get together periodically to review your care and feeding program and its effectiveness.” Tone from the Top “There is a perception that if the boss does it, it is acceptable! Whatever you do, you are teaching. That is a great plus; it can also be a great minus if you don’t keep it in mind and conduct yourself as you expect others to.” “Everything you do communicates! You always set an example whether or not you want to!” Ideas “A new idea is delicate. It can be killed by a sneer or a yawn; it can be stabbed to death by a quip and worried to death by a frown on the right man’s brow.” “The courage to ask questions is an attribute. Don't be afraid to ask people more experienced than you for their help. They'll be complimented… The more people you talk to, the greater the brew of ideas you will have to marinate your brain… Even new inventions build on creative ideas that someone thought about before… You are heir to the discoveries of many entrepreneurs who skinned their shins trying something new.” “Attend industry seminars, subscribe to trade publications. The acronym MBWA (management by walking around) is an apt description of another important method you should be using to monitor your industry. Don't scorn competitors and do have open eyes, open ears, and an open mind.” Focus “Focus is your lever to success. As the leader you need to be sure you and your team are doing the right things, and as managers they need to be doing things right… Anything that decreases focus on these right things inhibits progress. Investing unlimited effort in failing projects does not create success.” “Among our happiest and best decisions were throwing out the dead merchandise horses and finding that the success of the company increased proportionately. We eliminated china, crystal, all flatware, luggage, radios, small appliances, and other non-jewellery items - ad infinitum and ad nauseum. The practice of optometry in a few stores ended. We found the less we sold, the better we sold what was left: fine jewelry. The time to give up on peripheral items had come; we were early in the game of giving them up. The company gained great focus and, doing fewer things, became far more successful.” Cut Marginal Stores “When you are operating a group of retail stores, there is always the usual bell curve of weak to great performing stores. Much conventional practice dictates committing great effort to the weakest segment. When I discussed this with my friend Steve Lieberman, the hotdog magnate who ran hundreds of Carousel Snack Bars in shopping centres for many years, he said, ‘You make more money closing bad stores than opening new ones.’ His philosophy made sense.. Our attitude became to upgrade the herd annually, closing the weakest stores each year.” “Each activity you undertake exacts the price of not being able to pursue alternate activities. You are investing the time and talents of your associates.” “Because of their semi-permanency and their unlimited parasitic appetite, underperforming operations destroy the good people you send there for turnaround while simultaneously depriving those great managers and great teammates of an exciting opportunity as well as putting capital to non-productive uses. Management’s challenge is to take advantage of the unlimited opportunity to focus the talents on its most talented people on winners. Riding the winners to success was what created the large average sales volume of Helzberg Diamonds stores.” “Certainly one of the most profitable things ever done in our company was the consistent closing of marginal stores that destroyed human resources (who can be motivated in a weak store with the label of ‘poor store’ on it?), used capital, drained central office focus, and really had no reason for being. What a waste of good teammates. A modest turnaround is not nearly as profitable as sending great people to good stores to build them to great so sending the not-so-strong manager to do the impossible makes even less sense. Cut those cancers out as fast as you can. You will not believe how your profits benefit.” Pricing “When possible and practical, prices should be raised in very minute amounts over a long period, even if the need for an increase does not exist at a given time. Your customers will be far happier with the price if you avoid a major surprise and shock.” Performance Standards & Internal Competition “Setting clear standards of performance tells people what the goals are. Standards allow us to measure our performances and they tell us how far we've come and how far we have to go to reach our destination. They are essential to a successful business. At Helzberg Diamonds we gave a lot of thought to performance standards. We found that.. [Continue Reading...]( [Learning From Helzberg Diamond’s Barnett Helzberg Jnr]( And, in case you missed it: - [Dividend Income Update February 2023]( - [Home Capital Group]( - [Are Inflation Adjusted Stablecoins Safe?]( - [OpenSea Patched Vulnerability That Exposed Identities Of Users]( - [Fed Repriced Out of Action]( - FREE OR LOW COST INVESTING RESOURCES - [i]( [i]( [i]( [i]( Sponsored [This Trade Has Paid Out 99.1%]( We’ve made THIS simple trade over and over again… for years. The result? 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