I spent the better part of the Thanksgiving holiday catching up on some reading I've pushed off over the past few years. Near the top of that list was Robert P. Miles' The Warren Buffett CEO, in which the author profiles some of the best operating managers of Berkshire Hathaway
Of all the great managers who work or have worked under Warren Buffett, perhaps the best-known is the late Rose Blumkin, aka "Mrs. B," the founder and matriarch of Nebraska Furniture Mart (NFM). An emigre from Russia after World War I, Mrs. B started NFM in 1937 at age 44. By the time she sold it to Berkshire Hathaway in 1983, the store was pulling in almost $90 million and generating $443 in sales per square foot. Nearly 20 years later, as Mr. Miles tells it, NFM sells more than $1 million worth of furniture per day and generates $865 in sales per square foot. At the time the book was published, that was almost $100 more than Costco
The keys to success
It's understandable that retailers, managers, and yes, investors, can learn a thing or two from Mrs. B. In his book Mr. Miles outlines Rose Blumkin's five business tenets:
- The customer is always first.
- Spend 100% of your time with the customer.
- Don't spend on anything unless it's going to help the customer.
- Pass on your savings to the customer.
- Don't take on any debts.
I read through that list numerous times after I finished the section on Mrs. B. Her rules seem simple enough, and really boil down to a relentless focus on serving the customer -- and she was relentless. It got me thinking about other companies that follow the same approach. Could I find ones that didn't occupy industries widely known for good customer service -- the Starbucks
Making Mrs. B proud
The first pick on my list would have to be Blue Nile
I'd also point out Blackboard
Foolish bottom line
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Fool co-founder Tom Gardner and his team at Motley Fool Hidden Gems spend hours each month finding just these kinds of small-cap investment ideas. (Incidentally, Blue Nile and Blackboard are two of the team's picks.) Since the newsletter service's inception in 2003, those picks are outperforming the market by more than 24 percentage points on average. If that sounds good to you, we invite you to take a free 30-day trial. Oh, and the customer service is pretty good, too.
Andy Cross owns shares of Berkshire Hathaway. Blue Nile and Blackboard are Hidden Gems picks. Berkshire Hathaway is an Inside Value pick. Starbucks, Costco, and JetBlue are Stock Advisor picks. The Fool has adisclosure policy.