Mattress Firm and Mattress Giant had been competitors for years. So when Mattress Firm took over the rival 180-store Mattress Giant last year it was imperative for Steve Stagner to build camaraderie, teamwork and a foundation of common culture between the two teams.
That’s why he closed all the stores — temporarily — and held a team-building exercise at seven locations across the country.
“We had about 400 of their sales associates show up along with a couple hundred of our people,” says Stagner, president and CEO of Mattress Firm. “In the first four hours, they spent it in shorts and T-shirts, running around the community finding things together, creating videos on their phones and trying to help (each other) do things.”
The modified scavenger hunt was a success, creating a clean slate for the team members and allowing the foundation of a new company culture to be built.
“The idea was to take our culture and their culture, strip our titles and our ‘badges’ — badges meaning what company you work for, Mattress Firm and Mattress Giant — and get people to work together, play together, laugh together and solve problems together for a few hours,” Stagner says.
“What was amazing about that was that by noon or so when they all returned, they were wearing the same shirts, high five-ing, knowing each other on a personal level. We had been fierce competitors for 25 years, and by noon, we were all sharing ideas. To me, that is the foundation for how a culture is built. It is built on trust and on a relationship.”
Stagner believed a crucial component of building a merged culture was for people to let go of their egos and their assumptions on what really counts on both sides of the ledger.
“Then it’s to figure out how one plus one equals three,” he says, “and how together we could be more powerful than separately. That is the way I like to do things. It’s sort of an experiential process because I don’t believe in sending out a memo. Whatever I write, it’s going to be thrown away in about 30 minutes anyway.
“When you bring them together and you let them go through an emotional experience, and then two years from now, they will have a foundation. That’s really the key to growth and how you bring cultures together.”
Stagner is seeing positive results from last year’s acquisition.
“We had anticipated there would be a certain level of attrition, as a result, and it hasn’t happened,” he says. “The people have stayed.”
To Stagner, it is critically fundamental to maintain the culture to support the very aggressive growth plans Mattress Firm is undertaking. Here’s how Stagner and his team focus on culture to generate $1.1 billion in annual revenue from 1,200 locations with 3,000 employees.
Find the pillars of culture
Look at a successful business, scratch the surface and underneath you will find a company culture that ties together some great people. Building a company culture often starts with a leader eager to develop an equally eager workforce.
Stagner became CEO in 2010, but he had been associated with Mattress Firm since creating a business plan for the company in 1995. He credits having several strong mentors and thousands of hours studying leadership and the art of selling as helping him mold his philosophy.
Stagner developed his business plan based on hiring the best of the best, assembling a team that was focused on building something greater than itself, which would be a national chain.
“We always challenge each other to grow as individuals,” he says. “The hours that we spend at work are not just about selling mattresses; it’s about how can we grow into better leaders, better people and better performers in that role. Those pillars are the key underpinnings of the culture.”
In comparison to other retailers, turnover at Mattress Firm is low. Stagner gives credit to investing in the individual growth of employees.
“So what happens is you invest in your people, in their individual growth,” he says. “I look at it as a hiring promise. When the company hires someone, the hiring promise is basically that we really want to invest in you as an individual.”
At Mattress Firm, employees go through Ground School, an education process like a college degree program in the sense that it doesn’t just end after the first couple of weeks on the job.
“We are not only investing in you when you first start, but all the way through your career so when you leave here, you are better off than when you came here,” Stagner says. “You’ve learned critical work and life competencies that will help you for the rest of your life. I don’t believe in my heart that people work for companies solely because of their compensation.”
Many companies, in addition to salary, significantly invest time and money into leadership training and communication. Mattress Firm goes beyond those tangible benefits, and significantly invests time and money into community involvement. For instance, last year, the company spent about 5,500 hours in community work across the chain, and raised and invested more than $1 million for various causes, particularly working toward a cure for pancreatic cancer.
“Measure that by things that you do to make sure that you are investing time into your people and that way, the idea is that the culture will take care of the strategy,” Stagner says. “The company can have a strategic plan, which we do, and we execute on that, but the culture is really what makes the plan work.”
Positively seek continuous improvement
Capturing the gist of your culture in a catchy phrase is a great idea if you want your team to remember it. Stagner puts the unique description simply: a positive sense of discontent.
“Ours is a culture that is highly positive,” he says. “But the sense of discontent is that we always believe we can do better. There is a humility that goes through our culture based on the fact that we are just very aggressive about winning but humble about achieving success.”
To put it in perspective, the positive discontent drives a desire to improve continuously and in effect, to become, perhaps, a little larger than life.
“So that is the positive sense of discontent — never set sail; there’s always so much more that we can do for each other,” he says. “That is a key component to why I think our culture works.”
Another fundamental is to have employees who demonstrate passion in some areas of their life.
“Whether or not they are in operations, advertising, communications or sales, acquire people who are successful, who are highly passionate about what they do,” Stagner says.
He finds that recruiting heavily on college campuses increases the chances of acquiring future managers as well as sales associates.
“I think it is unique that about 60 percent of our team has college degrees,” he says. “But people are like, ‘Well, I just spent four years getting a degree. Why would I want to go sell mattresses?’”
The reason? It’s not just about selling mattresses. Rather, at Mattress Firm it is about the opportunity for employees to learn critical work and life competencies that will help them for the rest of their lives. Stagner has created a brand promise to invest time in helping them grow.
“It’s, ‘Come work here and learn how to run a business. Learn how to become a better leader,’” he says. “And as a result of that, there are 400 to 500 students every year who come and work for us right out of college. Most of our management team is stacked with people who have been with us for 10 or 15 years.”
Once Stagner stripped away all the layers, he defined a sale as a transfer of enthusiasm so that employees would understand the transaction in its basic terms, as a core principle.
“It is simply that if I am trying to convince you to do anything, whether it is to go on a trip or to buy a mattress, it happens to the degree that I can transfer my enthusiasm to you,” he says. “Selling a product is really about transferring the passion and enthusiasm I have about that product to you. When you feel that passion and enthusiasm, action is taken.”
That becomes evident in the organization in many ways: from the way employees answer the phone, to the way people are greeted in the stores, to the way employees talk about things, everything is around that passion.
“So if I am happy about my iPhone, I tell you how cool my iPhone is, and I am passionate about it being used and excited about it, and then maybe you start thinking ‘I, too, should have an iPhone.’ And that is really important because that is what perpetuates the brand. The brand is not just a transaction to us.”
How to reach: Mattress Firm, (877) 384-2903 or www.mattressfirm.com
Find the pillars of culture.
Positively seek continuous improvement.
Transfer the enthusiasm.
The Stagner File
president and CEO
Born: Lubbock, Texas. I grew up in Kingwood here in Houston.
Education: I went to Stephen F. Austin State University and received a degree in marketing.
What was your first job? I was working in a warehouse for on office supply chain, pulling orders. What I learned while I was doing that was that hard work is important. People do hard jobs. The summers in Houston, especially in a warehouse, are not exactly that enjoyable. But I also saw a lot of how the culture works, how culture works when there are people who are dissenting leadership or supporting leadership because you hear the guys. I can kind of remember how they talked about their bosses and stuff like that. So I learned a little bit about how cultures worked and how quality control is really impacted when people don’t care about their jobs.
Who do you admire in business? One of my mentors actually just passed away. His name was Larry Wilson. He co-wrote books called “Play to Win: Choosing Growth Over Fear in Work and Life” and “The One Minute Sales Person.” His theory was really based on a couple of different things, one of which is the wonderful paradox of if you help enough other people get what they want, you get what you want. So I have kind of modeled my personal life around not worrying about what happens to me at all, financially or anything. I don’t even pay much attention to that. It’s spending time making sure that you are helping others get the success in their careers they want. The paradox is that things just happen to work out.
What is the best business advice you ever received? Invest in yourself and hire people better than you. And the way I would capture that is to be very humble. One of my favorite chapters in the Jim Collins book “Good to Great: Why Some Companies Make the Leap … and Others Don’t” is the chapter on Level Five Leadership. He talks about the balance between humility and will, to really follow people because they want to, not because you have to. It’s by demonstrating the strong balance between being humble, being real with everyone and being willing to do what they have done.
What is your definition of business success? Success can be measured in many ways. Certainly there is no reason to apologize for achieving financial success and growth. If you are good at what you do, then you should be rewarded for it. But I don’t measure my success based on how much we sell or how much we make, because I don’t believe that on my deathbed I’m going to be worried about what our success was in the first quarter of 2013. I believe the true measurement of success is the value that we as an organization of people provide our communities and our customers, because if we do that, we add value, then we will be rewarded for that, and then the shareholder value will go up. It’s kind of the same paradox. I measure success on the value of creating and then the financial measurements happen. That’s my definition.