Business & Economy

CASE STUDY: La-Z-Boy Furniture Galleries

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Bernie Willock

This is a case study on the Victoria, BC branch of La-Z-Boy, a well-established furniture company. The case study focuses on details surrounding the operations of La-Z-Boy by the branch founding partner, Bernie Willock.

Introduction

Bernie Willock is a forester by training who has previously been the vice president of sales & marketing for a property development company for four years, as well as a youth pastor for the four years prior.

Bernie lives on prosperous and large but sparsely populated Vancouver Island on the west coast of Canada, about 50 km north of British Columbia’s capital, Victoria.

This is the story of how he sought to incorporate his faith into the design of a new business.


Context


As sales director of a property company, Bernie wished to reshape the business to realize his Christian faith through his work. Faced with a complex ownership structure, this did not prove possible. Bernie, consequently, began to think about starting his own retail business. This would entail a fresh configuration of the entire business. How would he go about incorporating his beliefs into the structure and processes of the business?

There were no role models in sight where he was working . No one was interested in translating faith into the design of the business. Being a “bookish” type, Bernie thought to research books that addressed the subject, but he was not aware of any. As far as he could tell, he was alone in this passion to live out his faith as an entrepreneur. In the face of uncertainty, Bernie still decided to pursue a business venture that would reflect a Christian vision.


Vision and Goal


Bernie and his business partner Anthony’s vision was to launch a La-Z-Boy Furniture Galleries (TM) store on Vancouver Island. Bernie would handle customer-related operations such as pricing, sales, and marketing while Anthony would lead the backroom responsibilities, such as warehousing and distribution.

Bernie wanted to revolutionize the way furniture retailing was done. What would a “kingdom business” look like? In the early days, he committed to a salary/profit sharing pay structure over a commission-based structure, but was considering how the business might distribute the remainder of pre-tax profit.

Bernie and his partner began to make firm plans to find the land and begin building the furniture gallery. It was at this point that a crisis occurred that required immediate attention.


Challenges


Bernie and Anthony needed a store to display their furniture. They had a site. But being an entrepreneur Bernie “wanted to own the building and to have control over the site.” This meant they had to attempt re-zoning. Ten days before the council meeting to approve the re-zoning, however, Bernie still needed $1 million to close on the property. The funds were due on approval of council.

At the time Bernie and his partner were searching to find financing for the gallery, Bernie had finished reading the autobiography of George Muller. As he was reading the story of this man’s life of prayer and total dependence on God for all his needs, he sensed the Lord saying this promise was for him as well, and to stop asking others for money--the Lord would reveal his will and provide all he needed. This led Bernie to ask how the Holy Spirit was being manifested, and how the Holy Spirit was using his reading. Bernie says of this time, “I was overwhelmed with the sense that God was in control and would solve the problem.” Just stop and wait.

God's Faithfulness

Bernie phoned his business partner that evening, and together they determined they would cease asking for financial backing.

Three days later, a friend walked into a coffee shop and asked how the project and finances were going. After an explanation of the situation the friend offered to build the retail building since he had access to finance. He would lease the premises to Bernie and his partner and they would be the first tenants.

Within four days, Bernie and Anthony had transferred the land to their friend and closed the deal. This was in time to win approval for the plan from the council. The retail store was built and subsequently won an architectural award.

While the furniture gallery was under construction, there was an opportunity for Bernie to reflect and seek more clarity. With launch 90 days away, he booked five days at a motel on Long Beach, Vancouver Island--one of his favourite spots.

On route, he stopped in a bookstore and found a copy of the The Other Six Days by R. Paul Stevens. “Reading this book is what God used to release my redemptive imagination. It gave me courage to rethink and reframe all the existing paradigms. Scripture verses took a new meaning,” says Bernie.

During the next five days of reading, asking hard questions, examining the scriptures, going for long walks, praying, and meditating, Bernie shaped the ideas that would set the new business apart. Early design came from wrestling with all the obvious ills of the existing retail systems and prayerful reflection on alternatives. On the retreat, Bernie developed ways to distribute the remainder of pre-tax profit within the context of a counter-cultural economic model of abundance/self-limitation and sharing/collaboration.

Returning from his retreat, Bernie relayed his ideas to his business partner and they prayed. When Bernie discovered that Paul Stevens was teaching at Regent College in nearby Vancouver, he headed to the bookstore and library there to find more reading.


Faith in Action


Bernie attended conferences and enrolled in theological and marketplace courses at Regent College. Without his study, Bernie recalls, “I’m sure the design and trajectory of the business wouldn’t look anything like what was actually designed and built over the next decade.” Through his studies and continued prayer, a fresh configuration for business was indeed cultivated in the first furniture store he and Anthony opened in September 1999.

Pricing

In view of the customer-related side of the business, Bernie set about changing the pricing policy of the gallery. La-Z-Boy Victoria introduced what it called “fair pricing.” Prices were kept at a constant, fair price throughout the year with no massive sales. The idea was to build up a loyal, lifetime customer base “one customer at a time.”

At first, closing ratios fell as a result of the change in policy. However, Bernie convinced people to hold firm. Eventually, earnings turned around. In subsequent years, customer loyalty and sales increased.

Compensation

Bernie and his partner revolutionized the industry compensation plan. They allocated a large proportion of pre-tax profits to profit sharing. Every employee received an equal amount of these shared profits based on delivered sales. They based other bonuses and salary raises on predetermined metrics, so there was no subjectivity. Raises were based entirely on objective analysis. As a result, as Bernie pointed out, “Our turnover of staff was the lowest of the entire La-Z-Boy system.” Sales per employee grew as well.

Transparency

Bernie and his partner decided to open the financial books to each member of their staff. The result: “Each one of your staff becomes little MBA's, finding new ways of doing things to increase productivity and reduce costs. They started doing the numbers for us.”

Donating Profits

Sharing a significant percentage of pre-tax profit with two NGO partners became a cornerstone of the business. Because the majority of the sales staff was female, the gallery chose to partner with Opportunity International, a Christian micro-finance organization, whose clients were 85% female. The gallery also became the financial sponsor of the Compassion International “child survival programme” in two villages in Haiti. This resonated with female staff, some of whom were single moms and could visualize moms overseas who were trying to feed their children. Bernie and four staff visited the projects each year to see “what impact their work in Canada was having on the lives of their partners abroad.” The first trip to Haiti “was a transformational engagement for all of us.” Sharing profits added to the meaning of their work.

Bernie and his partner opened a second store in Nanaimo in the fall of 2003 and a distribution warehouse in the fall of 2009.


Epilogue


Bernie still lives on Vancouver Island. He sold his share in the La-Z-Boy enterprise to his partner and managers, and used the proceeds to buy Pine Lodge Farm, which had belonged to his father-in-law, Cliff. Bernie and his wife Marlene use the farm to produce organic eggs and produce, host weddings, and serve as a retreat centre for entrepreneurs thinking of starting up an enterprise or developing a new one. For more information on Pine Lodge Farm, visit their website at www.pinelodgefarm.ca.

Further Resources

Books Bernie recommends

  • Arias, Mortimer. Announcing the Reign of God: Evangelization and the Subversive Memory of Jesus. Philadelphia: Fortress Press, 1984
  • Brueggemann, Walter. The Prophetic Imagination. London: SCM Press, 1992
  • Chewning, Richard C., John W. Eby, and Shirley Roels, Business Through the Eyes of Faith. Nottingham: Appolos, 1992
  • Collins, Jim. Good to Great: Why Some Companies Make the Leap…and Others Don’t. New York: HarperCollins Publishing Inc., 2001
  • Foster, Richard. Celebration of Discipline. London: Hodder & Stoughton, 1989
  • Lenconi, Patrick. The Five Dysfunctions of a Team: A Leadership Fable. San Francisco: Josey-Bass, 2002
  • Muller, George. The Autobiography of George Muller. New Kensington, PA: Whitaker House, 1984
  • Nouwen, Henri, J.M. In the Name of Jesus: Reflections of Christian Leadership. New York: Crossroad, 1989
  • Silvoso, Ed. Anointed for Business: How to Use Your Influence in the Marketplace to Change the World. Ventura, CA: Regal Books, 2002
  • Stevens, R. Paul, The Other Six Days: Vocation, Work and Ministry in Biblical Perspective.” Grand Rapids, Mich.: W.B. Eerdman, 1999

Courses Bernie has taken at Regent College, Vancouver

Source: Marketplace Institute



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