Success of Family-Owned Business: Its Non-Family Employees
By Ater Wynne LLP,
Oregon law firm
The success of Les Schwab Tires is its non-family employees….all 7,000 of them. This is the lesson I took from the discussion with CEO, Dick Borgman on April 14, 2011, at the Power Breakfast sponsored by Portland Business Journal.
Fifty years ago founder Les Schwab established a profit sharing program company wide that gives every employee a stake in the business. This sharing gives each store 50% of the profits to share with the employees of that store.
In addition, every employee has the potential and possibility of becoming a store manager. This is done through growth. Because Les Schwab promotes from within, employees have an opportunity of becoming managers of those expansion stores.
Les Schwab is known for its customer service. To retain that culture of service, the Company uses a screening system (screens for attributes and aptitude) at the entry level and then provides training to employees hired. Those employees with management ambition receive further training to develop management skills and acumen.
Mr. Borgman attributes all of these fundamental employee policies as key to customer service and low employee turn-over. There are some employees who have been with the Company for 20, 30 even 40 years.
Mr. Borgman is the first CEO since the death of Les Schwab on May 18, 2007. Les Schwab Tire Centers began in January, 1952, in Prineville, Oregon. Today, it is the leading tire retailer in the United States with 400 store locations throughout the Western United States. The base of operations remains in Central Oregon and has grown to $1.5 billion.