Darvin and George pride themselves on ignoring much of the conventional wisdom of the retail furniture industry -- or any industry, for that matter. To start with, there is management style. The president and executive vice-President work as a team, making all the key decisions in tandem and delegating even the most routine tasks only reluctantly. They say they "never want to become administrators." They do, however, recognize the need for a second line of management, and they intend to meet it by promoting from within. Bringing in people from the outside would tend to dilute their influence on the rank and file. The pair would prefer to continue spending perhaps a year instilling their candidates with the "right stuff," and putting them through what is euphemistically referred to as the "vacuum test" (a selling stint that includes house-cleaning duties), before giving them any authority. But with new stores, which require new managers, opening at a rate of one almost every two months, that is too big an investment of time. That is why SDU was developed -- to train more people and to do it better and faster.
Then there is the company's human resources policy. Darvin and George say it is only happenstance, but Scandinavian Design's work force is young (average age, 27) and predominantly female (65% of the employees are women). They are paid on salary, not commission, and they are promoted to positions of responsibility quickly. The company also runs lean, staffing each store with one manager and five to seven salespeople. While other chains may have a buyer in each store and at least a score of department heads in the home office, Scandinavian Design has only 10 people in chain-wide supervisory roles, and Darvin and George do the majority of the buying themselves.
But perhaps the clearest contrasts with other furniture chains are found in the areas of marketing and merchandising. Scandinavian Design's stores are small, averaging 5,000 square feet, and they stick to selected contemporary pieces in imported teak and rosewood, as well as domestic oak. Other retailers troop to the manufacturers' market in North Carolina every year, but Darvin and George also take the relatively unheard-of step of designing some of their own pieces and coaxing manufacturers into producing them. And while other furniture operations dangle loss leaders, Scandinavian Design focuses its elegantly aggressive advertisements and promotions on its higher-ticket items.
It all works. Scandinavian Design is known as one of the most innovative furniture retailers in the country. The company's employees are perceived to be more knowledgeable, dedicated, and productive than most. While the average furniture retailer will generate about $60 in sales per square foot annually and turn over its stock around twice a year, Scandinavian Design boasts of selling an average of $377 per square foot, and it turns over its inventory eight times each year.
Darvin says he credits all of this to the company's commitment to employee education and training, which goes back at least seven years. He says he and George are regularly "scolded" by competitors for the "show-biz" of SDU, but he feels that is because other chains don't understand the value of a good education and training program. "People in our industry are behind the times. They say, 'Why should we bother to train people? These are entry positions, and they're only going to leave us for another job in a year or two. It's not worth the money."
That is the thing that has always bothered Darvin about selling. "It's a put-down position with longhours and low pay," he says. "Hardly anyone sees it for the marvelous occupation -- profession, really -- that it is."
Darvin got his first taste of the selling life while peddling insulating material to retailers for several years after he graduated Rutgers University's marketing program. "I was on the road, and I made lots of cold calls. Believe me, you never get over having a door slammed in your face."
He promised himself two things: If he ever got his own business, he would never refuse to see a salesperson (a policy he says he adheres to), and "I'd never let my people feel bad about themselves." Even then, in the early 1960s, Darvin felt he could develop confident employees through education and training -- not the kind he had received, with its heavy emphasis on the features of the product, the benefits of the product, and the pricing of the product, but rather a broader-based program that would focus on the abilities and attitudes of the individual.
In 1965, Darvin and his wife, Gretchen, opened the first Scandinavian Design furniture store in a rented, one-room house on Route 9, about 15 miles west of Boston. One of the first things they did was initiate a modest training program. But it wasn't until 1976, while acquiring another furniture store, that Darvin found a reason to expand and improve the program. That reason was Judy George.
"Judy was working for [the store Darvin was acquiring], and she came to me and demanded that I keep her," Darvin recalls, laughing. "She came at me with a list of 75 demands, and one of them was that I get serious about education and training."
George was hired, and the matter of improving Scandinavian Design's education and training program landed in her lap. Her first effort, she admits, was "a bomb." She spent $25,000 on a prepackaged training program that "made our people feel like robots." Not that there was anything so terribly wrong with the curriculum; Aud Kaalstad, then a sales consultant, still credits the program with increasing her sales by 36% in the first year. But there were widespread complaints that parts of the package had nothing to do with selling high-fashion furniture to generally upscale, young customers.
