When it comes to mythical customer service stories, Nordstrom has one of the best ever. While it sounds too good to be true, two of Nordstrom's co-presidents promised a few years ago that it really happened.

It goes like this: A man walks into Nordstrom and says he wants to return a set of tires. A clerk looks at the price on the tires and promptly gives him his money.

The only problem is that Nordstrom doesn't sell tires. Never has. But the story endures as a symbol of the idea that at Nordstrom the customer is always right. 

Now, however, it seems that neither that customer service reputation nor a bunch or other things that Nordstrom has reportedly been doing correctly is enough.

The company "invested heavily in e-commerce, didn't open too many cavernous stores, and has been quick to experiment with new types of shopping formats," reports The Wall Street Journal.

Yet it's doing just as poorly as other legacy retailers, and is expected to report disappointing sales and profits this week. And some members of Nordstrom's board have a theory as to why.

In short, go back to a word in the second sentence of this story: "co-presidents."

From 2000 to 2014, Nordstrom's president was Blake Nordstrom, great-grandson of the company's founder, John W. Nordstrom.

But then Blake's two brothers, Erik Nordstrom and Pete Nordstrom, were named co-presidents with him. Then, this past January, Blake Nordstrom died suddenly after a battle of cancer.

Suddenly, Erik and Pete were the two remaining co-presidents. According to the Journal, neither surviving brother is really 100 percent in charge.

In other words, nobody can tell you the name of the chief executive officer of Nordstrom, because there isn't one. Instead, Erik and Pete reportedly have divided most of the functions of a traditional CEO between them.

They "make all major decisions together," according to the Journal, "often hashing out issues in a Monday morning meeting so that they present a unified front when they sit down with the executive team later that day."

Result: a push by some company directors who want to replace the brothers with a single outsider. But the Journal suggests that's not likely to happen.

Now, I don't have insight into whether the co-presidency really is the problem. But it's a rare situation, as you might imagine, for a large company like Nordstrom to have co-presidents or co-CEOs.

As of five years ago, fewer than two dozen of the 500 biggest companies in America had tried the arrangement (and that doesn't even account for the additional factor that the co-presidents at Nordstrom are brothers). 

I mean, would you imagine doing this with your business? The drawbacks seem obvious--from lack of clarity about who's in command, to tension between the co-leaders, to a potential for paralysis when you try to make big decisions.

Then again, as unusual as this is, it's not as unique as the "insane" situation that the company had 25 years ago, as described by former Nordstrom vice-president of finance Kathy Gersch.

During the 1990s, Nordstrom had six simultaneous related co-presidents, as various heirs to John W. Nordstrom shared the company.

They ultimately gave up power to a single CEO named John Whitaker, but he stayed for only three years.

"John had the clear support of the family and yet it was still a challenging dynamic," Gersch told the Journal.

Published on: Aug 19, 2019
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