Blumkin family of Berkshire Hathaway a role model for family businesses.
Heroes have been a topic several times in talks by Warren Buffet. ”Pick your heroes carefully,” he said one time, “as it will have a big impact on who you become.” Another time he said, “Tell me who someone’s heroes are, and I will have a pretty good idea who they are.”
To me, the Blumkin family of the Nebraska Furniture Mart and Berkshire Hathaway are role models of family and American business. Last week, the patriarch of the family, Louie Blumkin, passed on to great acknowledgement around Omaha, Nebraska and throughout the furniture world. If you do not know, the Nebraska Furniture Mart is a very large business that has been a cornerstone of Warren Buffett’s Berkshire Hathaway since 1983. It is admired throughout the world of furniture retailing for its success and its innovations over the years.
Louis was a dynamo. Because my business partner in the National Holistic Institute is related to the Blumkins, we have received great support, enthusiasm and encouragement from the Blumkin family over the years. When Louie visited us, he was quick to ask insightful questions. You could see him running the numbers in his head about how the business worked as we discussed the organization and its impact. At 90 years plus, he was quick and fun to talk with. It was also enjoyable to listen to his stories of fighting in World War II and liberating a concentration camp, and his train ride back to Omaha after the war full of anticipation of what to do with the Nebraska Furniture Mart. From 1945 onward, he ran the Nebraska Furniture Mart, while his mother and the founder of the Nebraska Furniture Mart, Mrs. B, was the front person getting the press and acknowledgements. Their philosophy, if you haven’t heard it before, is “Sell cheap and tell the truth.” They sold a majority of the Nebraska Furniture Mart to Berkshire Hathaway in 1983, and Louie’s sons Irv and Ron Blumkin manage the business today.
Family Business Lessons from the Blumkins and the Nebraska Furniture Mart
Several things have impressed me about the story of the Blumkin family and the Nebraska Furniture Mart.
- It’s a strong family, working hard to support each other. They are very good about making time to spend together and support each other. A favorite scene from these family gatherings is when they get together on July 4th and sing “God Bless America” at the family farm. This particularly means something as Mrs. B (and others) immigrated to America from other countries. When a trip seems too far or too difficult, I get inspiration from the Blumkins who make the trip and make the effort to spend time together.
- Healthy growth for the long-term. The store began in 1937, expanded to a larger Omaha location in 1980, added a Des Moines location in 1993, added a Kansas City store in 2003, and is working on a fourth location. They have grown, but they have done it in a very measured, controlled manner that has kept an eye on the very long-term health of the organization.
- Share with their customers. Like other businesses that begin to get scale that leads to lower costs (Wal-Mart or Geico), the Nebraska Furniture Mart is good at sharing those cost savings with customers. This creates a virtuous cycle of more customers that leads to lower costs that is shared with customers that leads to more customers, etc.
- Honorable organization & doing things the right way. I don’t ever hear of complaints about customers not feeling that they received a fair shake from the Mart. Everyone should aspire to build organizations that have as strong of a track record over 75 years. After the Mart opened their Kansas City location, they were kind enough to share their “lessons learned” from the experience with my business partner and me at the National Holistic Institute. I had a couple of reactions to their list: a) most of the things seemed very nit-picky and small to me, but not to them — they are perfectionists; and b) everything they mentioned was about making sure things were done as well as possible from day one. These were things such as hiring more people so that they had an abundance of staff at the store opening or training people for longer to make sure that their entire staff and organization were primed for success. There was nothing more important to them than doing it the best way possible right from the beginning.
Many people contribute to our success in life. Although I didn’t know him well, I had a few meaningful interactions with Louie and his wife Frannie that had an impact on me — it contributed to why I am building Greybull Stewardship in the way that I am. Ideally, I want Greybull Stewardship to be a long-term home for businesses like the Nebraska Furniture Mart that are about long-term success and they have the best elements of family businesses — a long-term focus, continuity of beliefs and values, and a willingness to share with their customers, employees, and community.