Profiting From Fun

Geo

rge Zimmer bounces briskly into the conference hall of a swank California resort tucked among wooded hills with a view of Monterey Bay. The stage is decorated with headless mannequins dressed in suits and sports shirts. There's a clothes dryer, with which an executive has just demonstrated the wrinkle-free quality of a new line of shirts. But the main act is Zimmer, founder and CEO of the Men's Wearhouse, also known as the bearded pitchman with the cornball delivery who ends every commercial for his stores with his signature line, "I guarantee it!," pronounced like a carnival barker as he points to the camera.

Zimmer doesn't care if he's cheesy, because since he opened his first store in Houston 30 years ago, Men's Wearhouse has become the largest men's clothing retailer in the U.S., a $1 billion company with 507 locations. It has outlasted dozens of competitors and survived casual Fridays and a slump in suit sales to show surprising growth this year. Now Zimmer plans to make Men's Wearhouse a $5 billion company that also sells sports clothes and designer wear, rents tuxedos and operates dry cleaners.

As Zimmer takes the stage before an audience of assistant store managers in their 20s and more seasoned store execs, he rattles off the usual list of company accomplishments — the stock had zoomed from $11.95 in January to $27 by August — and generates considerable applause. Then Zimmer veers off in a direction that would make many shareholders squirm, as he explains his unorthodox business philosophy. "You know, at some point we can't pay you enough money to make you want to go to work," Zimmer says, his voice getting quiet. "That's why we have a different feeling at Men's Wearhouse, and the word fun is somehow connected. We take fun seriously. You gotta take fun seriously in business, because God knows everybody could use some lightening up."

Fun. Work. These two words actually knew each other in the roaring '90s, when companies had to pile on the good times to attract and keep the best workers. But in our postbubble corporate coal mines, fun is a memory. Nearly 3 million workers have lost jobs, and the rest of us are nervously glancing over our shoulder in the midst of 60-hour workweeks.

But Zimmer and the CEOs of a few other companies have not abandoned the idea that employees who take business (but not necessarily themselves) seriously stand to be happier and more productive. Fun doesn't save people from layoffs. But it does save them from tedium and stress and can spark creativity. The fun workplace is a concept established by CEOs like Southwest Airlines' Herb Kelleher, for whom audiovisual aids were a lighted cigarette and the clinking ice cubes in his drink. Of course, Kelleher wasn't above handling customer baggage either, and Southwest made tons of money.

Fun isn't cheap. Men's Wearhouse spent $1.8 million on 39 Christmas parties last year and flew either Zimmer or another exec to each of them. When it's time to make a new batch of TV commercials, the company sends a few dozen employees to Los Angeles, puts them up at a Beverly Hills hotel and ferries them around town in limousines so they can be the stars in the commercials. Nepotism is encouraged; the rationale is that if the company hires friends and relatives, everyone will be more likely to get along. Once or twice a year, store managers and assistants are taken to corporate retreats, where they spend a good deal of their time doing silly activities like making small boats out of cardboard, tape and empty milk cartons. Salesmen are encouraged to tune TVs in their stores to sports events, set up putting greens, throw around Nerf footballs and take in doughnuts or pizza for themselves and the customers.

Zimmer isn't on some messianic mission to turn corporate America into a fun house. He just decided a long time ago — contrary to what they tell you in business school — that the most important stakeholders in the company aren't the shareholders or even the customers but the employees. "Look, if the employees are happy and make the stores fun, then that will make it fun for the customers," he says. Many of his customers — men — rank shopping just below flossing. "If they're happy, business will follow, and shareholders will be happy. It all starts with the employees and making it fun for them. Why does work have to be dull?"

Because we're living in an economy only a Puritan could love. When profits began falling, out went lavish holiday parties. Company retreats retreated from Cancun to the conference room. "If, say, on Friday, you announce layoffs and no raises, but hey, next week I'm taking everyone to Hawaii — no, that you can't do," says Bob Moog, founder and CEO of University Games in San Francisco, which has bucked the trend by not emptying the employee goody bag. Economists marvel at the productivity of this new new economy. The Bureau of Labor Statistics announced in August that output per worker increased 5.7% in the second quarter. Translation: we're working harder because companies will not hire more people. Fun? "Phooey! Just give me more time off" is the rallying cry of today's wage slaves.