Room & Board

Abstract

A retail-furniture company that abandoned the standard retail-industry business model, disavowed debt and equity-growth financing, and embraced a unique multiple-stakeholder model that valued quality and relationships ahead of the bottom line while producing stellar financial results achieves contrarian success. Its culture supported an energized, positive growth environment for its employees that fostered high employee engagement and, in turn, high customer engagement. Now the founder was confronting his biggest challenge: how to institutionalize the unusual business model, culture, and employee environment he has built. His primary objective is to preserve and protect his “relationship” business model, which is the heart and soul of his business's success. Excerpt UVA-S-0150 Rev. Aug. 24, 2010 ROOM & BOARD Room & Board was a privately owned home-furnishings retailer, offering products that combined classic, simple design with exceptional quality. Approximately $ 250 million of revenue a year was generated through Room & Board's fully integrated and multichannel sales approach, consisting of its eight national retail stores, an annual catalog, and its Web site. Based in Minneapolis, Minnesota, Room & Board's story was one of contrarian success as a company that had abandoned the standard retail-industry business model, disavowed debt and equity-growth financing, and embraced a unique multiple-stakeholder model that valued quality and relationships ahead of the bottom line while producing stellar financial results. That the company had achieved consistency and harmony between its values and actions also added to its uniqueness. Its culture supported an energized, positive growth environment for its employees that fostered high employee engagement and, in turn, high customer engagement. Room & Board was wholly owned by John Gabbert, who had created it more than 25 years earlier. Now Gabbert, having reached the age of 60, was confronting his biggest challenge: how to institutionalize the unusual business model, culture, and employee environment he had built. His primary objective was to preserve and protect his “relationship” business model, which was the heart and soul of Room & Board's success. History . . .