COSTCO's Not-So-Secret Formula
Besides continuing to sell a hot dog and soda at the 1976 price of $1.50, COSTCO got a few other things right. Credited with being an "in-the-trenches" CEO, Jim Sinegal ends a wildly successful run based on a magic mix of making customers and employees happy while creating strong business and community ties. Jim Cramer, host of Mad Money attributes their low turnover to a culture that includes above-averge salaries and health benefits available to many employees. Cramer says the low turnover helps the stability of the brand -- adding that 'Jim knew how to treat people well -- and a lot of things flow from that.' A retired COSTCO executive says of the early days: "We didn't lie. We didn't cheat. We didn't take advantage of our suppliers. We always respected our people. This wasn't just a statement on the wall." Jim's management philosophy is that if managers aren't spending 90 percent of their time teaching, they are not doing their job. (The COSTO Connection, January, 2012. Article by David W. Fuller, Tim Talevich and Brenda Shecter)
Kudos to COSTCO for a refreshingly basic, but rare, way to retain and develop employees.
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