A Few Thoughts From Costco’s Jim Sinegal
It’s not often that you get to hear from retail legends like Jim Sinegal, co-founder and director of Costco Wholesale Corp. That’s why I was so excited to attend his talk at SAP’s Retail Executive Forum, which was held in New York City earlier this month. And he didn't disappoint.
Sinegal served as the CEO at Costco for 27 years, and was a director there from its inception until his retirement in 2012. His retail career began in 1954, when, as an 18-year-old college student, Sinegal went to work for the legendary retail icon Sol Price at the discount store FedMart in San Diego. Sinegal worked for Price for almost 30 years before striking out on his own to start Costco with his business partner, Jeff Brotman.
Today, Costco has an annual revenue of over $126 billion and operates 741 warehouses/stores in 44 U.S. states, Puerto Rico, and 10 countries. The company employs over 213,000 people worldwide and has earned the reputation of being a fair, progressive employer.
Here are some thoughts from Sinegal, gleaned from his discussion with Matt Laukaitis, senior vice president and general manager, SAP Retail North America, at the event.
On Company Culture: "The culture of a company is what it's all about. I have a saying, 'culture isn't the most important thing, it's the only thing.' Culture drives every decision you make. Culture is everything."
On Leadership: “If you're a manager, teaching is 90 percent of your job. There's only one reason you hire someone, and that's because you can’t do everything yourself. If you're not prepared to teach, you just don't get it. And if you hire well, and if you teach well, those people wind up doing the job better than you would have done it anyway. Our managers understand that, and I think that's a major [reason] for the success of our company.”
On Suppliers: “We respect our suppliers. We [are cognizant of the fact] that they play a very key role in the success in our company ... but suppliers have to be good. They have to be able to perform. But assuming you perform as a supplier, we’re happy and would be delighted to have you with us forever.”
On Bringing Value and Trust to Customers: “We continually build better value for our members. We continually do everything we can to bring goods to market at a lower price. We think, over the years, that’s built trust with our customers. They know we're going to do that.”
On the Inevitability of Change in Retail: “There are always fundamental changes that [retailers] must pay attention to in order to survive, and that will continue to go on. We tell our managers that if we’re going to succeed in the next 15 years, we have to be as creative as we’ve been in the past 15 years. We're continually figuring out what it is that we can do to make Costco more exciting. Now we have e-commerce, which is a big portion of our business and we're going to continue to do that; we have business centers that are a significant portion of what we’re doing; and we’re engaging in some delivery of grocery-type products. Those are all things that we’ll continue to do and develop. But we will still maintain a focus on what our core business is, which is a very significant business. We feel that one of the most significant things about running a business is focus.”
On Mentoring: “If [you] have the opportunity to get a mentor like I did, I would take advantage of it in a second. How lucky was I to find someone like Sol Price, who was the smartest person I've ever known in my life, and to have him as a mentor. All of us know somebody who we respect in our lives, and that learning experience is invaluable.”
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