Jim Sinegal, the founder and CEO of Costco, can teach all of us, especially CEOs and other high-level executives, a thing or two about career success. In 25 years Sinegal has built a multibillion-dollar business empire that serves 51.8 million members yearly and employs 137,000 globally.
How did he do it? Let’s review a few unique yet key elements that helped Sinegal achieve CEO career success.
Successful CEOs Build Strong Foundations of Loyalty with Employees, Which Creates Good PR.
Makes sense, right? Treat your employees very well, and they will do all the work for you. It’s true — so why don’t other CEOs practice this? CEOs who show loyalty and appreciation for employees will not only keep them employed longer but also gain free PR and advertising for life.
Sinegal has a workforce of 137,000, and unlike many of his fellow CEOs out there, he really invests in his employees — and with the lowest turnover rate among retail stores today, it shows.
Costco pays its employees $17 per hour, which leaves its competitors in the dust. The company also offers employees full healthcare benefits — even part-time employees.
''When Jim talks to us about setting wages and benefits, he doesn’t want us to be better than everyone else, he wants us to be demonstrably better,'' John Matthews, Costco’s senior vice president for human resources, told the New York Times.
When Sinegal visits his employees, he shows that he values them too.
''The employees know that I want to say hello to them, because I like them,'' he told ABC News.
As a result, Sinegal doesn’t have to worry about advertising or public relations for the company; his well-taken-care-of employees take care of that naturally.
''Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you,'' Sinegal said.
Humility Will Get You Everywhere: CEOs without Egos Go Far in Their Careers.
A unique and admirable CEO star quality that Sinegal possesses is his ability to identify with his employees by working side by side with them on an even playing field.
According to ABC News, Sinegal sends out his own faxes from his bare-bones office-without-walls at company headquarters near Seattle, works in Costco stores with a name tag that simply says ''Jim,'' and even takes customer calls.
''If a customer’s calling, and they have a gripe, don’t you think they kind of enjoy the fact that I picked up the phone and talked to them?'' he said.
Along with this, astonishingly Sinegal’s salary is $350,000 per year. No, I didn’t forget any extra zeros on that number. With CEOs of companies less than half the size of Costco spending that much on one car, Sinegal truly is in a league of his own.
''I figured that if I was making something like 12 times more than the typical person working on the floor, that was a fair salary,'' he said.
''Wall Street is in the business of making money between now and next Tuesday. We’re in the business of building an organization, an institution that we hope will be here 50 years from now. And paying good wages and keeping your people working with you is very good business.''
CEOs Who Provide Their Customers with Value for Their Money Will Reap Rewards.
Costco’s business model focuses on stocking a bulk selection of high-quality products for a cheap price, providing much more value to customers. Costco members do have to pay a yearly fee to shop at the stores, but when you consider the deals they get on products, it’s a real bargain.
Sinegal makes sure that no branded items are marked up by more than 14% and no private-label items by more than 15%.
Costco supplies a selection of about 4,000 products. Wal-Mart supplies 100,000, but they’re not nearly as high-quality, and the selection is greater. Televisions, barbecues, spas, seafood, instruments, and even pet urns are just a few of the items Costco sells at unbeatable prices.
As a result, Sinegal’s 536 store locations did more than $60 billion in business last year. And the customers rave about the store’s selection and customer service.
''They have a wonderful return policy, and they’re helpful and professional. They can check inventory quickly if you need something they don’t have. The savings on staple items make the $50 membership well worth it,'' said longtime Costco customer Diane Dowsett.
