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Talent is the whole ball game.”
This story first appeared in the November 18, 2002 issue of WWD. Subscribe Today.
That was the simple premise of Kip Tindell, president and chief executive officer of The Container Store. The $300 million retailer of coat hangers, plastic baskets and scores of other organizing products for the home and office, is regularly hailed as one of the best companies in the U.S. at which to work, and Tindell said the secret is never to forget that it is a firm’s people who make the difference.
“I did kind of fret over what to wear to this particular speaking engagement. Containers aren’t exactly couture,” confessed Tindell to the assembled crowd of fashion executives. True, but for an industry that suffers from an annual employee turnover rate of 120 percent a year, retailers of every stripe could probably learn a thing or two from a company that enjoys an 8 percent turnover rate among full-time employees and a 20 percent rate among part-time workers. What’s more, while many retailers are known for their less-than-stellar customer service, The Container Store is known for its ability to churn out highly satisfied customers.
The first step in forging such a workforce, according to Tindell, is to only hire employees willing and able to use their creativity, enthusiasm and intuition to devote themselves to customer service. “We are absolute wild-eyed fanatics when it comes to only hiring great people,” said Tindell. “One foundation principle is that one great person is equal to three good people in terms of business productivity. So we hold out forever for that great person, I don’t care if it’s a vice president or a part-time visual position.”
Tindell warned it takes an astronomical amount of time and effort to create a top-notch workforce — but the payoff is worth it. “Key people in an organization have to actually believe that it’s possible to attract great people to a retail store environment,” he said. “I think most retailers gave up on that a long time ago.”
All employees assist in the recruitment process and carry little gold cards with them to give to friends, relatives and even store customers, inviting them in for a job interview — provided the employee genuinely believes the candidate will be a “great” addition to the payroll.
Of course, high-quality employees usually expect high-quality salaries, and The Container Store pays workers 50 to 100 percent more than the retail average. Fully 10 percent of sales at the company’s 28 stores around the country is devoted to payroll, compared to the industry average of three to four percent. “People wonder how we can afford to do that, but we respond that in a service-oriented business, how can you afford not to?” explained Tindell.
Once a great employee is found, ample training is a vital factor in turning that worker into someone with the ability to reach his or her maximum potential within the company. The Container Store invests 235 hours of formal training in every first-year employee (the retail industry average is a measly seven).
“The key is preparing people to use their intuition and not just training them to act,” explained Tindell. “I think retail is far too situational to attempt to achieve a concerted effort, a real teamwork effort, through inflexible rules and policies. The results of that are all around us in the form of service companies and retailers who fail to provide, of all things, service.”
Another foundation principle is to openly and fully communicate what is going on at the company with everyone who works there. “It takes a lot of bravery to share just about everything with them, but to keep these great employees you have to make sure that they are extremely well-informed,” said Tindell. “The only way that people feel really, really a part of something is if they know everything.”
That means sales results from the previous day are distributed daily to every single employee, along with company goals. Every Monday, the weekend’s sales results are communicated and interpreted, as well as the company’s focus and direction. Additionally, occasional staff meetings of the company’s top 200 employees are held in Dallas for up to a week, where staffers see the same PowerPoint presentation that the board of directors is privy to. Following that meeting, copious and meticulous notes are sent to every employee nationwide.
“I know that occasionally information falls into the wrong hands because we are so free with it, but we decided a long time ago that the advantages of communicating information that empowers our employees and strengthens their development and loyalty far outweighs the disadvantages of that information falling into the hands of competitors,” said Tindell. “And we feel that retailers are way too paranoid.”
The final piece of Tindell’s formula for retail success is to make sure that employees (about 1,600 in total) don’t dread coming to work — he calls it “the bravery to have fun.” This on-the-job merriment includes events like a Halloween chili cook-off, snow cones at the distribution center on hot days, occasional Hawaiian hula-hoop contests and morning and evening huddles. “I know retail is hard, but it doesn’t have to be serious every single minute,” said Tindell. “There is time to laugh and celebrate this great job that we do every day.”
“The bottom line,” explained Tindell, “is that it takes bravery not to conform and to buck universal retail perceptions. You have to differentiate yourself and you’ll be rewarded.”