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The Container Store is the epitome of the “employee first” work place. CEO Kip Tindell opened the first Container Store in Dallas in 1978. Many people doubted that he would be successful at selling empty storage and organization containers, however he continues to prove those people wrong as he manages his 67 stores, and opens 10 more this year.
The most recent of these 10 new stores is in Salt Lake City. After he spoke at DU, Tindell was on his way to assist in the commencement of the new location. As he tours the country opening new store locations, he is also promoting his new book, Uncontainable, in which he writes about how he has “built a business where everyone thrives.”
Before Tindell opened the first Container Store, there was no other store that had quite the same merchandise. He shared the story of ordering the ever popular colored milk crates for the first time. This is an item that everyone had in their house, but never used for anything other than milk. The correspondent was so used to handling such large orders, they questioned whether or not Tindell was sure he really wanted to buy such small amounts of so many different colored crates. Little did they know that this would become one of The Container Store’s most popular items.
Despite the harsh questioning from some of the early vendors, Tindell proceeded with his idea and began to hire employees. Over the years, The Container Store has built a system of values that resonates through every employee at every store. These seven values, along with the idea of conscious capitalism, have really shaped The Container Store to be as successful as it is.
One of the ways The Container Store is managed differently from many other large retailers is that they do not believe in a “top down” approach. This militaristic style of leadership where there are a few people at the top who hold the power is not the approach Tindell took when setting up the employee structure of his company. By building relationship with employees, the company is able to boast employment data that many companies would be jealous of. The Container Store only hires three percent of its applicants. Being so selective has worked extremely well, as they also take pride in their less than 10 percent employee turnover rate. The motive behind such a thorough process is the first of seven principles that define The Container Store culture.
“1 Great Person = 3 Good People.” All of the employees at The Container Store are great people. From productivity to personal relationships, hiring great people is something they take seriously. Each new employee completes 263 hours of formal training before they officially start working. If you go into any location, every sales representative will be knowledgeable about the merchandise, and will be able to offer helpful suggestions on the best way to organize your space. Getting organized can often be difficult for people, and The Container Store employees have a duty to not only inform shoppers about the products, but to lend a helping hand to people who need guidance on how navigate the organization process. Due to the greatness of the people they hire, The Container Store pays their employees well above the national average. Unless absolutely necessary, employees do not get fired. In 2008, The Container Store faced their first decline in profits. Tindell told the crowd that instead of laying off employees and lowering wages as many retailers did, every employee retained their job. The SG&A expenses were lowered, amongst other things, so that The Container Store could stay true to their “employees first” principle.
The second of principle Tindell shared is a quote from Andrew Carnegie. “Fill the other guy’s basket to the brim. Making money then becomes an easy proposition.” The interpretation of this translates to the importance of building relationships with vendors. Many of The Container Store vendors are small businesses that rely on the company’s business. By having good relationships, The Container Store is able to continue to sell the products that their customers want, at prices that suit everyone.
Principle number three is “Man in the desert selling.” At first glance, this makes little sense. In his book, Tindell shares an anecdote to clarify. He basically says that if a man is lost in the desert and comes across someone who offers him a glass of water, his immediate thirst will be solved. However, this glass of water does not solve the majority of his problems. In terms of selling products, The Container Store employees really want to understand and solve your entire problem, not just give a quick fix. Using this idea as a foundation for selling makes The Container Store unique in providing not only a product, but a service as well.
“Communication IS leadership” is the fourth principle. Tindell talked about how his wife Melissa is very involved in the business, and is most passionate about this principle. If you go into a Container Store, you will find employees who are extraordinarily knowledgeable and courteous. Communication between employees and customers is how any retail business sells their products, and this company understands the importance of this relationship. Customers are going to be less satisfied with a pushy or rude employee, which is why The Container Store teaches effective communication to each one of its employees.
In the food business, restaurants strive to find the ultimate balance between serving food that is good, fast, and cheap. Retail businesses operate similarly as they try to find “the best selection, service & price.” The Container Store satisfies this first obligation as over 10,000 products grace the shelves of every store. Employees are trained in effective service, and many people would agree that The Container Store satisfies this second obligation as well. When offering merchandise that includes something as mundane as an empty box, it is easy to overprice. However, The Container Store has been able to keep reasonable prices for each and every one of its products. The company is the leading player in the organization sector of the retail market because they are able to fulfill all three requirements of their fifth principle.
Principle number 6 is a quote from journalist Roy Rowan in a 1986 issue of the Boardroom Reports: “Intuition does not come to an unprepared mind. You need to train before it happens.” The example Tindell used to describe this principle involves Albert Einstein. When he discovered his theory of relativity, he had been studying math and physics for numerous years before. Had he not completed his previous studies, he would not have come up with this principle. The Container Store is proud of how they prepare their employees to be able to come up with a solution to any problem they are faced with.
The final principle that Tindell talked about is number seven, “Air of excitement.” When you walk into a Container Store, do you somehow try to convince yourself that you just have to have everything in sight? Well, that is exactly the way Kip Tindell wants you to feel. First impressions are everything in the retail business. When a potential customer walks into a store, the retailer wants them to have a good first impression. They want to make the customer feel welcome and excited about buying something. In his book, Tindell quotes a customer who tweeted, “Going to The Container Store is better than a trip to Disneyland.” Based on this, it is safe to say that principle number seven is successful.
Kip Tindell loves what he does, and when he spoke at the Newman Center, that was clear. The Container Store is a place that people never would have through to be so successful, and all of that success is thanks to the culture and atmosphere that Tindell created. He exemplifies everything he stands for, and it shows. The Container Store started as most start-ups do, and is now a publically traded company on the New York Stock Exchange. Albeit so much success, The Container Store will continue to exercise the seven principles that make it so great.
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