LUMINARY spoke to Kip Tindell, who is currently the Chairman & CEO of The Container Store. He was presented with Ernst & Young’s prestigious Entrepreneur of the Year award in 1991 and is a recipient of the National Retail Federation’s 1998 Innovator of the Year Award. In 2006, along with wife Sharon Tindell (Chief Merchandising Officer) and Garrett Boone (Chairman Emeritus), Tindell was inducted into the Retailing Hall of Fame and he is a 2009 Junior Achievement of Dallas Business Hall of Fame inductee. Also received the National Retail Federation’s 2010 Gold Medal Award, the most coveted award in retail, given to individuals who have served the industry with distinction and achieved a national reputation for excellence. He serves on the board of Whole Foods Market (WFMI), the executive board of the National Retail Federation as its Vice Chairman and is on the Board of the Baylor Healthcare Systems Foundation. He is a leader and passionately involved in Conscious Capitalism, Inc.
In the following interview, he talks about how he originally came up with the idea for The Container Store, the employee-first culture that he developed, his Foundation Principles and best advice to you.
LUMINARY: How did you originally come up with the idea for The Container Store and what struggles did you have getting it off the ground?
Kip Tindell: Back in 1978, we opened a store offering an exceptional and eclectic mix of products devoted to helping people organize and simplify their lives. In doing so, we originated a completely new category of retailing, that of storage and organization. Our very first store was filled with products that consumers couldn’t find in any other retail environment. They were things like commercial parts bins, wire drawers, mailboxes and popcorn tins, burger baskets, milk crates and wire leaf burners. The product collection was quite unusual, but when used in a home or office, the solutions saved customers space and, ultimately, time. In fact, it took some convincing what would become our first vendors to understand our concept of selling their commercial products in a retail store. And at first, customers were dubious. “A store that sells empty boxes?” they would ask. Many seriously doubted The Container Store would ever make it. But somehow, we had a hunch that time would become more and more scarce. And I bet you would agree it has done so, despite the time-saving technology available at our fingertips. In addition to our time-saving products, we also had an early focus on treating employees and vendors like they would want to be treated and as partners in our business.
LUMINARY: What workplace practices do you feel have attracted the right talent and how would you describe the company culture?
Kip Tindell: We’re an employee-first culture! Yes, we love our customers, but we believe that if we put our employees first, then they’ll take better care of the customers. And when those two are happy, well then wonderfully the shareholders are happy, too! In fact, famous economist Milton Friedman once said “the only reason a corporation exists is to maximize the return for the shareholder.” Well, with all due respect to Milton, at The Container Store we take a different approach. We believe that the job of conscious companies is to balance and fulfill the needs of ALL their stakeholders simultaneously. But for us, we start by putting our employees first in everything that we do. We believe that if we take better care of our employees than anyone else – by paying them better and training them more – that they in turn will take better care of our customers than anyone else. This keeps our customers coming back to see us over and over again, which ultimately benefits our shareholders, too!
This philosophy has been at the heart of The Container Store’s culture since 1978. And it all starts with our commitment to hiring GREAT people! One of our Foundation Principles is that “one great employee is equal to three good employees” in terms of business productivity, so why not hire only GREAT people? Most business people and many retailers have long ago given up on that concept. They just don’t really believe it’s possible to get great people to work on a retail sales floor. We are extraordinarily dedicated to finding and connecting with great talent. And after we hire GREAT employees, we focus on their training and development. The Container Store offers more than 263 hours of formal training for full-time employees in their first year with us — compared to the industry average of about eight hours. Another of our Foundation Principles is, “Intuition doesn’t come to an unprepared mind, you must train before it happens.” Our commitment to providing our salespeople with everything they need to be successful in their careers provides value to employees and customers.
And don’t forget the FUN! Fun is part of the job at The Container Store. Our Air of Excitement Foundation Principle is found throughout our stores, home office and distribution center. Life’s too short to not have fun! Fun is an important part of our culture, our customer service and our work environment. It’s all of this and more that allows The Container Store to enjoy close to a 10% annual turnover compared to retail industry averages nearing 100%.
LUMINARY: What are your seven Foundation Principles and what can other companies learn from the way you practice them?
Kip Tindell: Not only was The Container Store built on great products, but it was structured around some very basic and fundamental business philosophies about treating employees, customers, vendors and the community with respect and dignity — we call them our Foundation Principles. They were formalized in 1988, after we opened our Houston store. That store made us take a look at our business a little harder. From the day we opened the doors, the store did more business than we ever anticipated, which became quite overwhelming to our Houston store employees.
We already had a 10-year-old company with strong values and culture; however, communicating this to an entire store of new employees, most whom never had been exposed to our stores or our way of doing business, was quite a challenge. I struggled with how to clearly communicate our culture so that all the employees in the Houston store would act and make decisions using the same set of values and knowledge as the employees in the rest of the company. In a moment of inspiration, I referred back to a file I had started many years ago called my “philosophy epistle file” where I’d saved various anecdotes, musings and philosophical phrases that I admired beginning in high school, through college and up to this time in the business. I invited the entire Houston store staff over to their Manager’s home and chose many examples to communicate the message that no matter how big the company became, our guiding principles and values would stay the same.
I was so nervous to be sharing all of these ideas that were so near and dear to my heart – but to my surprise they were incredibly well-received by the team! Over the years, the philosophies that I shared that night were condensed into what are now our seven Foundation Principles. By understanding and supporting these principles, we can all respond in unison to similar circumstances. In other words, we act as a unit, all working in the same direction toward the same goal. Retail is far, far too situational to attempt to achieve anything through inflexible rules and policies. So, instead of using the typical phone-book-sized retail procedural manual to guide our decision making, we use these Foundation Principles to keep us on track, focused and fulfilled as employees. With this combination of values-driven business philosophies and a one-of-a-kind product selection, The Container Store’s goal is to become the best retail store in America!
LUMINARY: Can you explain your “golden rule” of business and why it’s worked for you and your business?
Kip Tindell: This really speaks to our Foundation Principles – they’re very much like the Golden Rule but taken to the next level in not even just treating how you’d like to be treated, but treating your stakeholders like you’ve learned and know THEY want to be treated.
LUMINARY: What are the top three pieces of advice to recent graduates who want to start a business someday?
Kip Tindell: 1. Do it NOW! There’s no better time than the present to pursue your entrepreneurial dreams. Once you’re settled into life, maybe with a family, it’s going to be a lot harder to depart from the comfort of a regular paycheck to take the risks you need to in order to create a thriving business.
2. Business is not a zero-sum game. Someone doesn’t have to lose for others to win. Building synergies amongst your stakeholders is where it’s at – that’s when you can create the most value for all.
3. Be mindful of your WAKE! WAKE – like a boat’s wake. Everything you do and everything you don’t do impacts your business and the world far more than you think it will.