When Sinegal’s college presented him with its Most Distinguished Alumnus award, the Costco founder was almost left speechless. “I’ve never been told I’m a most distinguished anything,” was all he could say. With his poor grades and lack of focus in high school, it is doubtful that Sinegal’s teachers ever thought he would amount to much. But, today, with a billion dollar corporation under his belt, Sinegal remains not only one of the most accomplished, but also one of the most admired and liked CEOs in the industry. How did this once reckless young boy become the success he is today?
Respect: Being a Costco employee is nothing to shrug your shoulders at. With one of the highest pay rates in the industry, and an overly generous health package, Sinegal has established a one-of-a-kind human resource management plan. In doing so, he has also lowered his rates of turnover and theft, and created a thousands-strong army of motivated and productive employees.
Value: For the past 18 years, Costco has charged $1.50 for its famous hotdog and soda deal, and Sinegal promises that is something that will never change so long as he is in charge. While not all of its product prices are guaranteed to remain the same for so long, Sinegal has made it his priority to give his customers the greatest value for their money. By keeping a low stock of high quality products, and refusing to hike his profit margins by more than 14 percent, Sinegal has stayed true to his goal.
Technology: It may not be one of the industry’s most hi-tech companies, but Sinegal has made sure that where it needs to be, Costco is at the forefront of technology. By embracing new forms of automation, and being willing to experiment with energy-reducing technologies, Costco has emerged as a technologically savvy retail leader.
Communication: “This is almost like show business,” says Sinegal. “I mean, every day you're opening up and it's show time.” Sinegal loves his job, and that is why no matter whether you are a cashier or a fellow CEO, he is willing to take the time to talk to you. A down-to-earth businessman, Sinegal makes sure that all the processes are in place to maintain a corporate system of accountability and openness.
Marketing: Is it odd that despite not ever spending a dollar on advertising, marketing is considered one of Sinegal’s success factors? Well, despite the lack of money spent on it, Sinegal knew what he was doing in terms of promotion. By creating a happy and loyal team of workers, and focusing on growing strong relationships with small businesses, Sinegal did, in fact, create a marketing machine in Costco.
“We’re not kamikaze pilots,” says Sinegal. “We want to do things in a sensible fashion.” To that end, Sinegal has taken the time to plan out his growth strategy. From the light bulbs in his stores to the population densities of the next cities Costco plans to move into, Sinegal leaves no stone unturned. And, it is those details that Sinegal says every entrepreneur needs to focus on. “Otherwise you’re just a hamster running on a treadmill.”
Shopping For Success: How Sinegal Took Costco to the Top
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