James Sinegal cofounded Costco in 1983 and served as the retail chain’s leader and CEO until his retirement (to the board) at the end of 2011. Sinegal grew up in the retail world, starting his career as a grocery bagger where he fell in love and became forever committed to the business.
Sinegal’s business strategy for the top warehouse-club retailer is marked by his voluntarily low salary (compared to other CEOs) while making sure employee compensation was in the top percentile for comparable jobs in the market ($40k annually for legacy cashiers). In general, his business philosophy was to provide high quality at low prices, keep an open door policy throughout all levels of management, and essentially make every decision based on the long game without considering what the short-term gains might be. It worked.
Technology is important and so tends to steal the spotlight, but we don’t want to forget that sometimes the best business advice comes from getting back to the basics of retail strategy. These quotes from Sinegal can easily be applied to any business’s long term strategy:
“The one constant is value. Value is appreciated no matter where you go.”
“If you’re a big-picture guy, you’re not in the picture. Retail is detail.”
“We only have one bullet in our gun: the right product at the right price.”
“I think the biggest single thing that causes difficulty in the business world is the short-term view. We become obsessed with it. But it forces bad decisions.”
“When employees are happy, they are your very best ambassadors.”
“Paying your employees well is not only the right thing to do but it makes for good business.”
“If you’ve got to work for the rest of your life, you’d better do something you’ll enjoy.”
“In the final analysis, you get what you pay for.”
“You have to take the shit with the sugar.”
—James Sinegal, Co-founder of Costco
