Go back to San Diego in 1954, a group of local businessmen approach an attorney, Sol Price, looking for investors in a new retail concept: a large warehouse-style store featuring department-store-quality products at lower prices. The idea they proposed was that selling a lot of goods in a no-frills setting could be a new and profitable niche in the retail world. They called the store Fed-Mart, and over the next two decades the company grew into a successful regional chain in the southwest.
A German retailer purchased Fed-Mart with plans to make it into a leading national retailer, but failed. Sol Price, a top manager with Fed-Mart, and his son Robert were now unemployed. Mulling around new ideas, they came up with a membership-based warehouse retail operation and called Price Club. They opened their first store in San Diego in 1976 in an old manufacturing building built by Howard Hughes. Several Fed-Mart managers came to work at Price Club including Jim Sinegal, who started at Fed-Mart unloading mattresses when he was 18 years old.
This bit of history is important to this story because at Fed-Mart, key relationships were formed and a set of operating principles for running the company
were clearly defined and spelled out by their president at Sol Price. They included pricing, displays, policies for handling customer complaints, rules for advertising and more. The very first item on the list: “Customers come first, integrity is the cornerstone upon which we much build consumer confidence that creates customer loyalty.”
A retailer in Seattle was interested in the Price Club model, flew their son Jeff Brotman down to check it out and he came back with glowing reports and there was nothing like it in the northwest. The Seattle group looked for a CEO and chose Jim Sinegal who agreed to manage the new start-up. In 1983, the group scraped together $7.5 million from investors to open their first store in an industrial area of south Seattle.
Fast forward to 28 years as Jim Sinegal announces his retirement as the CEO of the third-largest retailer in the U.S. – Costco. It has $89 billion in revenue, 64 million members with 600 locations including 81 in Canada, 32 in Mexico, 22 in England, 9 in Japan, 7 in South Korea, 8 in Taiwan, 4 in Puerto Rico and 3 in
Australia.
Jim Sinegal ingrained five simple and down-to-earth business principals into the Costo’s corporate culture that made the company what it is today. The following are excerpts of these principals:
On to A New Year
Friday, January 20th, 2012January is one of my favorite months. The feeling of renewal and rebirth that this season brings can be life-changing for so many. For others, especially as we get older, we get stuck back in our grooves.
Why do people as they seem to get older find it tougher to reinvent themselves? To get out-of –the-groove so to speak? Why are the people that are able to reinvent themselves seem to be geniuses that change the world? Ghandi, Nelson Mandela, Muhammad Ali, Madonna, and even Tony Robbins seem to keep themselves relevant through the times when the “norm” is to have “your time, your glory days” and move on.
Steve Jobs had a theory that as people get older, they become more and more engrained in patterns, and these patterns cause them to start to limit their ability to think creatively. The range of their thinking would become smaller and smaller.
These patterns become our groove, they are comfortable and safe, at least we feel their safe. But are they? Is it safe to get grooved in a career, your role in a business, a business model, a certain kind of product or even an economy?
I love working in technology because the very nature of it forces you to turnover old grooves and think in different paradigms almost every day. You can’t get in a groove in this industry. If you do, the world just passes you by…which is pretty much the way it works anyway, right?
What I mean is, are you stuck in an old job groove? an old economy groove? an old business groove? an old relationship groove? or a even an attitude groove?
A new year is not just a new way to date your checks (if you are still stuck in the groove of writing checks, that is). It is the chance to commit to throw yourself into something new. You are not a train, you are built to create, to solve problems, to produce.
You are designed for greatness by your creator. If you are not making the impact of Mother Teresa or M and M, it’s because you are playing a smaller-than image of which you were created. A groove to deep could be your grave or worse yet, the death of your dreams.
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Tags: Business goals, indianapolis small business, New Year's Resolutions
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