How The Container Store attract and retain the best people
In this 5 minute interview, Kip Tindell, Chairman & CEO at The Container Store talks about how he has grown his business using the philosophy “1 great person equals 3 great people” which has led to 20% growth per year since it’s inception in 1978. Kip was speaking to Verne Harnish at the 2015 Fortune Growth Summit in Dallas Texas about the launch of Kip’s new book “Uncontainable” which Verne described as ‘one of the two most important books written by a CEO in 2015’. The Container stores success, which has made Fortune‘s list of “100 Best Places to Work in America” in each of the past 16 years through 2015, is credited by company president Melissa Reiffthe as its devotion to recruiting and retaining a highly qualified workforce. The retailer has stores nationwide and a thriving website, but for Kip, the goal never has been growth for growth’s sake. Rather, his focus is to create a business where very one associated with it thrives by staying true to the tenants of Conscious Capitalism and the company’s values-based Foundation Principles.
The overarching philosophy for people retention at The Container Store is “Take better care of your employees than anybody else and they employees will take better care of your customers than anybody else and customers will take better care of your shareholders than anybody else”. Kip clarifies that he is not an advocate for paying mediocre people but in fact he is an advocate for paying great people really really well. This is because it doesn’t matter what a person makes, what really matters is the connection between a persons cost and the sales they contribute to. This is in keeping with the Labour Efficiency Ratio or LER that we advocate (Direct Labour Cost / Gross Profit) as a measure of productivity.
Kip also describes how at The Container Store each new employee undertakes 183 hours of training in the first year which compares to the industry standard of 8.