In the world, there are some companies that are large and well-known, and the words and actions of their leaders are also highly scrutinized by the media. Especially how they manage the company’s direction or maintain successful experiences, as well as their hopes and views on working with employees. So, what kind of employees does the renowned American retailer Costco and legendary investor Buffett like?
Costco’s CEO Ron Vachris leads a company with over 900 stores worldwide and approximately 341,000 employees.
In November, the 60-year-old company leader said in an interview with “U.S. News & World Report” that his most important leadership experience was actually learned over thirty years ago when he was only responsible for one store. “That period was when I truly improved my leadership skills,” Vachris recalled his experience managing a Price Club store for the first time in 1992.
He specifically mentioned that he learned the importance of “having talented people around, placing them in suitable positions, and truly engaging in strategic thinking” during that time.
Costco co-founder Jim Sinegal saw Price Club founder Sol Price as a mentor. The two companies merged in 1993.
Since Costco was founded in 1983, Sinegal has always emphasized the importance of hiring honest and passionate talents, treating these employees well with generous compensation and ample opportunities for advancement.
“It’s actually simple. This is the right way to do business. When you hire excellent talents, provide good jobs, generous compensation, and opportunities for career development, good things naturally happen,” Sinegal said in an interview with “U.S. News & World Report” in October 2009.
In January 2024, Vachris became the third CEO in Costco’s history. In April, he told “The Wall Street Journal” that as CEO, he is still focused on maintaining the “company culture”. He reminded Costco store managers to hire new employees who they believe have the passion and ability to advance like him and other company executives.
He added, “You’re not hiring the next cashier, nor the next cart pusher, but the next store manager… You’re hiring our future.”
“The Economist” reported in February 2024 that Costco is known for paying higher average wages compared to its retail industry competitors, helping the company maintain a single-digit employee turnover rate, far exceeding other companies in the industry.
Vachris believes that another factor is that besides himself, several executives started from grassroots employees. “Everyone has a chance,” he told “The Wall Street Journal”, “Look at who is leading the company now. We all took steps from the bottom. When people see that we all have opportunities, they understand that we provide career development, not just jobs. Retaining talent is crucial for the company’s success.”
Not only does Costco value hiring excellent talents, but legendary investor Warren Buffett also advocates working with “high-quality people” so that their positive traits such as intelligence and ambition can subtly influence oneself.
“The direction of your life development largely depends on whom you work with,” Buffett said at the Berkshire Hathaway annual shareholders meeting in May. He added, “You will keep learning, but you won’t just learn how to succeed in business, you will also learn how to succeed in life.”
Billionaire and Kind Snacks founder Daniel Lubetzky attributes his success to hiring people with diverse skills and talents who are willing to provide him with honest feedback, even if it is critical.
“If you don’t have people like this around you, success becomes even more difficult, because you will enter a self-indulgent mode of ‘I’m great’ without realizing your mistakes,” Lubetzky said in an interview with CNBC’s “Make It” program in October 2023.
(This article references CNBC’s report)