The Container Store CEO Engages Employees
March 25, 2010 9 Comments
I often reference The Container Store when discussing the 3rd principle of Experience-Based Differentiation: Treat customer experience as a competence, not a function. Why? Because the retailer heavily invests in its people. Every one of its first-year, full-time salesperson receives about 241 hours of training—in a retail industry where the average is about seven hours. That’s more than 30x the industry average… amazing!
So I really enjoyed a recent interview with Kip Tindell, CEO of The Container Store in the New York Times. He discussed two of the company’s seven foundation principles:
Communication is leadership. So we believe in just relentlessly trying to communicate everything to every single employee at all times, and we’re very open.
One great person could easily be as productive as three good people. One great is equal to three good. If you really believe that, a lot of things happen. We try to pay 50 to 100 percent above industry average.
In addition to these principles, here are some of the other “gems” from Tindell:
We believe that we’re trying to build sort of a mutually interdependent group of stakeholders made up of the employees, the customers, the vendors, the community — and all of those people are interdependent and balanced
We’re big on what we call the whole-brain concept, which is simply trying to eliminate silos. So we probably have more people than we need in each meeting, and we don’t believe that’s unproductive
Also, probably 85 percent of our top leaders are women. I don’t want to get into a generalization here, but guess who tends to communicate the best?
We just beg and plead and try to get employees to believe that intuition does have a place in the work force. After all, intuition is only the sum total of your life experience. So why would you want to leave it at home when you come to work in the morning?
My take: One of my 6 Laws Of Customer Experience is that “Unengaged employees don’t create engaged customers.” The Container Store appears to fully understand what many companies don’t even recognize: Customer experience is inextricably linked to employee experience. But it’s not about an altruistic commitment to employees.
By focusing on employees, companies can establish what I’m calling the Employee Experience Virtuous Cycle where they end up with more loyal customers, stronger financials, and more engaged employees.
The bottom line: Has your company established this virtuous cycle?
About Bruce Temkin, CCXP
Customer Experience Matters® 
Great read! I work in the social profit arena and if the word donor is inserted in place of customer this works for that sector as well.
Great post!! As Larry Wilson has pointed out, people want to be proud of the company they work for (with?). You and Kip Tindell are right on in advocating engaed employees whose participation is sincerely valued.
Love the comment about one great being equal to three good. Absolutely true.
There has never been a better time to recruit great people. If you want to truly enhance your customers’ experience, surround yourself with great. They are your only true point of differentiation.
I was a convert until I saw the arrow between low employee turnover and strong financial results. That causality doesn’t make sense. (e.g. governments typically have low employee turnover but many would argue with the quality of their output).
However, when you place the bubble between “proud employees” and “engaged employees”, I’m a believer.
There are 3 forms of capital, Human, Social and Financial. Most businesses easily recognize financial capital because it is very tangible, in bank accounts, income statements, balance sheets, etc. Human Capital is what the Container Store is growing. It is harder to quantify because it resides within the individual and is not linear… so an organization needs to work to instill this an may not see results until a threshold is reached.
What is really in this story is these guys are focused on long term thinking and not bound by “quarteritis”. Also notice the limited number of stores in the chain. They don’t say this directly, but their expansion is partly driven by the amount of Human Capital they have… only when they have the right people, in the right places with the right skills, knowledge and attitude will they open an additional store.
Hi everyone: Great conversation going on here as we all advocate the importance of employees, and therefore the employee experience. I really like Andrew’s comments on how I “almost lost him” with the employee turnover bubble. Based on his feedback, I’ve slightly altered the wording to say “lower employee turnover” and “prouder employees” because those feedback items are relative.
I didn’t mean to show that organizations with low employee churn have financial results, but those that can lower their turnover compared to their peers are certainly in a better poisition. The cost of finding, training, and on-ramping new employees is very costly and puts a toll on the entire organization.
Dominick’s discussion is right on — Human Capital is often the most scarce resource. I wrote about this in my post Fundamental Flaws In Management Education.
Let’s keep this conversation flowing.
Fantastic article. I, too believe that less is more and allowing a limited selection and better quality will benefit everyone in the long run. Very good article.
Great article! I’m a believer in the concept, and trying my best to put it into practice with my own staff – haven’t had any customer complaints for the last few months so far, hopefully never.
I hope you don’t mind if I use your “Virtuous Cycle” image as a reference to a blog I wrote on a similar topic.
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