Great interview in Fast Company with Costco CEO Jim Sinegal. If you want to increase your odds for success, save the money on consultants and instead learn to lead by these principles, which Sinegal espouses:
- Take the long view. Yes, short-term success can make people rich. But as we're seeing vividly in today's market, it can also make them poor. Better to create something of enduring value.
- Treat employees extremely well. Many companies view labor as a line item on the P&L. Accountants notwithstanding, they should be on the balance sheet, as a capital asset.
- Don't listen to analysts. They have a different agenda than the leaders of the company (we hope). Analysts will try to run your business by maximizing EPS on quarterly cycles. Don't let them. That's a recipe for eventual failure.
- Know and respect your competitors. Some noveau CEO's take pride in ignoring the competition. Big mistake.
- Know your business from the ground up. Maybe the basement up. This can only happen by direct and frequent contact. Managing by Walking Around has never gone out of style, only out of practice.
- Be willing to try new things and be willing to live with failure. I had no idea Costco.com sold coffins. Sounds like a dumb idea to me. Turns out it works.
- Stick to your guns. I'm guessing there have been thousands of temptations for Costco to fudge a little on their 15% in-store margins. The strategy is more important than the incremental opportunities. Many companies have suffered death by pinpricks.
- Be honest. In the long run, it's easier. Plus, you sleep better.
Reading this interview gave me one more reason to like Costco.
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