Category Archives: Culture

Costco Doesn’t Sell Cheap Toilet Paper

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“There are a lot of companies with low prices,” Curtis began. “But people don’t talk about Costco the way they talk about Walmart.”

“Why the curiosity?” I asked.

“We can debate the low prices, but what they talk about is the people,” Curtis replied. “Why is there such a stark difference in the people who work at Walmart versus the people who work at Costco?”

I nodded. “Tell me more.”

“When I visit, Costco employees seem happier. They’re helpful. They work there longer, turnover is less. Even though the carts are jammed full, the checkout lines move quickly,” Curtis explained.

“How do you know?” I pressed.

“I’ve shopped there. I’ve read stories. Friends tell me the same thing.”

“So, these are observable behaviors?”

“Yes,” he nodded.

“Both companies are in the category of low-cost-provider,” I said. “What’s different about what Costco believes about their team members?”

“Well, I know they pay their employees more,” Curtis was quick to reply.

“If Costco pays more, why isn’t that simply a higher expense? What does Costco believe about their team members that is different?”

“It’s not just about the money,” he stopped to think. “I think they believe that if turnover is less, recruiting costs are less, people gain more experience, experienced people make fewer mistakes, they know the merchandise better, that the total cost of personnel is worth the tradeoff against low wages. That creates a completely different working environment.”

“Do you think that different working environment has an economic impact on other things? Are customers more likely to renew their memberships? Are customers likely to buy more? If that’s the case, then is paying higher wages really an expense or is it just part of their business model? Do customers look at a visit to Costco as an adventure?”
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Premeditated Culture, now available from Amazon.

Independence

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In the United States, we are celebrating our 250 anniversary since our Declaration of Independence. In 1787, Elizabeth Willing Powel asked Benjamin Franklin, “Well, Doctor, what have we got here, a Republic or a Monarchy?” Franklin replied. “A Republic, if you can keep it.”

Stay safe this July 4th. We will see you next week. -Tom

This podcast just dropped.  All about Elliott.
KPI Fireside Chat, hosted by Keith Norris, guest Tom Foster.

Slow and Fast

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“I’m curious,” Millie announced.

“That’s a good mind-frame,” I replied.

“How come every time I get the team together to talk about a new method or procedure, when we are done talking, they go back to the way we did it before?” she asked.

“I assume you got some feedback and agreement at the meeting?” I replied with a question.

“Well, no one objected,” she said. “They nodded. At least they pretended they paid attention.”

“And, they pretended to do things the new way, while going about things the old way?” I smiled. “How long have they been doing things the old way and how long have they pretended to do things the new way?”

Millie pretended to think, but her answer was quick, nodding, “The old way, as far as I can remember. The new way, three days since the meeting.”

“And, so, what is your insight?” I asked.

“I can presume they haven’t had the time to assimilate the new way with the old way. But this change is so different, it’s not a matter of folding in a new method. They have to literally stop doing some old things and start doing some new things.”

“And I assume,” I continued to smile, “that three days is not quick enough for you?”

“Look,” she stared directly, “the new method will be slower at first before it picks up. Once they get used to the new method, it should double throughput. I want to get through the slow part as fast as we can.”

“I appreciate your impatience,” I said calmly. “Sometimes, you have to go slow, so you can go fast.”

This podcast just dropped yesterday, all about Elliott (53:00).
KPI Fireside Chat, hosted by Keith Norris, with guest Tom Foster.

Culture is Not a Poster

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Al Ripley arrived at Outbound Air on a Monday. The teamwork posters arrived the Friday before. He ordered them from Chicago, in the period when Outbound Air was simply the next assignment. One poster showed fifty people jumping out of an airplane holding hands. He used this poster before. It communicated, in a single image, the two things Ripley needed the organization to believe simultaneously, that everyone was in this together, and that they were all in freefall.

Premeditated Culture is now available from Amazon.

Vision and Mission

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Calhoun managed by proximity. He preferred to have his people close, to overhear, to intervene when necessary. He described the publication’s editorial philosophy with genuine conviction.

“We cover the new economy,” he said, “which means we cover people who are building things that have not been built before, where the rules are written as the game is played. That produces a specific kind of story, the founder ahead of the regulation, the protocol ahead of the infrastructure, the valuation ahead of the revenue.”

He leaned back in his chair. “Our job is to find those gaps and report them accurately. We have to gain access to the people inside, which means they have to trust that we will treat them fairly.” He paused. “And we will treat them fairly. Fairly does not mean gently. It means accurately.”

Premeditated Culture is now available on Amazon.

Hiring Talent

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Renata Voss was the firm’s head of recruitment and in her fourteen years conducted, by her own estimate, somewhere between four and five hundred candidate interviews. She sat in a small, dedicated conference room on the interior of the suite, no window, one door, designed to make the candidate feel the conversation was the only thing happening in the building. She developed, over fourteen years, a very precise model of who she was looking for, and a precise intolerance for candidates who did not fit the mold.

Her conversation with Gus opened with standard behavioral questions. “Tell me about a time when a project got stuck? What was the external obstacle? Resolution to the problem?”

Then, she watched him do something novel, not seen in five hundred interviews. Before answering, he leaned forward slightly. “Before I tell you this story, I need to make sure our conversation is confidential. I won’t reveal the names of anyone involved. But it’s important that you don’t share what I’m about to tell you.”

Renata put her pen down. Gus was about to say something that would require her to end the interview.

Premeditated Culture is now available on Amazon.

The Baton Pass

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Pruitt glanced at the other two shareholders with the brief eye contact of a shared understanding. “Documentation discipline,” he said. “Every document is right the first time. Every classification is accurate. Every valuation is current. The customs brokers we use on both sides know our paperwork before it arrives.” He paused. “You’ll want to get to know Carlos. He is our customs broker out of Nogales. He has an office on the US side. It’s his relationship that makes the clearance rate possible. Whatever he needs, he gets it.”

Everyone but Jarrad stood to leave the room. The clock on the wall showed 8:38. Jarrad stood and met their grip like a baton at a relay race. The handshakes were warm, but with a visceral quality of relief, an apology that none of them made explicit. Each finished their segment, it was Jarrad’s turn to be the runner. They escaped what all shareholders escape when they exit. They escaped the routine, the pressure, the obligations. The visible obligations and the hidden obligations now belonged to Jarrad.

Premeditated Culture is now available on Amazon.

Your Talent

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“So, today, I ask you,” Levin said, directing the story to the graduates in front. “Who are you? And where are you going? Not, what are you good at? Or what has been your training? But who are you and where are you going?

“You see, the firms worth joining are not the firms with the best compensation or the most prestigious clients or the corner offices on the highest floors. The firms worth joining are those that understand that beneath the work is a person. Where people are recognized as capable, given work worthy of that capability and held accountable in ways that are fair.” He paused. “The world has plenty of organizations that will take your talent and return you a title. But few organizations will take your talent and return you the experience of having fully used it.”

Premeditated Culture, now available on Amazon.

When You Allow It

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“David,” she said, “you are one of the most capable people in this program. Your work is genuinely good. Your analysis is rigorous when you allow it to be.” She paused. “You don’t allow it to be, often enough, because allowing it means staking a position that someone might disagree with. And you learned, this program taught you, very effectively, that the risk of being wrong in public is greater than the cost of being right in private. So, you seek consensus. You look for permission. You ask people like me what you should do so that when it goes wrong you can escape accountability.”

Premeditated Culture, now available on Amazon.

Tested by Reality

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Folklore has it, the gauntlet was an ancient rite of passage in 18th century France. Each wearing an armored glove, members of the military would stand double line, facing each other, the subject directed down the middle, to receive striking blows from the armored gloves. In an adapted ceremony, tribal lore sent a graduating pubescent male down the line to receive stunning blows from sticks, clubs and rocks. The purpose was not to kill or maim, only to inflict maximum pain. Each participant had once passed through that same gauntlet, branded by the group, now as one of their own.

It was also the opportunity for a hidden rival to lay ambush, exact retribution for a past transgression. The culture of the gauntlet did not punish the ambush. All saw it as a test of character for the brave new warrior.

Premeditated Culture, now available on Amazon.