CEO, The Container Store
Considering today’s dynamic retail landscape, what is the most significant opportunity for The Container Store to continue its growth and leadership position in the marketplace?
People often ask, “How does The Container Store always get ranked as a great place to work (and we’re talking retail), and how can you compete against the mass merchants and all of the knockoffs you’ve seen over the years. How do you sustain and nurture your culture as you get bigger and now are even public?” My response always points to the culture and our Foundation Principles. We trust that the most sophisticated investors understand that our culture is what drives the value of our business—yes, the culture. In all that we do every single day we keep a laser-like focus on developing and nurturing our culture.
One of our greatest hopes is that the practice of simultaneously taking care of everyone connected to a business, operating from a purpose beyond profits and leading with consciousness—what we, along with other companies, thought leaders and academics call Conscious Capitalism®—becomes the preferred and most accepted way of doing business. It will prove that the economic imperatives of corporate success aren’t incompatible with doing the right things. It’s not a zero sum game. No one has to lose for the other person to win. You can make decisions based on love and succeed.
The Container Store refers to itself as an “Organization with Heart.” Describe how you established your company principles and the significance of having these tenets in place to guide the brand.
Our business is structured around some very basic and fundamental values and business philosophies about treating employees, customers and vendors with respect and dignity—we call them our Foundation Principles™.
They were formalized in 1988, after we opened our Houston store. That store made us take a look at our business a little harder. From the day we opened the doors, the store did more business than we ever anticipated, which became quite overwhelming to our Houston store employees.
So I referred to a file I had started many years ago called my “philosophy epistle file” where I’d put various anecdotes, musings, and philosophical phrases that I admired beginning in high school, through college, and up to this time in the business. I chose many examples to communicate the message that no matter how big the company became, its guiding principles and values would stay the same, and over the years these were condensed into our Foundation Principles™.
By understanding and supporting these principles and philosophical guidelines, everyone can respond in unison to similar circumstances. In other words, they act as a unit, all working in the same direction toward the same goal. Retail is far, far too situational to attempt to achieve a concerted effort through inflexible rules and policies.
So, instead of using the typical phonebook-sized retail procedural manual to guide our decision-making, we use our Foundation Principles™ to keep everyone on track, focused, and fulfilled as employees. With this combination of values-driven business philosophies and a one-of-a-kind product selection, The Container Store’s goal is to become the best retail store in America.
Employees are a critical element of the brand experience. How does The Container Store ensure that its team members enhance customer interactions with the brand? What can other companies learn from your approach?
Our hiring philosophy is “1 Great Person = 3 Good People” in terms of business productivity. We have to be selective when interviewing potential employees because of the brand promise we’ve made to our customers to provide exceptional customer service.
We hire only about 3% of all who apply. If you indeed believe that with one great employee, you get three times the productivity of a good employee, you can afford to extensively train them and communicate to them, empower them and pay them 50 to 100% more than what other retailers might pay them.
Our 1=3 employees have tremendous tenure with the company. They feel like owners of the company and strive to do what’s right for each other and our customers every single day.
It’s a win-win-win. Employees win because they’re getting paid twice as much… and what a delight for the entire team to work alongside other great people! The company wins because it gets three times the productivity at two times the payroll cost. But most importantly, customers win with extraordinary service!
Our customers don’t just like The Container Store—they say they love us. It’s the ultimate achievement in building a brand when the people associated with it don’t just enjoy the brand, they somehow feel a part of it.
How does your corporate citizenship strategy impact the partners your brand collaborates with?
The statement “Fill the other guy’s basket to the brim. Making money then becomes an easy proposition” has become a Golden Rule of our company—it’s our business philosophy. The Container Store has been successful in creatively crafting mutually beneficial relationships with our vendors by doing everything possible to truly ‘‘fill their baskets to the brim.’’ We know that in return, they will support us and assist in our success as well.
These relationships are limited only by imagination and determination. It’s all of the little things and the big things that we can do for and with our vendors to help them succeed.
There are too few people who believe you can build your organization this way and be successful. Some businesspeople think the J.R. Ewing way from the TV show Dallas is how to do it. They believe you have to “burn” the other party in order to succeed. We don’t believe that. We know that crafting mutually beneficial relationships with our business partners works, and it has been a successful approach for our business since the very beginning.
How is The Container Store leveraging digital technology to add value to the shopper journey, both inside and outside of the store?
We want our customers to be able to shop with us however they like—in our stores, online, via social media, you name it. So we’re constantly working on ways to connect with our customers in new ways. We’re currently piloting a customer engagement program in California, called POP: Perfectly Organized Perks, and expect to roll it out across the company later this year.
We’re also always looking for ways to empower and inspire our retail staff with technology, and we’re currently testing wearable tech designed to improve communication within our stores.
And we just love our Click & Pickup service! It allows our customers to shop online and pick up their products in our stores at a time that’s convenient for them—even if it’s within the hour. And in most stores, we’ll bring their product out to their car. So think of someone running home from work or a mom with three kids in the car—we make it that much easier for them to get started on their next organization project through this service.
What’s on the horizon for The Container Store that would surprise us? How do you see the brand continuing to innovate in the future?
I’m excited about the work we have ahead of us—whether it’s in the stores that are yet to be built or in the products of the future that will continue to help our customers save space and time. We’ll continue to create boundless opportunities for our employees, and they will be enriched by working with other inspiring, fantastic colleagues. We will continue to work closely with our vendors, building our businesses together—and we will have customers continuing to dance in their closets with delight. All of our stakeholders will enjoy The Container Store’s purpose in action.
We’ve come a long way over the last 35 years—from my dad’s friends scratching their heads about us opening a store that sells “empty boxes” to originating and now leading the storage and organization category of retailing to being at or near the top of Fortune magazine’s “100 Best Companies To Work For” the last 15 years in a row (we were #1 twice). We’ve been one of Oprah’s “Favorite Things” during her farewell season. But our heart and soul, our devotion to operating a conscious business has never wavered. It’s what makes The Container Store matchless—and something I’m excited to say continues to strengthen with every step we take in our extraordinary journey.
We will continue to innovate, trailblaze, astonish, and thrill. And we will continue to work hard and create opportunity for everyone associated with our business. But, if the RPM needle ever gets in the red and our precious, yummy culture is in need of a bit of a hug, we’ll stop and give it the love it deserves and needs—for love is what The Container Store’s past, present and future is built on.
What advice would you give to other brands that hope to embrace corporate citizenship?
That by operating in a conscious way, you’ll not only enrich your life and the lives of everyone you do business with, but that this is the way to build the most financially-successful business. And profits, as we know, aren’t bad. Without them, we can’t properly take care of our stakeholders—we can’t do all we need to ensure that our “wake”– like a boat’s wake—is far and wide and we can’t build an organization where everyone—and I meant everyone—associated with it can thrive.