Based on your location, you may very well not have one of these unique stores in your area. However, due to its continued success and growth, there’s an excellent chance you’ve heard about The Container Store.
From humble beginnings in a rented storefront with a wooden box for a cash register, Garrett Boone (chairman) and Kip Tindell (CEO and president) opened a small store in 1978 specializing in home organization products, such as wire shelving, plastic shower totes, shoe bags, food packaging, knife and peg racks, and bins. In so doing, they created a new retail category with a first year start-up of just $35,000 and a company that has steadily grown revenues by approximately 25% per year ever since!
Today, it boasts 45 stores in 18 markets in more than 15 states from coast to coast, mostly in major cities in California, Colorado, Georgia, Illinois, Maryland, New York, and Texas.
While these background facts are interesting, they have little to do with the “uniqueness” of this organization. Culture, however, has everything to do with its success and distinctiveness. Let’s take a look at some of the factors which make up this rare culture and the results which have evolved.
The store founders embrace the idea that if you treat your people well, success will naturally follow. Some business owners claim that employee loyalty is directly tied to how good employees feel about their jobs. It’s a debatable concept, but it seems to be working for The Container Store.
It currently boasts more than 3,200 very happy employees. In an industry where 100-percent turnover is common, The Container Store boasts a very low 15- to 20-percent. Forty-one percent of new hires come from employee referrals. It’s also landed the company on Fortune magazine’s annual list of “100 Best Companies to Work For” every year since 1999. The Container Store also received the Retail Innovator’s Award from the National Retail Federation based in Washington, D.C. In addition, it received the Workforce magazine Optimas Award in the category of General Excellence for outstanding people-management strategies.
To achieve the company’s primary goal of providing extraordinary service, each store has a full-time trainer, and all employees receive more than 241 hours of training for employees in their first year—an astonishing feat for a retailer in an industry that usually provides workers with an average of seven hours of training per year. After their first year at The Container Store, full-time employees receive an average of 160 hours of training annually.
Employees at each of the 45 stores use “the huddle,” as it’s officially called, twice a week for 10 minutes, before or after the start of business, for everything from discussing operations to getting fired up about sales. These huddles have evolved into a very effective all-purpose communication tool.
They also symbolize The Container Store’s reputation as an enjoyable place to work: Three times (most recently in 2001), the company has topped Fortune magazine’s list of “100 Best Companies to Work For.” It’s clear that The Container Store’s huddles are so successful because its employees want to be part of this winning team.
One of the most popular ways that employees acknowledge each other is through the celebration mailbox, a voicemail system designed for employees to leave stories about good service experiences they have observed.
Not long after creating the company, founders Boone and Tindell created innovative parameters called foundation principles. They are a set of humanistic, spiritually based, do-unto-others philosophies. These principles are practiced internally among employees and are reflected in how they treat each other and how the company treats them. The six value statements represent a collection of business philosophies and stories that embody how they think a company should be run. Most companies deliver their values statements in a formal document, but Boone and Tindell prefer to dress in costumes to act out the stories. “It helps people remember them,” Anderson says. “We use storytelling to keep our employees focused on our culture. It’s very important to our success.”
The Container Store’s Continuing Education program is a great example of unique employee growth opportunities hosted at the home office. Continuing Education is a three-day intensive training program for career-minded employees from all areas of the company. Each department within the company develops a creative presentation for the Continuing Education class to provide a better understanding of each department’s function. Additionally, participants enjoy a four-hour rotation in the Distribution Center.
Customer service is The Container Store’s core competency, so hiring people who are self-motivated and team-oriented with a passion for customer service is key. Ultimately, this translates into a strong customer-service philosophy that allows all employees to take ownership of the company and make decisions based on their own intuition and discretion. The company strives to astonish its employees, which makes it an easy proposition for them, in turn, to astonish customers.
Looking beyond the minimum-wage concept, The Container Store has taken the bold move of paying employees two to three times the industry average, which cultivates fierce employee loyalty. “Kip and I worked for 18 years very closely on building the structure that allows us to pay more—to think out of the box and devote 10 percent of store sales to payroll,” Barrett says. The industry average is 3 to 4 percent. This goes back to focusing on what the company considers its number one asset: employees.
The Container Store employees enjoy tremendous benefits which most certainly account for their loyalty and low turnover. Those benefits include:
- Security in a financially strong company
- Great pay and exceptional training
- A 40% merchandise discount
- A special 50% discount on elfa, its best-selling product
- Casual work attire
- 401(k) plan with matching company contributions
- Medical/Dental/Vision plan for full-time and part-time employees
Everything puts The Container Store at the top of Fortune magazine’s list of “Best Companies to Work For” year after year.
Based on its continued success and rapid growth, The Container Store may soon be in your area. Regardless, there’s much to learn from this unique and productive culture.