I was reading today about Kip Tindell, the 61-year-old Chairman and CEO of The Container Store. He started out in 1978 with two friends and a whopping investment of $35,000.
Today The Container Store has 6,000 employees, 67 locations in the US and annual sales of nearly $800 million.
Mr. Tindell believes a key reason for the success of the store is what he calls their 1 equals 3 hiring philosophy:
‘1 Equals 3’ is our hiring philosophy. One great person equals three 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!
I think that’s an incredible philosophy!
It might take us a bit of time to groove in that kind of approach to hiring, but get the idea of having only GREAT employees.
I should point out one other thing Mr. Tindell said:
We’re talking about business productivity. Of course, no one person is better than another person as a person. But if you can, why not hire great people? And you can pay them twice as much and still save, since you get three times the productivity at two times the cost. They win, you save money, the customers win, and all the employees win because they get to work with someone great. These people are the best in the industry, and I can’t wait to get up in the morning and work with them.
I love hearing how successful business owners make their way through the hiring process.
What do you think? Is this something you can do?
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