You Train Animals. You Teach People.
Sol Price and Jim Sinegal are two of the most influential and successful entrepreneurs in the history of retail. They founded and led Price Club and Costco, respectively, and revolutionized the industry with their warehouse club model, low prices, and high-quality products. They also shared a common philosophy on how to manage and educate their employees: you train an animal, you teach a person.
How did they do it? Here are some of the principles and practices that they followed:
They spent 90% of their time teaching. Jim Sinegal, who was mentored by Sol Price, said that if you’re not spending 90% of your time teaching, you’re not doing your job. They were always on the floor, talking to their employees, sharing their vision, and giving feedback. They also learned from their employees, listening to their ideas and suggestions, and implementing them when appropriate.
They focused on the why, not the how. Sol Price was not a fan of training manuals because he believed that manuals were a substitute for thinking. He did not want his employees to follow instructions blindly, but to understand the reasons behind them. He wanted them to know why they were doing what they were doing, and how it benefited the customers, the company, and themselves. He also encouraged them to challenge the status quo and to find better ways of doing things.
They hired smart people and trusted them. Sol Price and Jim Sinegal did not micromanage their employees, but gave them autonomy and responsibility. They hired smart people who shared their values and vision, and trusted them to do their jobs well. They also rewarded them with competitive wages, generous benefits, and profit-sharing. They treated their employees as partners, not as subordinates.
They taught by example. Sol Price and Jim Sinegal did not just preach their philosophy, they lived it. They were humble, honest, and frugal. They did not have fancy offices, cars, or clothes. They paid themselves modest salaries and did not take bonuses or stock options. They worked hard and expected the same from their employees. They also cared about their employees, their customers, and their communities. They donated millions of dollars to various causes and supported social and environmental issues.
Sol Price and Jim Sinegal were not only great businessmen, but also great teachers. They taught their employees how to think, not what to think. They taught them how to be leaders, not followers. They taught them how to be successful, not just in business, but in life. They taught them like people, not like animals. And that’s why they created some of the most loyal, productive, and happy employees in the world. Wikipedia reports that Costco has one of the lowest employee turnover rates in retail.
I want to thank Sam Malouf for sharing the Founders Club episode #304 on Sol Price. Sam Malouf is one of the premier luxury retailers in the United States, owned by Gloria and Sam Malouf in Burlingame, CA. This store is truly a must-see when you are visiting the San Francisco Bay area. The podcast is a great listen and there are many other valuable takeaways from this episode. I also find the Founders Club podcasts to be very inspirational and motivating, especially for Indie entrepreneurial retailers.
Wishing you all a very happy and profitable holiday season.
Onwards and Upwards,
Marc Weiss
Co-Founder - Management One
You can also contact Management One directly for more information. We are always happy to discuss your results and share solutions for you and your indie retail business.