“Most businesses take care of their shareholders first. We strongly believed it was employees first ..." - Barbara Anderson
I recently spoke with Barbara Anderson, one of the first employees and a leader at the The Container Store for over thirty years. This company has been a favorite for a long time, partly because they invest 263 hours for each full-time employee's education. This was my first conversation with a founding exec, and I thought I’d write it up.
Check out the wikipedia overview if you don’t know them. The Container Store, which invented a retail category, opened in 1978 and has grown steadily at 22.4%+ annual compounded growth rate to 63 stores today. Barbara told one story that underscored their success. After selling to retail-focused PE Leonard Green in 2007, The Container Store was the only portfolio company to stay in the black and not downsize during the Great Recession. They are a great proof point in the power of investing in people as a competitive advantage.
The conversation underscored a few business design principles I believe in:
I recently spoke with Barbara Anderson, one of the first employees and a leader at the The Container Store for over thirty years. This company has been a favorite for a long time, partly because they invest 263 hours for each full-time employee's education. This was my first conversation with a founding exec, and I thought I’d write it up.
Check out the wikipedia overview if you don’t know them. The Container Store, which invented a retail category, opened in 1978 and has grown steadily at 22.4%+ annual compounded growth rate to 63 stores today. Barbara told one story that underscored their success. After selling to retail-focused PE Leonard Green in 2007, The Container Store was the only portfolio company to stay in the black and not downsize during the Great Recession. They are a great proof point in the power of investing in people as a competitive advantage.
The conversation underscored a few business design principles I believe in:
Learning sells. The Container Store's emphasis on learning came out of sales. In 1978, the only "containers" were marketed for commercial use, and The Container Store's innovation was to match these existing products to applications at home. Upon reflection, I think M5’s learning culture had similar origins. Phone systems and networks had thousands of features and our sales people had to figure out how to match them to business problems. This was real value-added sales. I love the quote, “Teaching is the highest form of selling.”
There is no HR. The Container Store has no HR department! Managers are responsible. M5 outsourced HR until hitting 100 employees, and kept it lean and focused on admin and recruiting after that. I had a direct report run Learning as chief learning officer.
There is no HR. The Container Store has no HR department! Managers are responsible. M5 outsourced HR until hitting 100 employees, and kept it lean and focused on admin and recruiting after that. I had a direct report run Learning as chief learning officer.
| It takes a founder. Container Store never figured out how to calculate ROI on their learning investment. Too bad, I'm still searching for this. They could tell if a program was working or not by the energy it generated. But founders Kip and Garret held the culture together by controlling growth (See Jim Collin’s line about the “20-mile March” in “Great by Choice”). Even when they took on a Leonard Green as a PE partner, they negotiated special provisions to protect the culture. As Barbara said, “Most businesses take care of their shareholders first. We so strongly believed it was employees first, empowering them to have excellent interactions with each individual customer…” |  |
You can only grow the right people. Barbara ran into something that also hurt me. When you’re an employee first company and you are also a growth company you have to balance efforts to grow and develop people with a culture of gracious accountability, so great people understand that they either need to step up or move on. In other words, you can be slow to fire. Eventually, Barbara helped develop an innovative performance review system to help get through this conundrum and establish a more effective balance.
Staff need to know the score. Flow is an excellent old book that lays out the aspects of achieving a “Flow State” in an activity, commonly called “The Zone” in sports. I love this theory of happiness, and speculate that it can be used to great competitive advantage in designing jobs. Imagine a staff of people in "the zone." A key ingredient is getting constant feedback. This drove me nuts at SHOR, where everyone was too nervous about insider trading restrictions to report on progress vs. bonus-able goals. (Hey, Mike Healy, can you imagine a member of the SF Giants not knowing the score until the game was over?) Container Store holds daily morning huddles in each store, and broadcasts updates during the day over headsets.
There were many other great points in our conversation. Barbara is on a mission to continue to build new-style businesses by helping direct the energy of young entrepreneurs through her non-profit www.wildgift.org. She also pointed me to www.consciouscapitalism.com, which was started by Whole Foods and The Container Store's co-founders to foster the principles of this fresh approach to business. This conversation was another data point confirming that the art of business is making progress. Thanks, Barbara!
There were many other great points in our conversation. Barbara is on a mission to continue to build new-style businesses by helping direct the energy of young entrepreneurs through her non-profit www.wildgift.org. She also pointed me to www.consciouscapitalism.com, which was started by Whole Foods and The Container Store's co-founders to foster the principles of this fresh approach to business. This conversation was another data point confirming that the art of business is making progress. Thanks, Barbara!
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