Reference no: EM131669919

Question: TEAMING UP FOR SUCCESS AT THE CONTAINER STORE

The Container Store was not started with a modest goal. Founders Garrett Boone and Kip Tindell set out to become the "best retail store in the United States." Judging by feedback from customers and employees, they just might have succeeded. As millions of frustrated consumers know all too well, though, delivering great customer service in retail environments isn't easy. The Container Store does it with strong company values, respect for employees, and a structure that promotes teamwork over individual competition. The company's values flow from the idea that people are its greatest asset because they are the key to exceptional service. The notion that "people are our greatest asset" is repeated often in the business world and often without substance to back it up, but The Container Store goes to extraordinary lengths to practice what it preaches. The company isn't bashful about saying employees are its number-one priority, either, saying that while business involves "an interdependent set of stakeholders-employees, customers, vendors, the community and shareholders.

At The Container Store, we firmly believe our employee is the #1 stakeholder. In doing so, employees take better care of customers and ultimately the shareholders experience greater benefit from this approach to business." To put employees first, however, the company makes sure it has the best employees it can find. Far from viewing employees as interchangeable parts, Tindell even says, "I choose employees and friends the same way." The Container Store uses a comprehensive interviewing and selection process to find the perfect person for each position, driven by the belief that "one great person equals three good people in terms of business productivity." Most employees are college educated, almost half come from employee referrals, and most have been customers of the store. They are also self-motivated, team oriented, and passionate about customer service. Those traits are enhanced by extensive employee development: New full-time employees receive over 200 hours of training in their first year and nearly that much every year thereafter. In comparison, most retailers give new workers less than 10 hours of training per year.

As a result, employees feel extremely confident in their ability to help customers, and positive feedback from customers continues to build that confidence. The Container Store also pays three to four times the minimum wage, offering wages as much as 50 to 100 percent above those of other retailers. The financial security builds loyalty and helps keep annual turnover at a fraction of the typical turnover rates in the industry. What's more, salespeople are not paid commissions, unlike retail staffs in many other companies. Without the constant pressure to "make the numbers," it's easier for employees to take their time with customers, using their creative instincts and extensive training to design complete solutions to customers' storage problems. By not paying commissions, The Container Store also helps employees sense that they're all part of a team rather than being in competition with one another. That emphasis on teamwork is reinforced twice a day, before opening and after closing, through a meeting called "the huddle." Similar to a huddle in football, it helps give everyone a common purpose: set goals, share information, boost morale, and bond as a team. Morning sessions feature spirited discussions of sales goals and product applications and may include a chorus of "Happy Birthday" for celebrating team members. Evening huddles include more team building and friendly competitions such as guessing the daily sales figures. Tindell believes that full, open communication with employees takes courage but says, "The only way that people feel really, really a part of something is if they know everything." The Container Store differs dramatically from many other retail establishments in the way it embraces part-time employees.

These workers are essential at the busiest times, such as evenings and holiday seasons, but they are treated as secondclass citizens in some companies. Not at The Container Store. To begin with, the company refers to them as "prime-time" employees, not part-time, since these staffers are most valuable in those prime-time rush periods. And these people also receive extensive training and are treated as equal members of the team at each store. As one prime-timer in Houston puts it, "Everyone is treated as an important human being. I don't feel like a part-time employee at all-I feel like a professional. They make belonging easy and a source of pride." By aligning its corporate values with its management practices and its organization structure, The Container Store paves the way for its employees to deliver great customer service. And by frequently astonishing its employees with enlightened leadership, the company sets a strong example for the people in blue aprons who are expected to astonish customers every day. People outside the company notice, too. The Container Store has become a consistent winner in such nationwide forums as the annual Performance Through People Award, presented by Northwestern University, and Fortune magazine's annual list of "The 100 Best Companies to Work For."49 And it all starts with teamwork. As Tindell says, "I think we do team as well as anybody I've ever seen."

1. Based on what you've learned about the way employees at The Container Store interact with customers, do you think that the company emphasizes centralized or decentralized decision making? Explain your answer.

2. How might the company's emphasis on teamwork affect accountability and authority?

3. What effect might a change to commission-based compensation have on the team structure at The Container Store?