Costco is Winning With its Connection Culture

Costco taking the title of Forbes magazine’s best largest employer in the US represents what’s possible for other businesses. For the last three years, the bulk goods retailer hasn’t fallen below third place – it provides a model corporate culture that other organisations could use as a cornerstone to emulate – it’s called “Connection Culture.”

What is Connection Culture?

There are three types of corporate culture an organisation generally creates:

1) Culture of Control: where employees feel controlled or micro managed;

2) Culture of Indifference: where employees feel the people they work for don’t really care and see them as a means to an end; and

3) Connection Culture: where employees feel connected to their leaders, supervisors or managers.

Diving further into the “connection culture” that Coscto has developed – Costco has created a culture where its staff inherently feel connected to its leader/s – when this happens, they thrive not only individually, but collectively.

So, how does Costco achieve connection culture?

Costco creates a connection culture in its organisation by its leaders communicating the inspiring vision Costco has to all staff, it values its people and it gives them a voice.

Communicating the Vision

“Culture isn’t the most important thing, it’s the only thing.” – Jim Sinegal, founder of Costco.

The vision of Costco is to assist people to make ends meet, help its consumer and businesses to be more efficient and serve customers better, as well as being a positive force for the communities wherever its warehouses dwell.

Costco’s mission statement:

“Costco’s mission is to continually provide our members with quality goods and services at the lowest possible prices. To achieve our mission we will conduct our business with the following Code of Ethics in mind:

  • Obey the law
  • Take care of our members
  • Take care of our employees
  • Respect our vendors”

Costco is famously known for “doing the right thing, even when it hurts,” and at the core of its company values is ethics, which is actively promoted and lived accordingly by its staff. The company treats its employees like family and actively lives out its aspirations, earning it a stellar reputation for not only building a loyal employee base, but also a level of customer loyalty envied by other retailers.

Value People

Value among staff exists when employees are treated like people, rather than a means to an end. Costco values its people by investing in them. Compared to other larger retailers, the company is generous in its staff compensation and the benefits it provides, as well as career progression within. It’s not uncommon to hear that Costco’s senior executives started out working on the front line of its warehouse or customer service. The job security the company provides translates well into strong employee loyalty.

In 2004, The Wall Street Journal criticized Costco for paying its staff too much, but Costco didn’t cave in – it continued to operate in its best long-term interests by giving raises to its staff. Even during the economic downturn, the retailer continued to give raises, but not without rolling up its sleeves to work smarter and harder. There were no major jobs cut though.

A word you will often hear at Costco to refer to its staff is “family” – using intentional language, attitudes and behavior to make its people feel this way.

Costco has relatively low staff turnover numbers, and in turn, its longtime staff members develop friendships with each other, a factor which has been shown to boost employee engagement and performance.

Giving People a Voice

Costco strengthens its connection culture with its staff by giving them a voice. The retailer embraces an attitude of humility and honesty as well as encourages its staff to voice their ideas and opinions in order to improve efficiencies and operations. The company tracks employee ideas implemented, including estimates of the economic benefits associated with each. The retailer highlights these and other achievements by staff – celebrating improvements helps again reinforce the voice of the employee and boosts connection culture.

 

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