How The Container Store CEO Keeps the World Organized
In 1978 Kip Tindell and his two partners founded The Container Store, which also became the start of the storage and organization industry—an entirely new retail category at the time. But rather than focusing on the product—as innovative as it was—Tindell focused on the people.
Instead of treating employees as replaceable cogs, the company invested more than 260 hours of training in every first-year employee and paid them double the industry average. Rather than trying to undercut competitors, the company built stronger, long-term relationships with its vendors to create products that nobody else could offer. It wouldn’t just sell containers; by helping customers organize their homes and workplaces, The Container Store would help people save time.
And of all the commodities to sell, it turns out that time is a rather important one. It’s no wonder that there are more than 70 U.S. locations and that the annual turnover rate for employees is less than 10 percent—extremely low for a retailer. We spoke with Tindell about his views on conscious capitalism, leadership and being a great salesperson.
Q: In those early startup days, I’ve read that you heard comments like, “You’re going to sell empty boxes? That sounds crazy!” How did you get over those naysayers?
A: We just kind of discounted the naysayers. We never listened to them and spent two years without pay to develop the concept and resources. And in the same way you love somebody, you just have faith and confidence, and it’s not easy for anyone to just tear that down.
I don’t think you can be an effective leader unless you’re optimistic. Having a glass-half-full outlook on things is a prerequisite to being a successful and great leader. In the end, it’s going to be great. And if it’s not great, then it’s not the end.
Q: The Container Store has seven “foundation principles,” one of which is the Man in the Desert Selling—an original approach to sales if you’re not a born salesperson. Why do you think it’s so effective?
A: That was one of the principles that I came up with myself. It’s a really simple, almost corny story. There’s a man lost in the desert, and he stumbles upon an oasis. He asks for a glass of water, which you give him, but what else does he need? He probably also needs to call home, and some food or a hat to protect him from the sun.
I like the philosophy and how it puts the imperative on helping. You can’t help the customer by passively wimping out. Say a customer has a tie rack in one hand and a shoe rack in the other. It’s not a big leap of faith to guess she’s got a closet at home that’s driving her crazy. So if you wimp out and let her get out of there with those two items, she’s still going to have a messy closet. Or you can be brave and compassionate enough to help her organize the entire closet. And when she leaves, she’ll be ecstatic and know the problem is solved.
Every salesperson in America really wants only one thing, deep down—to get through the day without being accused of being pushy. Frankly, I always thought that the more wonderful a human being is, the more they’re concerned about that. People who are just SOBs don’t mind being thought of as pushy. But a wonderful, beautiful, interesting, conscious person doesn’t want to be accused of being a pushy salesperson.
Q: Now that The Container Store is a publicly traded company, how are you able to reconcile that with your conscious-capitalist views?
A: John Mackey, the quirky co-founder and CEO of Whole Foods Market, and I were college roommates at the University of Texas, and we’re both very committed to conscious capitalism. I’ve been on his board for eight or nine years, and I’m lucky to spend time with people such as Herb Kelleher [co-founder of Southwest Airlines]; I’ve learned from those guys and have tried to decide for 10 years whether or not we, as an employee-first company, could go public.
There are many bigger names who want to buy us because we’re a great growth vehicle. But subjecting your team to another management team doesn’t seem right to our culture and people. Looking at other alternatives, going public in a very conscious way was the best option for growth.
So we did an [initial public offering] with a 14 percent direct-to-share program, mostly for employees, when it’s typically around 2 percent. I’m big on getting as much stock in the hands of employees as possible. It’s hard to do that when you’re private, because as much as you love your private partners, they usually don’t want to dilute themselves to give stock to employees.
[Going public] has been terrible, horrible, wonderful and great. It puts everything on a bigger stage. It’s not an exit strategy; it’s more of an entrance strategy. Now we can really make a model that other people can emulate in a consciously capitalist way.
Q: What was it like to be college roommates with Mackey? Were you guys already showing entrepreneurial inclinations?
A: We both were very, very interested in philosophy. He majored in philosophy; my dad wouldn’t let me major in philosophy, so I majored in English, which is the same thing. And we were very idealistic and very into reading. As we got out of school and started building our businesses, we applied a lot of those life philosophies to our business. We’re both really big on the thought that we had to have the same code of conduct in life as we do in business. It’s not acceptable to have a looser morality with business, although you hear it all the time—“You have to understand: It’s just business.” No, I don’t understand. What, you’re going to screw around the people you do business with? No, it’s all life. It’s all part of it.
Businesses are so big and powerful that when businesses are mindful of their wake and take care of everyone, the world becomes a better place. So a guy like Mackey has really increased the life span of the average American by changing what even Walmart sells in their grocery stores, with healthier food, and that’s important to him.
We at The Container Store believe that your life is vastly better if you’re well organized. Everybody’s so time-starved today; we feel we’re improving the quality of life by giving the gift of organization, by saving time and space. The gift of organization is maybe not as important to the world as the gift of a healthy diet, but it’s a lot more important than most people realize.