We all knew this day was coming. But even knowing it was coming, didn’t make me feel any less shocked when I heard the news this morning: Jim Sinegal will turn over leadership of Costco to Craig Jelinek on January 1, 2012. In February 2010 I wrote a post to herald the coming changes to the top job at Costco, when Costco announced that Craig Jelinek would take on the role of Chief Operating Officer and President. Obviously, that was the first step in succession planning but Jim Sinegal was still CEO. Well, it seems that after a couple of years of on the job training as President, Jelinek will get the chance to show us all that he can assume the job of CEO at Costco and handle it as wonderfully as Jim Sinegal.
As of January 1, 2012 Jim Sinegal will step down as CEO, however, he will still serve as an adviser to Costco through 2013 and he will also help Jelinek through the transition to his new position throughout 2012. He says he’ll advise when asked but not “meddle or interfere.” How nice would it be to have a boss like that? And of course, he does hope to be re-elected to Costco’s board next year and in the future. Jim Sinegal says that he feels it is the right time for him to step down since he will turn 76 on January 1, and also because Costco has been doing so well.
“This is a positive move for Costco, and I feel very good about it,” Sinegal said. “Everybody says that, and it sounds like a lot of bull, but I mean it.”
Sinegal has been in the CEO job since 1988 when Costco merged with Price Club. After all this time he has gained the respect of business leaders, financial analysts, as well as customers. People just love him because he seems to have an excellent handle on what matters to customers. I think everyone that shops at Costco really appreciates his dedication to customer service, quality products, and offering value to shoppers. And because of this affection for him, it is hard to imagine someone else leading the company. However, the very things that make Jim Sinegal an incredible CEO have, I’m sure, led him to choose the right guy to finally take over for him.
Craig Jelinek has been with Costco in various roles since 1984, so it’s not like he’s new to the company and doesn’t have an appreciation for what Sinegal has created and built. He says that not much will change as far as the direction the company will take because he has the same business values as Sinegal. I do hope that is true and continues to be the case when he’s on his own in the role of CEO. I have faith that Jim Sinegal wouldn’t have tapped him to take over if he weren’t able to handle the job and continue to place emphasis on the right things.
“Jelinek has seriously big, big shoes to fill,” Brian Sozzi, an equities analyst for Wall Street Strategies Inc. in New York, said today in an e-mail. “I would compare it to the torch being passed to Lou Gehrig from Babe Ruth. This is a man who pioneered how we consume goods and services on a daily basis, bringing an entirely new retail model to life.”
That’s one of my favourite quotes and one I so agree with too! Jelinek has a big job ahead of him, but I’m sure he’s up to the task. Luckily, what has been a hard year (or couple of years) for many retailers has been quite good for Costco. During the global recession, Costco has managed to lay off no one (except for seasonal workers but I’m not sure that really counts as a layoff), continued to open new stores, and have managed to have growth in sales. Did you know that 89% of Costco’s members renew their membership each year? And that figure is above 90% for Business members. That is just amazing loyalty and dedication from their customers. But I guess I don’t need to tell all of you that since you probably wouldn’t be reading this blog if you weren’t a huge Costco fan.
So, congratulations to Craig Jelinek on his soon-to-be new position. But of course, we’ll all be a little sad (and apprehensive) to see Jim Sinegal go.
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