Jim Sinegal has ended his time as CEO of Costco, but he’s leaving behind a huge legacy of excellent leadership and corporate responsibility. As a result of this he has ended his time as Costco CEO on a couple of lists touting him as one of the top CEOs. I’m sure that is an accolade that we can all agree with, right? After all, he has been a huge part of what makes Costco such a great place to shop at, work at, and own stock in, for decades. He’s been on my top CEO list for years now. I just don’t seem to get as much fanfare when I talk about it for some reason, unlike major business publications; I might need better PR people.
For 2011, Morningstar has named Jim Sinegal as its CEO of the Year. As a major financial data provider, Morningstar is all about the business side of being a CEO, naturally, but they also want their CEO of the Year to be a little bit more than just good with the numbers they are looking for someone showing exemplary corporate stewardship, independent thinking and lasting value for shareholders, and for leaving a legacy in his or her industry. Of course, Jim Sinegal more than fits the bill on all counts there.
The Morningstar article is a great read for those of you that appreciate the effort that Jim Sinegal has put in to making Costco such a success with customers, employees, vendors, and investors. They did a really good job of hitting on all of the high points too. They mention one of my favourite Costco episodes – when they rebelled against Coca-Cola and said ‘we either get fair pricing or we’ll stop selling your products’. I loved that they would stand up for themselves and their customers even in the face of one of the biggest drink product manufacturers. And it worked! That’s how awesome Jim Sinegal is, everyone!
The Morningstar article ends on a note that is what so many of us associate with Costco too: employee respect and loyalty. I’m glad that was the end to their story because it is one of the things that us ‘normal people’ think is really great about Costco, and truly appreciate. Let’s face it, happy employees make for a better run business, and in retail, better customer interactions. Costco wouldn’t be the same if the employees were all surly (yes, I know there are a few of them that sneak in) and the stores were dirty because no one cared enough to keep it tidy, would it? While it might seem pricey to pay employees a decent salary with benefits, in the end the difference in turnover and employee satisfaction makes a huge difference to the bottom line, I’m positive of that.
I think Morningstar could have also mentioned some of the excellent steps that Costco and Jim Sinegal have made in the area of the environment. This is such a hot topic lately, and is part of being a good corporate citizen that I definitely think it merits a mention. I think it is great that Costco uses solar panels to capture energy on its stores in places like Hawaii and California. Why don’t more retailers and corporations do this? They have all of that roof space just sitting there not producing anything and they could be mitigating their impact on the traditional power grid through the use of solar panels; every little bit helps. In addition to that, they have pushed for more environmentally friendly packaging instead of those horrible clamshell things. Those clamshells are horrible for the environment and are also a real hassle to customers. Did you know that people have actually had to make trips to the emergency room because they’ve sliced their fingers open trying to get to the goods trapped inside? Costco also carries a pretty respectable array of organic products now too. There are a few other things that Costco has employed to make their environmental impact a little softer too (like more fuel efficient trucks), so I think it is important to list those achievements as well.
I think it’s a great that Morningstar gave Jim Sinegal the kudos he so richly deserves in his final year as Costco CEO. I will also note that Jim Sinegal showed up as number 22 on the Barron’s list of 30 Best CEOs from around the world. Clearly, I think it should have been higher, but at least they were astute enough to have him on the list.
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