Costco CEO Ron Vacris leads a company with approximately 341,000 employees in more than 900 warehouses around the world.
But the 60-year-old executive told U.S. News & World Report in November that he first learned his most important leadership lessons more than 30 years ago, when he was in charge of just one store. “That’s when I really developed my leadership skills,” Vakris said of his first time managing Price Club’s private warehouse in 1992.
Specifically, he learned “the importance of surrounding yourself with great people and putting them in the right places, and really thinking strategically.” These points align well with Costco’s long-standing culture, where co-founder Jim Sinegal is mentored by Price Club founder Sol Price. The two companies merged in 1993.
Since starting Costco in 1983, Mr. Sinegal has preached the importance of hiring people with integrity and passion for the business, and treating them with generous wages and opportunities for advancement.
“It’s very simple: It’s good business. If you hire good people, give them good jobs, good wages and careers, good things will happen,” Sinegal told U.S. News & World Report in October 2009.
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According to the Wall Street Journal, Mr. Vakris never managed one warehouse at a time for long. After managing two stores in Colorado in 1992, he managed multiple warehouses in Arizona after the Price Club and Costco merger in 1993. Over the next several decades, Mr. Vacris held key roles in Costco’s real estate development and merchandising departments. In January 2024, he became Costco’s third CEO, succeeding his predecessor, Craig Jelinek.
As CEO, Vakris still tries to protect “the culture of the organization,” he told the Journal in April. He cautioned Costco’s warehouse managers to hire new employees who he believes have the same passion and aptitude for advancement as he and other company executives do, adding, “We’re not hiring the next cashier. We’re not hiring the next wheel pusher. We’re hiring the next warehouse manager…We’re hiring our future.”
Costco has a reputation for paying higher average wages than its retail competitors, which has helped the company maintain a single-digit turnover rate well above those of other companies in the industry, The Economist noted in February 2024.
Another factor, Vacris said, was that several other executives joined the company as new employees. “Everyone has a chance,” he told the Journal. “If you look at who’s running the company today, we’ve all been promoted within the company itself. When people see these opportunities available to all of us, they think we’re offering not just a job, but a career. Retention is at the heart of a company’s success.”
Other prominent business figures outside of Costco have similarly talked about the importance of surrounding yourself with quality people. For example, billionaire Kind Snacks founder Daniel Lubetzky attributes his success to hiring smart people with diverse skill sets who are willing to give honest feedback, even when it’s important.
“If you don’t surround yourself with those people, it’s much harder[to achieve success]because you get into ‘I’m amazing’ mode and don’t realize you’re failing,” Lubetzky said on CNBC Make It in October 2023.
Billionaire investor Warren Buffett also advocates surrounding yourself with what he calls “high-quality people” and letting their positive attributes, such as their intelligence and ambition, influence you.
“You’re going to progress in life in the general direction of the people you work with,” Buffett said at Berkshire Hathaway’s annual shareholder meeting in May, adding, “You’re always learning, but not only are you learning how to be successful in business, you’re also learning how to be successful in life.”
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