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Street Talk : The Secret of their Success

Garrett Boone and Kip Tindell, founders of Dallas-based Container Store, have been friends and business partners for more than 30 years. Their business is growing by at least 20 percent each year, the turnover rate is 80 to 85 percent below the retail ind
By Laurie Kline |

Dallas-based Container Store is growing 20 percent a year. It also ranks as the best company to work for in America. What do these guys know that nobody else does?

When soft-spoken, smiley, twentysomething Garrett Boone hired a jocular college student for a $1.60-per-hour position in the paint division of the once-thriving Montgomery Ward department store, he planted the seeds for one of the most successful retail chains in the United States.

Boone and his hire, Kip Tindell, filled out their first timecards together in 1969, stocking and selling merchandise side by side. Those early days of pleasing customers and getting products from shelves to shopping carts glued Boone and Tindell together in friendship—and business.

Thirty-two years later, Boone and Tindell head up the Container Store, a Dallas born-and-bred retail chain of storage and organizational products. With 22 stores across the United States and estimated sales of $272.5 million for 2001, the company is swelling at an average of at least 20 percent each year.

The success can be attributed to merchandising savvy, learning from mistakes, and a belief that people do business with those they want to do business with, a strategy that has worked seamlessly enough to warrant being named—two years running—the “Best Company to Work for in America” by Fortune magazine.

But like all success stories, the Container Store has had its ups and downs. The ’80s brought some trying years, and for the young, vulnerable enterprise, the bungles almost cost Tindell and Boone their business.

The first near-fatal blow came in 1982 when the men made the switch from a manual inventory system to a computerized system. Boone knew they were headed for disaster when they realized their hired consultants had left a “string of businesses hanging by their fingernails because of the bad job they’d done.” With the fees for the changeover costing eight times the original estimate, the duo didn’t have enough cash to pay vendors. “We went through nine months of pure hell,” says Boone, CEO. “In 1983, we had no inventory system at all and we were doubling our size in terms of stores. It was like flying a plane through mountains with frost on your windows. It was the only time that we’ve ever been life-threatened in our business.”

There were, of course, other difficulties—trademark issues, finding store real estate in a tight market, and the problem that didn’t really seem like a problem at the time: too much growth too fast.

In 1988, with the launch of the Houston store, sales outpaced employee capabilities—specifically, handling the sheer volume of customers. Suddenly Boone and Tindell needed more employees to keep up with customer demand.

Back then, we thought we were opening another store like the store we had,” Boone says. “Turned out it was unlike anything we’d ever had. The volume was two to three times higher. We couldn’t get the trucks out, we had to fly people down, and we didn’t have enough people to run the store by a factor of at least 50 percent.”

As a result, they hired the wrong people: those who were looking for a retail job rather than this retail job. “They didn’t have the same team spirit—the energy and the feeling that they were a part of something really good,” he says.

Although sales didn’t suffer, Boone and Tindell realized they needed a set of principles for employees to adhere to. And they also realized they had to take the necessary time to hire that one “great” person.

“One great person is equal to three good people,” says Tindell, the company’s president. “If you truly believe that, then you can afford to pay that great person twice what someone else might. Then everybody wins: the company is getting three times the productivity at two times the price, and the employee gets paid twice what someone else might pay them. And, most important, the customer wins because they get a person who’s motivated and knowledgeable.”


Is Something in the Water?

The all-for-one-and-one-for-all culture of the Container Store can’t be manufactured—unless you throw in a mantra, sleep deprivation, and hours of forced marching. Employees want to come to work; they want to make their daily goals; and they want to wear those bright, blue aprons.

Fortune’s “Best Company to Work For in America” award was handed to the Container Store after a random sampling of 250 employees revealed the culture of the store is one where “people care about each other,” which is the number one reason the Container Store only has a 15 to 25 percent employee turnover (the retail average is 100 percent). Employees who don’t fit the bill are the ones, says Boone, who either won’t accept a teamwork environment or are looking for a traditional retail hierarchy.

Container Store employees are happy—rapturous, even. One said he doesn’t care about his paycheck. Another said her friends are tired of hearing how great her job is. And a third one said the only job he’d like better involves suntan oil and a beach in the Bahamas.

“When I’m in the store, it’s a very positive experience,” says Kenneth Deal, inventory coordinator at the Plano location. “Everybody’s glad to be here. That starts filtering into your personal life. Anything you go out and do is very positive and enlightening. Especially when you’re shopping—you can appreciate how good it is here.”

Creating a “good” work environment means including employees in key decisions, everyday business practices, and expecting them to use their own judgment to solve problems.

To illustrate, Audrey Keemer, the Container Store’s public relations supervisor, cited a recent event in the Chicago store. While loading a product into a customer’s car, the item ripped the fabric on the seat. Without question, the employee pulled cash out of the register and reimbursed the woman on the spot. “[The customer] was so flabbergasted,” Keemer says. “She came back a year later to interview for a job.”

While it may seem strange to most retailers to allow employees to hand over the hard-earned money, Tindell and Boone believe that, because they’ve hired that “great” person, they’ve also hired good judgment.

“To empower employees to that degree,” says Keemer, “takes a lot of bravery.”

Retail Isn’t a Dirty Word

When you think “retail,” the image that comes to mind is of a furrow-browed, underpaid cashier carelessly shoving purchases into paper bags and smacking gum while complaining about having to wait until 3 o’clock to eat lunch.

And then there’s the reality of retail at the Container Store. Employees are quick to greet customers. They converse with them. And they don’t sell on a commission basis.

The Container Store boasts above-industry standard pay—about 50 to 100 percent higher than the retail pay average, according to the company—which translates into a beginning part-time salary of $9 to $10 per hour and an average full-time pay of $15 to $17 per hour, as well as benefits to all full- and part-time employees, excluding seasonal workers.

In addition, the company has a 41 percent recruiting rate. And, as Boone explains, recruiting customers means employee loyalty. “Who better to work and help other customers than someone who’s shopped in our store for years, loves the store, and loves the people?” he says.

Working at the Container Store is also attractive to employees because the company offers flexible shifts, allowing college students to earn some cash in between classes, as well as “mom and dad” hours of 9 a.m. to 2 p.m.

“Our goal is to never run an employment newspaper ad,” Tindell says. “We still resort to that, but less and less.”

Business How-To

After spending time with the employees, it seems that running a multimillion-dollar company could be a cinch—if the management did it like Boone and Tindell. So why don’t they?

“They don’t want to give up control,” says Dave Steinberg, store manager at the Collin Creek location.

Maybe it’s because managers don’t want to take the time to hire quality employees. Maybe it’s because managers don’t believe in getting their hands dirty by stocking merchandise or carrying products to customers’ cars like Tindell and Boone do. Or maybe it’s because they just don’t think retail can ever be any better.

But employee after employee at the Container Store said the same thing: there’s little, if anything, that could be done to make their work lives better. They’re already exactly where they want to be.

“If I ever had to leave the Container Store, I’d have to work for myself,” says Deal. “I guess I’m spoiled. People treat you the way you want to be treated. That’s what it boils down to. I know over the past five years I’ve worked here, I’ve grown. It’s incredible to see the changes that happen to you every year.”

From their initial partnership three decades ago in the tiny paint department, Boone and Tindell have endeavored to make work more like play.

“There’s such a great team effort,” Boone says. “Everybody’s reinforcing each other and trying to do a better job every day.”

Laurie Kline is the editor of Texas Technology, Colorado Technology, and Illinois Technology magazines.

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