A culture of wisdom
Sharon Lobel, a professor in Seattle
University’s Executive Leadership program,
which emphasizes ethics and social responsibility—two Costco driving principles—has
seen more than 30 Costco executives graduate from the program since 1999.
“Everyone quotes [Costco CEO] Jim
Sinegal,” observes Lobel, “saying ‘80 percent
of management’s job is to teach, teach, teach.’
That impressed me, because ‘teach’ is important enough to repeat three times.”
When warehouse managers from all over
the Costco world were polled as to what topics
they wanted addressed at the annual managers
meeting, teaching was key. “As a warehouse
manager,” Lobel notes, “you’re responsible for
growing the future of Costco.”
Professor Lobel notes that many businesses support employees in continuing education, offering tuition assistance or allowing
time off for course work to enhance an employee’s skills. “But it’s another thing,” she says,
“to say, ‘Teach, teach, teach.’ That’s unique!”
Passing it down
Those making the buying decisions—vice
presidents (VPs), general merchandise managers (GMMs) and buyers—bear considerable responsibility for the knowledge necessary
to offer quality and value to members.
Parameters may change from department
to department, but as Jeff Lyons, Costco’s
senior vice president of fresh foods, sums up,
“it’s mandatory that buyers and assistant buyers learn what impacts the market.”
Costco’s buyers immerse themselves in
their products, researching their markets, visiting trade shows and suppliers, sharing
information, achieving a high level of expertise. They often have to be prognosticators,
understanding market factors well enough to
be able to predict where prices might be six
months down the road.
“Buyers need to continually study The
Wall Street Journal, the Internet, their individual industry and have a complete understanding of supply-side economics,” Jeff says.
From lecture to lab
Costco buyers are constantly on the move.
Nancy Griese, VP/GMM of corporate food
and sundries, recently returned from a nine-day wine-tasting trip to Argentina and Chile.
“Every couple of years, we’ll go somewhere in
the world,” she says. “We’ve been to Bordeaux
in France, Tuscany in Italy, Australia.
“You can’t learn about different regions
sitting at a table. You have to go out and experience to understand why the wines are the
way they are, coming out of the Old World or
the New. Once you have a better understanding, you can make better choices.
“In addition to sampling hundreds of
wines, we learned how to prune vines after
harvest,” Nancy adds. “We’ve worked in the
vineyards and wineries, learning firsthand
how the wines are made, learning about the
soil and the climate.” Buyers have climbed
into tanks, shoveling out pomace (grape
skins), and performed other tasks.
In addition, buyers take numerous trips to
domestic regional wineries and trade shows
throughout the year. Liquor buyers also study
Jim Sinegal saying
‘80 percent of man-
agement’s job is to
teach, teach, teach.’ ”
with the Wine and Spirits Education Trust.
Hands-on education extends to other
disciplines as well. For instance, sundries buyers attend a “laundry college,” working with
laundry manufacturers to understand the
science behind what makes a better laundry
detergent. They spend time in the labs and
touring the production facility. All buyers
make trips to suppliers, from time to time, to
learn firsthand how the products are made.
Costco’s philosophy, says Judith Logan,
a Costco assistant GMM, strives, ultimately,
“to have buyers who are better educated in
their products than the suppliers who sell
them, to see through the marketing speak
and offer the best value possible.”
Creating the curriculum
Industry safety and quality standards are
often exceeded by Costco, and employees
must be trained accordingly. Among those
standards is food safety. “Costco is used as a
bellwether for other companies,” says Craig
Wilson, assistant vice president of food safety.
“We take the most difficult standards and add
to them. Our standards are much higher than
“Employees working in any food area are
required to go through Costco food safety
training. Over the years we’ve developed a
Costco-dedicated program, meeting and
exceeding all local, state and federal regulations. It’s a very significant course, and all
employees have to prove proficiency through
a nationally recognized test to be truly certified.” Costco training is approved by the
American National Standards Institute.
When it comes to food safety, just training employees is not enough. Craig adds,
“Costco also works with suppliers to educate
them on Costco requirements and ensure
they meet Costco specifications.” This theme
was consistently echoed by others interviewed
for this story.
To make training easier and accessible for
all employees, an online learning center called
Costco University was developed, featuring
virtual classrooms, e-learning courses, certifications and training manuals. Each department develops its own curriculum by utilizing
internal subject matter experts or outside
Eileen Brown, manager of e-learning
development, and Craig Crandall, business
analyst, see more online training as a trend.
“Studies show,” they explain, “that students who take traditional classroom courses
are lucky to retain 30 percent of what they’re
taught. But with multi-sensory e-learning
courses, retention rates exceed 70 percent.”
Certifications and licensing
Some areas of Costco require external
certification and licensing. Here’s a look.
Gas stations. Gas station regulations
greatly vary state by state and may require
certifications for factors such as air pollution
control, underground storage, safety, etc.
“Costco has its own certification test that
every employee who works in a Costco gas
station has to pass,” says Tim Hurlocker, director of gas stations. “In some places we have
specific in-house training, or they’re sent to
outside sources for the necessary education.
Where most companies call in third parties to
deal with regulated issues, Costco puts every
gas station supervisor through training and
certification for the state in which they work
so we can have the expertise available on-site
Hearing Centers. A nationwide shortage
of licensed hearing professionals has led
Costco to establish its own program to train
from within. “Our goal is to have Hearing Aid
Centers in every warehouse,” says Tammy
Clark, Costco’s director of training for the
Hearing Centers. “We can’t do that unless we
have qualified personnel to staff them.”
Selected candidates study online courses
and are paired with licensed mentors for