I asked Jim Sinegal, Founder of Costco what advice he gave his CEO successor when he handed over the Costco CEO reigns; "Don't screw this up!", was his response.
I heard Jim speak at Seattle Hub last week and got to talk with him afterwards. What a great growth story...
After launching his first store in Seattle his original grand vision was to expand to 10 stores. 30 years later, with a market cap of $47B and 173,000 employees they have far exceeded that goal with 627 stores world wide.
Costco target 85% of all leadership roles being filled by internal promotions and the reality is much higher. While you could argue they loose some external perspective with a lack of fresh ideas, their pipeline of future leaders ready to be promoted would be envied by many other businesses. They pay well above industry average, (twice the hourly rate of Walmart employees) and have unheard of retail industry employee turnover of 11%. They even have college students who go and get their law degree and return to be their in-house lawyers.
What can you learn from Costco's approach to growing leaders?
- Are you accelerating the growth of your future leaders fast enough?
- Do you have strong successors ready to take on your critical leadership positions?
- Where are your next generation of leaders coming from?
- Have you created a culture where people just don't want to leave?
Here are some of the common responses I get when talking with clients about their future leadership succession. Then comes the surprise resignation and everyone scrambles.
"They will never leave, they love it here"
"I know them well, they are not going anywhere"
"I will be here for many years yet, we don't need to worry about planning for my successor"
What is the one thing you could do today to get ahead of this with your leadership team?
Don't screw it up.