Friday, January 20, 2012

Retiring CEO of Costco takes a look back on his legacy

Jim Sinegal
Q: As you look back, are there any things you'd do differently? Any big mistakes?

A: Listen, you haven't got enough space in your paper to print all the errors we've made. But what we like to say is that we're not going to make that same mistake five times.

We decided one time that we were going to get into the home-improvement business. We decided we were going to have a paint department. Most people who have paint have a thousand, two thousand colors. We had four, and three of them were white. The customers yawned and moved on. We learned from that.

We went into the Midwest [Minneapolis and Milwaukee] years and years ago, and we failed. Failure is a very painful process. We had to close those units and we exited the market in as good a position as we could. We offered every employee in our company a job to move with us someplace else. [His assistant, Karen Paulsell, was one of them.] We made sure every supplier was taken care of and paid in full. We refunded every dollar of membership. Even if somebody had been a member for 11 months and their membership was just about to expire anyway, we still gave them the full $25, which was the membership fee at that time.

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