Magazine article Talent Development

Wholesale CONNECTIONS: Costco's Culture Helps Its Employees Thrive

Magazine article Talent Development

Wholesale CONNECTIONS: Costco's Culture Helps Its Employees Thrive

Article excerpt

Costco recently surpassed Google to earn the title of America's best large employer. To determine the best employer each year, Statista and Forbes survey 30,000 workers at U.S. organizations, asking them questions about their work experience. Costco has consistently appeared in the top three. Clearly, Costco is doing something right.

In early August, I traveled to Seattle to attend a portion of Costco's Annual Managers' Meeting, where I gave a keynote speech based on my book Connection Culture: The Competitive Advantage of Shared Identity, Empathy, and Understanding at Work. (In the spirit of full disclosure, Costco purchased 1,100 copies of Connection Culture for its leaders.)

Recently, I've learned a lot about Costco and have come to believe that at a time when the percentage of engaged employees in the United States is stuck at around 33 percent and American-style capitalism has fallen out of favor in the eyes of many, Costco's culture provides the solution to what ails American business. It provides a model corporate culture that all organizations should strive to emulate.

Is there a best corporate culture?

Culture is a vague concept to most leaders. When my colleagues and I set out to make culture clear so leaders could become more intentional about developing and maintaining a healthy culture, we came up with this simple definition: Culture is the predominant attitudes, language, and behavior of the organization.

* Attitudes are the ways people think and feel that affect behavior.

* Language is the words people use to describe their thoughts and feelings.

* Behavior is the ways people act.

Our research reveals that there are three types of culture leaders and workers need to be aware of. The first is the culture of control. In this culture, most people feel controlled by one of more of the following: autocratic leaders, micromanagement, too many rules, or bureaucracy. The second is a culture of indifference, in which most people feel that the people they work with don't care about them and see them merely as a means to an end. Both cultures of control and cultures of indifference make people feel unsupported, left out, and lonely. With the prevalence of these organizational cultures in the United States, it's not surprising that two-thirds of American workers are disengaged.

The best culture we discovered is a connection culture. In this type of culture, most people describe feeling connected to their supervisor, colleagues, their work, the organization's leaders, and the people the organization serves. When people feel these connections, they thrive, individually and collectively.

A connection culture is created when leaders communicate an inspiring vision, value people, and give them a voice. An easy way to remember this is Vision + Value + Voice = Connection. A connection culture provides five benefits to organizational performance (see sidebar) that, taken together, add up to a powerful source of competitive advantage.

The high degree of human connection in Costco's workplace culture helps explain why it is among America's best employers. Let's look at the three elements of vision, value, and voice and how they help create the shared identity, empathy, and understanding that connects people and provides the foundation of Costco's connection culture.

Communicate an inspiring vision (creates shared identity)

In the context of a connection culture, my colleagues and I define vision as having three parts: mission, values, and reputation. Costco's vision is that the organization helps people make ends meet, helps businesses be more efficient and serve customers better, and is a positive force in the communities where its warehouses (the term used for its stores) are located.

Costco's values are summed up in the phrase "Do the right thing." Its code of ethics elaborates: Obey the law, take care of our members, take care of our employees, and respect our suppliers. …

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