The Container Store CEO advises students to build a business based on relationships
Kip Tindell on benefits of organization and conscious capitalism
May 14, 2015
When Kip Tindell co-founded The Container Store in Dallas in 1978, he knew that saving space was important. What he didn’t realize was how important the concept of saving time would become.
“What we [do] at the Container Store is selling the promise of an organized life. There’s a Zen quality to that. You get more done. You are at peace,” said Tindell, who is chairman and CEO of the 70-store chain at the final Dean’s Innovative Leader Series presentation of the semester. “If you’re trying to get two kids off to school in the morning, and they’re disorganized and you’re disorganized, it’s terrible … but if you are organized … then you have the organized life.”
Tindell said he wants to ensure, through conscious capitalism, that The Container Store not only makes customers happy, but also employees, vendors, and anyone else who comes in contact with the business.
“The tenets of conscious capitalism revolve around having a higher purpose besides just making money. Most successful entrepreneurs I know didn’t just start a business to make money,” said Tindell, who in college once roomed with John Mackey, co-founder and CEO of Whole Foods Market, another promoter of conscious capitalism. The two remain friends, and Tindell sits on the Whole Foods board of directors.
Conscious capitalism, as well as The Container Store’s Seven Foundation Principles, contributes to low employee turnover and average worker salaries that are nearly twice the industry standard, Tindell said.
“These foundation principles are what we stand for. They are the underpinning of our ‘employee-first’ culture,” he said.
Tindell quoted Herb Kelleher, co-founder of Southwest Airlines, who famously said that a “company is stronger if it is bound by love rather than by fear.” A company’s actions always leave behind a wake, as a boat does, Tindell said.
“A company that is collectively mindful of its wake has an unassailable business advantage,” he added.
When asked about cultivating strong relationships with vendors, Tindell credited his wife, Sharon, the company’s chief merchandising officer, for much of the success.
“We believe in nurturing and creating these hugely close and mutually beneficial relationships with our manufacturers,” he said. “It’s the opposite of what retailers used to do to their vendors. You have to learn a lot about their business, and they have to learn a lot about your business in order to do that.”
“We usually know when the valleys in the sales and production cycle of each vendor are and we always try to give our biggest order to that vendor right in the valley of their year when their machines are idle,” he said.