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Let Your Employees Lead The Way

By March 12, 2013

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Costco announced their Second Quarter and Year-to-Date Operating Results for Fiscal Year 2013 today. Their "Revenue at stores open at least a year", a common financial performance metric, was up 5 percent in the U.S. and increased 6 percent overseas. The Seattle Times reports that revenue by similar measures rose 1.2 percent at Wal-Mart Stores in the U.S. and 0.4 percent at Target in their most recent quarters.

Why do you suppose this retailer is up when the bulk of the retail sector is down? Maybe it's because of how they treat their people. In the article Why Costco supports a minimum-wage hike, Costco is reported to be "happy with its current business model regarding its employees". CFO James Galanti is quoted as saying, "We run our business the way we think it should be run, and we've done pretty well doing it." The dependability and stability of their workforce not only offsets the searching and hiring costs of high turnover firms, but also increases the innovation of their employees as a group. That's why Costco outperforms their sector.

You can learn from Costco's example. Keep your employees happy and they will keep you in business and ahead of your competitors. It's true for companies. It's also true for departments within those companies. Leaders win because they take care of their people.

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