Costco’s Declining Culture
Company policies impact culture and employee morale
I’m a HUGE fan of Costco. In fact, my entire family looks forward to our weekly visit. We enjoy browsing the electronics, food, clothes, furniture and always seem to find something we didn’t know we “needed” before we leave. The inflatable pool we bought last summer has been particularly enjoyable during the scorching heatwave Texas is currently experiencing.
I recently joined the Costco Subreddit because, well, Reddit is where fans go to discuss their favorite topics. It’s fascinating to hear what other Costco customers find in their local store, or read their reviews of products. But one post this week was truly disappointing. A customer shared that they’ve noticed their local Costco seems “off” lately:
Over a thousand people commented on the post to express their shared frustration with what they believe is a decline in Costco’s products and services. Many Costco employees also joined in, describing poor management as the source of this decline. Here’s how one employee put it:
As a coach who helps leaders with their leadership style and building a healthy culture, this one sentence was deeply concerning: “I used to truly care about my job, our members, the quality of our stuff…Now I could give 2 shits and it’s because of the way the managers treat the employees.”
There is ample evidence that shows when a company stops caring about its team, it will inevitably deteriorate. Business maven Richard Branson once observed, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
Companies with a strong culture that listen to and care for their employees are 89% more likely to report high customer satisfaction. Disengaged employees, like the disgruntled Costco employee posting on Reddit, cost their employer 18% of their annual salary. And customers start to feel that decline in culture, as evidenced by the Reddit user who noticed Costco seems “off.”
Culture starts at the top of the company. If there’s a decline in organization culture, it means leadership is neglecting a critical responsibility: caring for their team. In his book Conscious Leadership, John Mackey notes, “It’s hard to overestimate the power of culture in the success of the organization.”
Now, the Internet is notorious for allowing complainers to amplify their discontent out of proportion to the true state of a company’s product or service. But if the complaints about Costco on Reddit are valid, their new leadership still has the opportunity to turn around their culture and prevent a decline in the health of their company. But it requires an honest look at how all stakeholders are treated and implementing policies that can benefit everyone—not just stockholders.
Team members in particular need to feel they heard, cared for, and have opportunity for growth. As Richard Branson wisely shared, they are the ones who will take care of the customers. John Mackey expounds on this concept: “Once you’ve hired the right people for the team, the next challenge is to continue to develop a culture in which individuals and teams can grow and thrive.”
I love you, Costco. And I’m rooting for your team’s success. Because when your team is happy, your customers will be happy.
Work happy. Live happy. BE happy.
Meredith
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The way we work and build teams is rapidly changing. Leaders often feel unprepared to navigate the transition. As a conscious leadership coach, consultant, and communicator, Meredith helps leaders and their teams create new ways of working and relating so they can prepare for the future by consciously co-creating it.
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I can tell you from a 20+ year perspective as an employee. It has only gotten worse now sales are declining as well.