Q1: Case Study: The Container Store: An Employee Centric Retailer

CORPORATE CULTURE AND GUIDING PRINCIPLES: When The Container Store's management allowed Leonard Green & Partners LP to acquire a majority stake in the company, it ensured that the acquiring company understood and respected the culture of The Container Store. According to CEO Kip Tindell, they were not purchasing The Container Store so much as its "yummy" corporate culture. Such a strong emphasis on corporate culture over profits might appear risky as every business requires profitsand the goodwill of shareholders/investorsto survive. However, rather than damaging The Container Store's bottom line, its culture has caused the company to thrive. The Container Store has experienced consistent growth over the years, which it attributes to its excellent customer service and its ability to create beneficial relationships with customers, vendors, and employees. The tenets that The Container Store uses to guide these relationships are codified into six Foundation Principles that were formally adopted in 1988. The following list describes these principles: Fill the other guy's basket to the brim. Making money then becomes an easy proposition. The Container Store believes the key to creating mutually beneficial and sustainable relationships with merchants is to give them everything they need. For this reason, The Container Store makes it a policy to always pay its vendors on time. Serve the man in the desert. This principle encompasses the scope of the retailer's customer service perspective. Company managers use the analogy of a man in the desert who comes across an oasis filled with people. To perform this, salespeople are discouraged from asking customers the tell-tale, "May I help you?" and are instead instructed to engage the customer in conversation to discover the customers' true needs. One great person equals three good people. The Container Store believes that one of the best qualities of a great employee is flexibility. Employees are encouraged to be like "Gumby" flexible enough to go outside their regular duties to help customers and fellow co-workers. Intuition does not come without a prepared mind. The Container Store believes its employees must be prepared to help its customers find solutions. Thus, it invests in hundreds of training hours for new employees. The best selection anywhere plus the best service anywhere plus the best or equal to the best price in our market area. Air of excitement. The Container Store views excitement to be contagious. Therefore, it hires enthusiastic employees to serve its in-store customers. The Container Store's Foundation Principles clearly demonstrate the importance it places on customer service. Yet at The Container Store, employees come first. The Container Store management sees employees as the critical component to business success. Their enthusiasm, knowledge of customer solutions, and integrity are the key to not only making a sale, but selling more items and generating loyal customers. This philosophy is so important to The Container Store that it goes to great lengths to ensure the employees it hires are the right fit for the company. Applicants can face as many as nine interviews, and only about 3 percent are hired. Those that are hired, however, experience numerous benefits. Employees at The Container Store are known for their enthusiasm, and the company takes great pains to ensure that their employees are knowledgeable and happy. First-year full-time employees undergo 263 hours of training, while the industry average is only 10 hours. The Container Store prides itself on offering employees at least 50 percent more than they could make at other retail jobs; the average salary for full-time salespeople is $46,000. Even part-time workers get health-care benefits. Employees get access to all company information, including financials and real estate plans. The company's employee-centric culture significantly contributes to morale and employee loyalty, evidenced by its low turnover rate. Turnover at The Container Store is 10 percent annually, compared to as much as 100 percent at other retailers. The company works to incorporate customers into their employment practices as well.

Tasks:

a. What can we learn from The Container Store's approach toward its employee relationships?

Q4: Case Study: Netscape's Work Culture

Netscape's Culture: Netscape promoted a casual, flexible and independent culture. Employees were not bound by rigid schedules and policies and were free to come and go as they pleased. They were even allowed to work from home. The company promoted an environment of equality - everyone was encouraged to contribute his opinions. This was also evident in the company's cubicle policy. Everyone including CEO Barksdale, worked in a cubicle. Independence and hands-off management were important aspects of Netscape's culture. There was no dress code at Netscape, so employees, were free to wear whatever they wanted. Barksdale laid down only one condition, "You must come to work dressed." The company promoted experimentation and did not require employees to seek anyone's approval for trying out new ideas. Netscape's management reposed a high degree of trust in its employees, which translated into empowerment and lack of bureaucracy. Beal, a senior employee said, "Most organizations lose employees because they don't give them enough opportunities to try new things, take risks and make mistakes. People stay here because they have space to operate." Realizing that some experiments do fail, Netscape did not punish employees for ideas that did not work out. However, to maintain discipline at work, employees were made accountable for their decisions. They were also expected to give sound justifications for their actions. Job rotation was another important feature of Netscape's culture. By doing so, the company helped its employees learn about new roles and new projects in the company. For example, Tim Kaiser, a software engineer, worked on four different projects in his first year of employment. The company believed in letting its staff take up new jobs - whether it was a new project in the same department or a new project in another department. Moreover, related experience was not a requirement for job rotation. Netscape played a proactive role in identifying new positions for its employees inside the company. Employees were offered a wide range of training options and an annual tuition reimbursement of US $6,000. This opportunity to expand their skills on the job was valued by all employees. The company also helped employees learn about the functioning of other departments. There were quarterly 'all-hands' meetings in which senior managers of different departments gave presentations on their strategies. These efforts created a sense of community among employees. An employee remarked, "They really try to keep us informed so we feel like we are involved with the whole company." Netscape offered a wide range of on-campus services to its employees. Apart from the standard package of health and vision benefits, Netscape also offered a 'Total Health and Productivity' plan. The on-campus services program was introduced through an agreement with a San Francisco based service provider, LesConcierges. Under the program, employees were able to get some of their routine work done like dry cleaning, paying bills, getting the oil changed in their automobiles, etc. They could also consult a dentist or even have a massage. The program also helped employees to plan for holidays as well as order gifts. Sick children of employees were also looked after at a child-care facility near the campus for US $10 a day. According to an analyst, employee retention is the key to success in the IT industry. Compared to the industry attrition rate of 30%, Netscape's attrition rate was 20%. Netscape's management believed that more than the pay check, employees were interested in meaningful work, independence, flexibility, and a desire to learn on the job. Tim Garmager, principal of the Human Resources Strategies Group at Deloitte & Touche LLP in Chicago, confirmed this belief: "There is less emphasis on pay today than ever. In today's job market, employers need to look closely not only at the benefits they offer but at the culture they engender."

Tasks:

a. List down the key elements of the Netscape's Culture and how culture plays an important role in getting the performance the company wants?