I ‘developed my leadership skills’ doing this job in 1992

Costco CEO Ron Vachris leads a company with roughly 341,000 employees spread across more than 900 warehouses around the world.

But the 60-year-old executive first learned some of his most important leadership lessons more than three decades ago, when he was in charge of just a single store, he told U.S. News & World Report in November. “That was the time that I really developed my leadership skills,” Vachris said, describing his time managing an individual Price Club warehouse location for the first time in 1992

Specifically, he learned “the importance of surrounding yourself with great people, and putting them in the right places, and really strategic thinking,” he said. Those takeaways fit well with the long-standing culture at Costco, whose co-founder Jim Sinegal counts Price Club founder Sol Price as a mentor. The two companies merged in 1993.

Since launching Costco in 1983, Sinegal has preached the importance of hiring people who exude integrity and passion for the business, and then treating those employees well with generous wages and plentiful opportunities for advancement.

“It’s really pretty simple. It’s good business. When you hire good people, and you provide good jobs and good wages and a career, good things are going to happen,” Sinegal told U.S. News & World Report in October 2009.

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Vachris didn’t manage one warehouse at a time for long: After running two individual Colorado locations in 1992, he managed multiple warehouse in Arizona following Price Club’s merger with Costco in 1993, according to The Wall Street Journal. Over the ensuing decades, Vachris held high-profile roles in Costco’s real estate development and merchandising departments. In January 2024, he became just the third CEO in Costco’s history, succeeding his predecessor, Craig Jelinek.

As CEO, Vachris still tries to uphold “the culture of the organization,” he told the Journal in April. He reminds Costco warehouse managers to hire new workers they believe have the passion and aptitude to rise through the ranks like he and other company executives have, he added: “You’re not hiring the next cashier. You’re not hiring the next cart-pusher. You’re hiring the next warehouse manager … You’re hiring our future.”

Costco has a reputation for paying higher average wages than its competitors in the retail industry, which helps the company maintain a single-digit employee turnover rate that far outpaces others in the industry, The Economist noted in February 2024.

Another factor, according to Vachris, is that several executives beyond himself started with the company as entry-level employees. “Everybody has opportunities,” he told the Journal. “You look at who’s running the company today. We all came up through the ranks of the company itself. When people see that those opportunities are available to all of us, [they see] we offer careers, not just jobs. Retention is core to the company’s success.”

Outside of Costco, some other prominent business figures similarly preach the importance of surrounding yourself with quality people. Billionaire Kind Snacks founder Daniel Lubetzky, for example, has attributed his success to hiring intelligent people with varied skill sets who are also willing to give him honest feedback, even if it’s critical.

“If you don’t surround yourself with those people, then it is so much harder to [achieve success] because you can go in to ‘I’m amazing’ mode, and not realize when you are screwing up,” Lubetzky told CNBC Make It in October 2023.

Billionaire investor Warren Buffett is another proponent of surrounding yourself with what he’s called “high-grade people” so their positive attributes, like intelligence and ambition, can rub off on you. 

“You are going to have your life progress in the general direction of the people that you work with,” Buffett said at Berkshire Hathaway’s annual shareholders meeting in May, adding: “You’ll learn all the time, but you’ll not only learn how to be successful at business, you’ll learn how to be successful at life.”

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