Mary Schmidt Marketing Troubleshooter

How Costco Became the Anti-Wal-Mart, via Sunday NY Times.

In which we see that a leader can be both tough and fair, and considerate of the company’s employees.

“…Costco’s stock price has risen more than 10 percent in the last 12 months, while Wal-Mart’s has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19. Mr. Dreher said Costco’s share price was so high because so many people love the company. ‘It’s a cult stock,’ he said.

Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco’s workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.

‘He has been too benevolent,” she said. ‘He’s right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden.’”

Hmmm…so, Ms. Kozloff - just speculating here - but you’ve probably got a great benefits package at Bernstein & Co. Ever suggest to your boss that you “pick up a little more of the burden?”

Of course, I’m compelled to compare this to the struggle small businesses are having to provide even basic health care to their employees. Most small businesses really want to be considerate of their employees and simply can’t afford the ever-escalating costs. They often have to choose between providing a job or better benefits for the group - one or the other, not both.