Doug Rauch: Former President of Trader Joe’s Says Culture Is Your Company’s DNA


People often ask me what’s the secret?
What was the secret at Trader Joe’s and what’s the secret and I’d say it’s the
the answers the same for every great business and this is it right here. It’s
culture. Culture is that one thing that nobody can really copy. Your culture is
your DNA. Wall Street Journal I think is about a year year and a half ago had an
article on this, relationship between culture and performance, and what they
did was they went out and studied not Patagonia or Whole Foods or this. They
went out and studied the used-car business. And what they did was they
went out and studied a bunch of them across the country and there are
actually, I know several, driver select and others that use pre-owned cars, but
create great relationships with their customers. They went out and studied this and
here’s what they discovered. Culture actually causes performance. It’s not
like you have a great performing company, okay now we can start to treat our
people well. Now we can treat our customers you know with respect and and
and fairly etc. Now we can be a good community member. Now we can take some
risks. That had to be embedded first and it actually drove performance. When you
are able to generate cultures that are indeed customer focused and are dealing
with the customers experience and they are tuning into their values magic can
occur. Our Scarsdale store at that time, just
north of New York City, big nor’easter was about to come. It was going to snow and
as we know when there’s a storm coming, everybody runs into the store and they
want to buy you know food as though it’s you know gonna be a month before they
can eat again. A woman with her two children come in and she had shopped the
store piled her card up went to the register and you know, Trader Joe’s
unloads the food for you and bagging the groceries and turns around tells her
here’s the amount and she realizes, oh my god, I left my wallet on the counter
the cashier without a beat says, that’s alright,
I’ll cover you today pay me back next time you’re here. So, I’m getting this
call from the customer which you know your first time a customer calls you
think, okay if a customer is actually calling a president, this must be pretty
serious. Like what can I do for you and then she tells me the story. So next time
I’m down in the store I seek out this gentleman and I just asked him, Why did
you do that? It’s not exactly, by the way, in the operating manual that pay for our
customers groceries. He said, I decided to just trust her and not embarrass her. It
was at that moment I realized wow! First of all this is a story you can’t just
make up and second, that we’d achieved a level of customer focus and experience.
That meant that it had become metabolized into the DNA of a company no
matter what business you’re in, in my opinion, it’s about looking at the future
it’s about thinking about what’s my impact. This customer basically sent me
something that said, you’re not just selling cans of corn and gallons of milk and
bread. You’re providing shelter sort of so that you’re providing value, one could say
warmth – something that really matters to me. So for us, it was looking at what
are we doing that is each time setting up a stage that would allow for a
customer to feel that if we continue on with this good things will happen.
And I would say that every business has that opportunity to indeed be that spot
where people can come and they get to feel fully human. They get to be valued.
And that our work, then gets transformed into that spot where for most of us
nowadays, it is truly our citadel value. It is where we go to bring our very best.
And so workplaces that do that, allow us to have this sort of a feeling.

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