Greetings, readers. I’m Phil Wahba, senior writer on Fortune‘s leadership beat.
Conventional wisdom in the business world holds that a company lifer can be a risky choice as a new CEO. Such a person is often too entrenched, the stereotype goes, to bring in fresh ideas. That can be especially true in retail, with its constant upheaval.
Ron Vachris of Costco Wholesale offers a counterpoint: The 41-year veteran of the bulk retailer took its reins in January, decades after starting as a teenaged forklift driver at Price Club (which went on to become part of the Costco empire).
We are just five months into his tenure so it’s too early to assess his performance. But Vachris, only Costco’s third CEO, was a key architect of the retailer’s relentless success in recent years—as operations chief, merchandising chief, and head of real estate. Between 2016 and 2023, net sales more than doubled to $238 billion, while membership—key for a company that gets the bulk of its net income from member fees—rose 50% to 128 million people. This fiscal year, that streak has continued.
Vachris’s leadership style is informed by the approach of Costco’s iconic co-founder and CEO for 28 years, Jim Sinegal: Listen to underlings and trust their expertise. “You’ve got to give people room to try new things,” Vachris told me in an interview at Costco’s headquarters in Issaquah, Wash., for my deep dive into the cult of Costco, published today.
That has meant trusting buyers to order the right products—an essential role since Costco sells only 3,800 items (many with devoted followings), compared to about 120,000 at a Walmart.
It has also meant listening—truly listening—to workers’ ideas, big and small, for how to run its warehouse-like stores with military precision. It was store employees, for example, who came up with the idea to repurpose leftover rotisserie chicken for chicken salads.
Costco remains on a tear, but Vachris wants to be much more than a caretaker CEO. The next big engines for growth will be international expansion and improving what has long been a comparative weak spot: e-commerce.
To get there, Vachris will need all hands on deck. So his top priority is protecting the strong Costco culture and employee loyalty. “It’s been ingrained in my head for 41 years that culture is not a priority—it’s the priority,” the 59-year-old says.
When you have a dynamic culture where people aren’t afraid to speak up, the institutional knowledge and loyalty of “lifers”—whether in the C-suite or on the front line—can be a precious asset. Costco’s perennially strong results prove that.
You can read my whole feature here.
More news below.
Phil Wahba
phil.wahba@fortune.com
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This edition of CEO Daily was curated by Nicholas Gordon.
