CEO swap: 2 Best Companies chiefs trade places

rtwomey_ceo_swap.top.jpgContainer Store CEO Kip Tindell (left) and Build-a-Bear CEO Maxine Clark spend a day at each other's stores.By Paul Keegan


(Fortune Magazine) -- Kip Tindell, chief executive of the Container Store, is sitting on a stool in a Build-a-Bear Workshop in Dallas, trying to affix the limp carcass of a monkey doll onto a metal pipe attached to what looks like a giant cotton-candy machine. Around the same time, Maxine Clark, chief executive of Build-a-Bear, is wearing a red apron and trying to convince a customer at the Container Store in St. Louis that it's okay to give store-bought cupcakes as a gift to her boss as long as they come in a pretty box.

What sounds like an episode from the old Bizarro World comics actually happened not long ago. It was all part of an experiment: What, Fortune wondered, would happen if two CEOs from our Best Companies list traded places for the day?

The matchup of Tindell and Clark seemed promising: Both are company founders who started with an unusual idea and built it into a half-billion-dollar retailer. And happily, both are incredibly good sports. But what would they learn from the other company? What would turn them off? As Tindell tries to stuff the monkey while simultaneously interacting with the customer, a 2-year-old girl throwing toys on the floor, he is sure of one thing: W.C. Fields was right. Never work with children or animals -- they'll upstage you every time.

Kip Tindell's day at Build-a-Bear

Tindell's sales trainer at Build-a-Bear (BBW) is Kathi Scott, a middle-aged woman with a soft, singsong voice who gets so worked up about selling teddy bears that she looks as if she might burst into tears at any moment.

She reads him the firm's mission statement ("We are a company with a big heart," she says, gently placing a beating plastic heart into his hands) and tells him that he'll be expected to deliver "sales and smiles" by exhibiting "must-see behaviors" (such as telling customers, "Let me show you the Dress Me station!" rather than the wimpy "Would you like to see the Dress Me station?").

She shows Tindell how a child can create a birth certificate for the new bear at a computer -- thereby capturing the child's name, address, e-mail, and other valuable marketing information.

Tindell is 56 years old, tall and lanky, with a relaxed, soft-spoken manner. He has no children and has never set foot in a Build-a-Bear store until today, but he takes all this silliness in stride because he loves retail -- and always has, ever since working in the paint department of Montgomery Ward back in high school.

When he launched the Container Store in Dallas in 1978 at the age of 25, his businessman father's oilmen friends gave him endless grief. ("What? You're gonna sell empty boxes?!") From the beginning he reasoned that if employees are happy, the customers and shareholders will be too -- and the company gradually grew to 47 stores nationwide.

On this day, as little girls and boys approach the gangly guy at the giant cotton-candy machine -- the kids get to press a foot pedal that controls the blast of stuffing -- it becomes clear that Build-a-Bear is selling an emotional experience as much as a physical product.

Mothers bring their children after the death of a grandparent or a beloved pet, and parents leaving for Iraq or Afghanistan record their voices in little sound modules they drop into the bears. Today two men bring in the 8-year-old girl they adopted just this morning and whisper that she was abandoned by her mother, a drug-addicted prostitute.

But all those powerful feelings do no good unless they make the register ring, so Tindell moves to the Dress Me station, eager to try out a technique he just learned called Strive for Five -- attempting to sell each customer five items.

Here comes his first test case -- 5-year-old Nicole, who has already stuffed her pink Endless Hugs teddy ($18) and placed in its paw a device that plays a lullaby when you squeeze it ($3). "Look at those bows!" Tindell tells Nicole. "Sparkly bows!" Her grandmother, a well-coiffed blond, says, "Are those what you'd like, honey?" Nicole picks out a pink cord pleat skirt ($6), then a glittery T-shirt ($5). Four down, one to go. A passerby suggests a cowboy hat. "No, I don't think a cowboy hat would go with that," Tindell says. Finally, Nicole decides on silver glitter heels ($7.50), and Tindell exhales. Though the bear cost less than $20, accessories bring the total tab to $39.50, well above the $32 average Build-a-Bear sale.

"I don't know why we've never done that!" says Tindell later of using a simple rhyming slogan like Strive for Five to drive sales, a concept he says he'll take back to his stores. But why would workers be motivated to strive, since neither Build-a-Bear nor the Container Store employees work on commission?

"They care the same way University of Texas fans care about their team," says Tindell, adding that he was struck by the passion of the Build-a-Bear employees. "It's human, it's emotional," he says of Build-a-Bear. "But boy, built into that is a very sales-oriented culture."

Maxine Clark's day at the Container Store

Clark begins her day at the Container Store in St. Louis at 7 a.m. The doors won't open for another two hours, but the store's nine full-time employees are gathered for their monthly meeting, where they're discussing updates from the company newsletter. (Communicating with employees is a Container Store "core value.")

Later Brian Edison, the store's general manager, encourages more communicating: slapping sticky notes on lockers congratulating co-workers on jobs well done (which can be saved for performance reviews) or logging on to the company's Facebook page to enter the popular Most Organized Employee contest by posting pictures of their tidy closets, garages, and basements, on which customers can vote.

Clark takes notes, intrigued. At 60, she is as short as Tindell is tall and is brimming with energy. Though she also doesn't have children, she says some of her best friends are kids and personally answers the hundreds of e-mails she gets every week from her youthful clientele.

She started Build-a-Bear in 1997 after leaving her job as president of Payless ShoeSource, frustrated that retail had lost the magic she used to feel in stores as a child. A longtime fan of the Container Store -- "a hardware store for women," she calls it -- Clark arrived at today's meeting curious how salespeople are so knowledgeable about 10,000 different items (Build-a-Bear has 450).

The answer, Edison tells her, is training -- a staggering 240 hours for full-time employees during their first year, compared with the industry average of seven to 10. Clark's training today is condensed to about an hour, which includes a video of Tindell explaining the primary goal of every employee -- to bring joy to their (mostly female) customers by helping them get their lives organized. "We want her doing a little dance, actually, every time she walks into the closet," Tindell says.

Manipulating emotion would seem second nature for the founder of a company that has customers who place hair from their dead pets into their new teddy bears. But how to get people excited about empty boxes and trash cans?

Clark straps on her apron, and within a few moments it's obvious that this woman is a sales maestro. Nobody has to tell her not to say "Can I help you?" Instead she strikes up a casual conversation with the customer about the gift wrap she's holding or the shoes she's wearing. She is probing yet polite, insistent without being pushy.

Clark says she is most impressed by the way the Container Store encourages communication among employees -- and she plans to steal some of its ideas. "I thought the idea they had about writing on sticky notes that somebody did a good job and putting it on their locker was a really good idea -- so simple," she says.

She was also inspired by the way the company uses Facebook to connect with customers. Build-a-Bear encourages its employees to write on its Facebook page, but creating contests gives them an incentive: "It really engages the customers with their products, and we could do that too," she says.

The results

Tindell and Clark are reticent when it comes to giving constructive criticism. Tindell allows that Build-a-Bear might get kids more involved in the actual building of the bears (employees now do most of the work), though he understands Clark's concern about legal problems if a child swallows an eye or a nose.

Clark says she is surprised that Tindell didn't grow the company faster -- she has rolled out 400 stores in a third of the time it took Tindell to get to 47 -- but then quickly adds that it's hard to argue with the company's 10% Ebitda growth, even during the recession.

Though these are tough times for retail -- same-store sales were down 6.5% last year at the Container Store and 15% at Build-a-Bear through its third quarter -- both companies say they have done much better than other retailers by sticking to their core principles: taking care of employees and making shopping in their stores an emotional experience.

Executives from both stores got along so well during this experiment that they are already discussing possible deals -- putting Build-a-Bears in the Container Store's toy-storage displays, for example, or sending Build-a-Bears home in Container Store boxes. Those are just two initial ideas. But given this pair, don't be surprised if they Strive for Five. To top of page