These 7 books helped create the Trader Joe’s empire, from philosophy to World War I military strategy – CNBC

These 7 books helped create the Trader Joe’s empire, from philosophy to World War I military strategy – CNBC

Joe Coulombe, the founder of Trader Joe’s, turned a single store into a nationwide brand — and a small collection of books heavily influenced his success.

In “Becoming Trader Joe,” a posthumous memoir released earlier this year, Coulombe wrote that his entrepreneurial and managerial skills were shaped by seven books — on topics as myriad as economics, philosophy, marketing and even World War I military strategy.

The lessons he learned helped grow Trader Joe’s from its first location in Pasadena, California, in 1967 to today’s 530-plus locations across the U.S. and annual revenue in the billions of dollars. Coulombe personally ran the company for 21 years, until his retirement in 1988. By then, the chain was a national brand with a cult following.

Here are the books that, as Coulombe put it, helped him become Trader Joe:

‘The Winning Performance’

By Donald Clifford and Richard Cavanagh

Written by a pair of McKinsey management consultants in 1985, “The Winning Performance” is an analysis of some of the overlapping qualities found at several successful mid-size companies, from Perdue to Dunkin’ Donuts.

In the preface of his memoir, Coulombe described it as his favorite management book, and pulled out a quote from it: Profit is merely an “inevitable by-product of doing other things well,” and while counting profits can be “a useful yardstick for measuring quantitative performance…making money as an end in itself ranks low.”

It’s easy to tell why this quote stood out to Coulombe, who spent much of his memoir recounting the ideas and strategies that he felt were more essential to success than thirsting for profits. You should be willing to sacrifice some profit, he wrote, to pay your workers more than your competitors would.

Similarly, he added, going out of your way to stock uncommon products that your competitors don’t have — like Brie cheeses or Bordeaux wines, which weren’t particularly commonplace in the U.S. several decades ago — is often worth the extra legwork.

‘The Guns of August’

By Barbara Tuchman

Coulombe’s decision to pay his workers above market rates, he wrote, was similarly influenced by “The Guns of August,” a 1962 historical chronicle of the first month of World War I.

When the book first came out, Coulombe was running Pronto Markets, the string of convenience stores that preceded Trader Joe’s — and he was trying to find the perfect way to stand out against bigger supermarkets.

He took inspiration from Tuchman’s description of the German and French militaries abandoning their initial strategies in the early days of the first World War, leading to years of stalemate. “The most basic conclusion I drew from her book was that, if you adopt a reasonable strategy, as opposed to waiting for an optimum strategy, and stick with it, you will probably succeed,” Coulombe wrote.

For him, that confirmed it: Paying employees well was the “most important single decision I ever made.” It cost Trader Joe’s more money up front, but Coulombe found that it paid off by reducing employee turnover, often a huge cost for retailers. 

‘The Revolt of the Masses’

By Jose …….