What can hot dogs teach us about culture?

Costco can be a great place for bargains. With an inventory that is constantly being refreshed and revised, shoppers have a stark choice – buy now, or miss out.

There is, however, one ever-present bargain. A soda and giant hot dog for $1.50. 

 It seems that this price is here to stay. In a 2018 interview, CEO Craig Jelinek described why the price was set in stone by founder Jim Sinegal.

 "I came to (Sinegal) once and I said, 'Jim, we can't sell this hot dog for a buck fifty. We are losing our rear ends.'

 And he said, 'If you raise the effing hot dog, I will kill you. Figure it out.”

Jelinek went on to describe how working within this constraint had enabled the Costco business, and forced them to find other cost saving measures. 

"What we figured out, we could do is build our own hot dog-manufacturing plant (in Los Angeles) and make our own Kirkland Signature hot dogs. Now we are doing so much hot dog business that we've opened up another plant in Chicago.

By having the discipline to say, 'You are not going to be able to raise your price. You have to figure it out,' we took it over and started manufacturing our hot dogs. We keep it at $1.50 and make enough money to get a fair return."

I had my own cultural hot dog moment coming out of the COVID pandemic.

Pre-pandemic Synlogic had built what I’d describe as a “high touch” culture. We had lots of team meetings, social events, and other in person activities. 

One of the anchors was our weekly team lunch. Team members from across the company would grab a plate of food from a big tray, sit together, catch up, and build trust. There was no hierarchy on display – just grab food, pull up any chair, connect. 

All activities moved to zoom during COVID. Coming out the pandemic we were returning to the office and trying to get back to “normal”. 

I had looked at how we might do lunch, and found what I thought was a great vendor.

If you were going to be in on lunch day you could order from a pre-set menu the night before.  Food would be boxed up with your name on it. You could grab and go if you weren’t comfortable in an open café area. It was COVID appropriate. Safe. Low touch….and sterile.

On presenting this option to Aoife, our CEO, I got a similar response to Sinegal:

“I effing hate it. That isn’t our culture. If that is how it has to be I’d rather not do the lunch at all.”

And, as ever, Aoife was right. 

We re-introduced our family-style lunch. People were comfortable, or got comfortable. No one got sick. An anchor of our culture returned.

Aoife’s reaction that day reinforced a valuable lesson.

The cheap hot dog is central to Costco’s strategy. It is important enough that they refuse to compromise on the low price.

In turn, there are elements of company culture that are equally as important. It is critical to identify these attributes and preserve them above all else, or risk eroding the key elements that make your company unique. 

For the record, Costco sold 122 million hotdog combos in 2021.  Seems like the strategy is working well for them. 

Unfortunately, we had to close our doors. We had a last team lunch in our final week. It was an emotional one, but it remained a great chance to pull up a pew and connect with colleagues of all functions and levels to the last.