CEO Doug McMillan's decision to raise worker pay by 90% was key to Walmart's resurgence. This investment in people lowered turnover, improved service, and attracted new customers, ultimately quadrupling the stock price and proving a vital strategy against competitors like Amazon.

If you can't pay employees enough to retain them, the root cause is likely a flawed sales process, not a hiring issue. A weak sales motion prevents price increases, which suppresses profit margins and ultimately limits what you can afford to pay your team.

Capital allocation isn't just about multi-million dollar acquisitions. Hiring a single employee is also a major investment; a $100k salary represents a discounted million-dollar commitment over time. Applying the same rigor to hiring decisions as you would to CapEx ensures you're investing your human capital wisely.

Unlike most retailers who apply a consistent markup percentage, Trader Joe's prioritizes the absolute dollar profit per item. They will gladly accept a lower margin percentage on a higher-priced item if it generates more cash profit per unit of scarce shelf space, optimizing for their key constraint.

The true ROI of a great company culture is operational velocity. Long-tenured employees create a high-context environment where communication is efficient, meetings are shorter, and decisions are faster. This 'shared language' is a competitive advantage that allows you to scale more effectively than companies with high turnover.

By paying higher wages than competitors, convenience store chain QuickTrip attracts a large applicant pool. This allows them to be incredibly selective, interviewing just three out of every 100 applicants. The result is a high-quality, loyal workforce with a turnover rate of 13% versus the industry's 59%.

A sustainable competitive advantage is often rooted in a company's culture. When core values are directly aligned with what gives a company its market edge (e.g., Costco's employee focus driving superior retail service), the moat becomes incredibly difficult for competitors to replicate.

Instead of treating high commission payouts as a pure expense, view them as a marketing asset. Actively ensuring it's known that top reps make a lot of money serves as the best possible recruiting tool, attracting other A-players to your company.

Charlie Munger prized 'win-win' systems, and Costco is the prime example. By offering clear value to all stakeholders—low prices for customers, reliable partnership for suppliers, high wages for employees, and steady returns for investors—Costco creates a self-reinforcing, durable competitive advantage that is difficult to replicate.