Sam Walton: Made In America

by Sam Walton

If I had to single out one element in my life that has made a difference for me, it would be a passion to compete. That passion has pretty much kept me on the go, looking ahead to the next store visit, or the next store opening, or the next merchandising item I personally wanted to promote out in those stores—like a minnow bucket or a Thermos bottle or a mattress pad or a big bag of candy.

Hunger

at Wal-Mart, everything we’ve done has been the result of people pulling together to meet one common goal—teamwork—something I also picked up at an early age.

Strong team

It never occurred to me that I might lose; to me, it was almost as if I had a right to win. Thinking like that often seems to turn into sort of a self-fulfilling prophecy.

Belisef in winning

learned early on that one of the secrets to campus leadership was the simplest thing of all: speak to people coming down the sidewalk before they speak to you. I did that in college. I did it when I carried

Always eng peopl first

In retailer language, you can lower your markup but earn more because of the increased volume.

Sometimes dont get to gredy

First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.”

Ok to make mistakes

To me, it always seemed like a customer was a customer, and you ought to try to sell them what you could.

Take all oportunities dont be arrogant

Let’s be out front. Let’s do it right. Let’s get it done now and get on with it.

Great qoute

We’d pick out, say, twenty items, and then we’d sit down on the floor with a pair of scissors and go through those newspapers until we found some store that had run oil, and we’d just cut out the oil can and paste it on there and write ‘Pennzoil 30W’ and stick our price on it. And we’d do the same thing for the socks and the panties and the wastebasket—just make up our own ad out of everybody else’s ads in those newspapers. But it worked! Because

Keep costs down be entrepreneurial do what it takes

“Mr. Sam usually let me do whatever I wanted on these promotions because he figured I wasn’t going to screw it up, but on this one he came down and said, ‘Why did you buy so much? You can’t sell all of this!’ But the thing was so big it made the news, and everybody came to look at it, and it was all gone in a week.

Trust employees empower managers

retail, you are either operations driven—where your main thrust is toward reducing expenses and improving efficiency—or you are merchandise driven. The ones

All about tge products

The only other reason the thing held together back then is that from the very start we would get all our managers together once a week and critique ourselves—that was really our buying organization, a bunch of store managers getting together early Saturday morning, maybe in Bentonville, or maybe in some motel room somewhere. We would review what we had bought and see how many dollars we had committed to it. We would plan promotions and plan the items we intended to buy.

Emphasise rhythms and learnings

If you want the people in the stores to take care of the customers, you have to make sure you’re taking care of the people in the stores. That’s the most important single ingredient of Wal-Mart’s success.

The golden rule

What’s really worried me over the years is not our stock price, but that we might someday fail to take care of our customers, or that our managers might fail to motivate and take care of our associates. I also was worried that we might lose the team concept, or fail to keep the family concept viable and realistic and meaningful to our folks as we grow.

Care for the customer and staff

Each store had to be within a day’s drive of a distribution center. So we would go as far as we could from a warehouse and put in a store. Then we would fill in the map of that territory, state by state, county seat by county seat, until we had saturated

Controlled growth

So my role has been to pick good people and give them the maximum authority and responsibility.

Trust the team

“More than anything else, we had manpower problems—finding good people and getting them trained in a hurry. Because we always ran a real tight organization, we had no excess people in the stores so they had to get real good real fast. Back when I had been at Hested’s, and at Newberry’s, too, a guy had to have ten years’ experience before we’d even consider him to be what we called a manager-in-training.

Down here, Sam would take people with hardly any retail experience, give them six months with us, and if he thought they showed any real potential to merchandise a store and manage people, he’d give them a chance. He’d make them an assistant manager. They were the ones who would go around and open all the new stores, and they would be next in line to manage their own store. In my opinion, most of them weren’t anywhere near ready to run stores, but Sam proved me wrong there. He finally convinced me. If you take someone who lacks the experience and the know-how but has the real desire and the willingness to work his tail off to get the job done, he’ll make up for what he lacks. And that proved true nine times out of ten. It was one way we were able to grow so fast.” We were trying to put in as many merchandising programs as we could and give our stores as much support as possible during all this growth, but in the early seventies, that Wal-Mart manager was still pretty much out there on his own when it came to promoting items and moving the merchandise.

Trust god pople nd promot them quickly

And here it is: the more you share profits with your associates—whether it’s in salaries or incentives or bonuses or stock discounts—the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit

Share in profits is important

In 1971, we took our first big step: we corrected my big error of the year before, and started a profit-sharing plan for all the associates. I guess it’s the move we made that I’m proudest of, for a number of reasons.

Do we need to reimagine profit share for staff

you’ve got to give folks responsibility, you’ve got to trust them, and then you’ve got to

check on them.

Trust with checks and balances

some folks outside our company may be putting a little too much emphasis on the supposed low quality of workers in the city, and not enough emphasis on the failure of some managers to do their jobs in getting those workers going in the right direction.

Managing correctly.... RLs need to take on mor responsibiity

Sharing information and responsibility is a key to any partnership. It makes people feel responsible and involved, and as we’ve gotten bigger we’ve really had to accept sharing a lot of our numbers with the rest of the world as a consequence of sticking by our philosophy. Everything

Daily Huddles sharing numbers

Obviously, some of that information flows to the street. But I just believe the value of sharing it with our associates is much greater than any downside there may be to sharing it with folks on the outside.

Share it

Because if we, as managers, truly dedicate ourselves to instilling that thrill of merchandising—the thrill of buying and selling something at a profit—into every single one of our associate-partners, nothing can ever stop us.

We do this through vap

At any company, the time comes

when some people need to move along, even if they’ve made strong contributions. I have occasionally been accused of pitting people against one another, but I don’t really see it that way. I have always cross-pollinated folks and let them assume different roles in the company, and that has bruised some egos from time to time. But I think everyone needs as much exposure to as many areas of the company as they can get, and I think the best executives are those who have touched all the bases and have the best overall concept of the

corpor...

sometimes time to move on

As we’ve grown, we’ve gotten away from the circus approach, but we’ve made it a point to keep encouraging the spirit of fun in the stores.

As we get bigger how can we promote this

Managers from our Ozark, Missouri, store dressed up in pink tutus, got on the back of a flatbed truck, and cruised the town square on Friday night, the peak time for teenage cruisers, and somehow managed to raise money for charity by doing it.

The reece grant

I’ve forced change—sometimes for change’s sake alone—at every turn in our company’s development. In fact, I think one of the greatest strengths of Wal-Mart’s ingrained culture is its ability to drop everything and turn on a dime.

Change is important

hiring college boys because they didn’t think they would work hard enough. Three of the first ones we hired—Bill Fields, Dean Sanders, and Colon Washburn—are still with us and, in

Grad program

Helen and I started the Walton Institute down at the University of Arkansas in Fort Smith. It’s a place where our managers can go and get exposure to some of the educational opportunities they may not have had earlier on. Also, we as a company need to do whatever we can to encourage and help our associates earn their college degrees.

Power up

Nowadays, the industry has waked up to the fact that women make great retailers. So we at Wal-Mart, along with everybody else, have to do everything we possibly can to recruit and attract women.

Diversity need to drive this

It goes back to what I said about learning to value a dollar as a kid. I don’t think that big mansions and flashy cars are what the Wal-Mart culture is supposed to be about.

Interesting

generally work on commission to represent several different manufacturers—have complained about some of our practices. We don’t have any problem with the idea of paying a middleman a commission on a sale, if his services add value to the purchasing process by making it more efficient.

But from the days when I was hauling that little trailer over into Tennessee to buy panties and shirts and avoid paying Butler Brothers’ markup, our philosophy on this has always been simple: we are the agents

for our customers. And to do the best job possible, we’ve got to become the most efficient deliverer of merchandise that we can. Sometimes that can best be accomplished by purchasing goods directly from the manufacturer. And other times, direct purchase simply doesn’t work.

No middle mn unless tgey add value

And because we got used to doing everything on our own, we have always resented paying anyone just for the pleasure of doing business with him.

Similar to reece

‘Whatever Claude says, that’s what it’s going to be.’ Well, now we have a real good relationship with Procter & Gamble. It’s a model that everybody talks about. But let me tell you, one reason for that is that they learned to respect us. They learned that they couldn’t bulldoze us like everybody else, and that when we said we were representing the customer, we were dead serious.” In those days, of course, we desperately needed Procter & Gamble’s product, whereas they could have gotten

three months we had created a P&G/Wal-Mart team to build a whole new kind of vendor-retailer relationship. We formed a partnership to conduct our business, with one of the most important outcomes being that we started sharing information by computer.

can ww do something wwith frheem aanand gwa

That was really a turning point in our business. We listened to everything they had to say, and made huge adjustments based on those critiques. It helped

Non direct competiors came in and hlped their business

don’t want our competitors getting too comfortable with feeling like they can predict what we’re going to do. And I don’t want our own executives feeling that way either. It’s part of my strong feeling for the necessity of constant change, for keeping people a little off balance.

Dont becom e predictable eg pricing

more competitive company. It naturally

They haven’t been able to get their expense structure as low as ours, and they haven’t been able to get their associates to do all those extra things for their customers that ours do routinely: greeting them, smiling at them, helping them, thanking them. And they haven’t been able to move their merchandise as efficiently, or keep it in stock as efficiently, as we do.

Secret sauce

We stock over 80,000 items in our stores, and our warehouses directly replenish almost 85 percent of their inventory, compared to only about 50 to 65 percent for our competition. As a

Dcs

He sees that entrepreneurial element as being so important and something he never wants us to lose. He saw the big change in

Be entrepreneurs

If you had to boil down the Wal-Mart system to one single idea, it would probably be communication, because it is one of the real keys to our success. We do it in so many ways, from the Saturday morning meeting to the very simple phone call, to our satellite system. The necessity for good communication in a big company like this is so vital it can’t be overstated. What good is figuring out a better way to sell beach towels

Comunication huge key to success

I want you to take a pledge with me. I want you to promise that whenever you come within ten feet of a customer, you will look him in the eye, greet him, and ask him if you can help him. Now I know some of you are just naturally shy, and maybe don’t want to bother folks. But if you’ll go along with me on this, it would, I’m sure, help you become a leader.

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