The Wal-Mart Way: The Success Story of Sam Walton CEO
There’s a lot to be learned from the story of Wal-Mart. A lot of it is in this book by a former Wal-Mart COO, a man who actually knew Sam Walton. And that’s where the problems start.
Sam Walton was one of the great entrepreneurs of all time. He created a great company with a culture that has survived his death in 1992. But he was not a saint and he wasn’t always right, though this book treats Walton as if both of those things were true.
For example, the Soderquist tells us about a truck driver who was fired for poor performance. The performance had been poor for a while and continued despite counseling. We’re told that the driver’s bosses did everything right, doing the right things, documenting the sub-standard performance, giving the man opportunities to correct behavior, etc.
But once the fellow is fired, he goes in to see Sam Walton. Walton decides that the fellow should be kept on after all. He over-rules both Soderquist and the driver’s immediate bosses. We’re told that this is because Sam Walton wanted to send the message that “the open door policy works.” We’re told it was a good thing.
There’s no mention of other messages that might have been sent, such as “it doesn’t matter if you don’t perform, just go appeal any discipline to the big boss” or “It doesn’t matter if you do everything right when you fire an underperformer because that person can appeal to the big boss and you’ll be back on the job in no time.”
It seems, in this book, that if Sam Walton did it, it must be right by definition. Evidently the company didn’t make any mistakes either. There is plenty of mention, for example, of everyday low prices, but no mention I could find of everyday low wages and benefits. Obviously this sets Wal-Mart apart from other, lesser creatures of business.
Other retailers are clearly lesser creatures. They “just don’t get it” and “use bait and switch tactics.”
Other companies are clearly lesser creatures. Read this book alone and you’d think that Wal-Mart single handedly created supply chain thinking, donation-matching programs, and every IT innovation from EDI to RFID.
Even the vaunted “associates,” though often explicitly praised as a group, are clearly lesser creatures. Soderquist says that he wants associates to communicate “with” management, but when management communicates it is “to” associates.
If things like that bother you, then you may not want to buy this book. You’ll just get upset and miss the very important lessons that are in the book. It starts with the importance of vision.
The book points out that it’s important to have a real vision and strong values to build a big and lasting company. It also shows that one of the particular strengths of Sam Walton’s vision was that it didn’t involve building a big company.
Instead, Walton saw his company as creating an excellent shopping experience for customers in smaller cities and towns. That vision led Wal-Mart to see the customer as the boss. It led the company to view itself as the buyer for the customer, rather than as selling to the customer and all of that finds its way into culture.
The most important lessons this book has to teach are about vision and culture. You’ll learn about the importance of culture to a successful company, but that’s old news. If you don’t know by now that culture is a powerful driver of behavior, then you haven’t been paying attention.
But the book also outlines the mechanisms that Wal-Mart uses to re-enforce its culture and values. You’ll learn about how this is done in regular meetings and through rituals and symbolic actions.
You’ll see many examples of Wal-Mart’s cultural value of constantly seeking improvement. You’ll see how Wal-Mart lives out the value of “everyday low prices.”
That value is a two-edged sword for Wal-Mart. On the one hand it’s a source of both profitability and improvement. On the other, it’s the source of the holier-than-everybody tone of this book and the salary and benefits decisions that have made such bad press for the company.
The best thing about the book is that it shows how one very, very big and successful company has managed to maintain an entrepreneurial energy true to the spirit of its founder. The worst thing about this book is that the author is too proud of that to discuss Wal-Mart’s flaws, failures or shortcomings and, it seems unwilling to give outsiders much credit for getting anything right.
