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SodWalm 07-10-109 The
Wal*Mart Way The
Inside Story of the Success of the World's Largest Company Don Soderquist Nelson
Business, 2005, 210 pp., ISBN 0-7852-6119-2 |
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Don Soderquist is
the retired Vice-Chairman and COO of Wal-Mart. In this book he describes and illustrates principles
that have propelled Wal-Mart to a $257 billion corporation. In an appendix he responds to criticisms of
Wal-Mart. [Whether you think of
Wal-Mart as an abomination or your second home, there is much to learn about
how to build and run a successful business. dlm] "The
Wal-Mart story begins with a man and his dream, supported by his convictions
of right and wrong." "If
vision, hard work, integrity, focus on the customer, passion for excellence,
and having fun at work is luck, then we, indeed, were some of the luckiest
people alive." "In my
judgment, the single most important element in the continued, remarkable
success of Wal-Mart is our culture."
(Introduction) Principle
#1. "Every successful venture
begins with a dream that requires determination, passion, and the willingness
to grow if it is to be fulfilled." (1) Sam Walton's
dream was to serve people well, build a winning team, work hard, impact peoples
lives for good, have fun, support his family, and honor his Lord. (1) "The total key for our stores is that we retain
our philosophy of being not only the dominant store in our areas, but more
importantly, that we do the best job of anybody around in rendering
effective, friendly customer service." (5, quoting from a 1971 memo
from Sam Walton) "Hold fast
to what is important, but change what needs to be changed." (7, quoting
James Champy) Principle #2.
"You must have a vision that allows you to see a bigger, better,
stronger you in the future--while never taking your eyes off of who you are
and what you are doing today." (11) "Vision is
the beginning point of any great endeavor?
"Vision is a picture of how we would like tomorrow to look--or,
put another way, how we would like ourselves to look tomorrow." (11) Sam didn't
envision Wal-Mart as the largest company in the world but "simply wanted
to provide a better shopping experience for people living in small
towns." (12) "The vision
grew, but the fundamental premise never changed: improve the standard of
living for everyday people by providing quality goods at low prices."
(13) Principle
#3. "To build a great company,
you must create a culture where everyone shares the same values, purposes,
and expectations of success." (25) "…a
leader's words and actions model what really matters, and as a result,
everyone gets on the same page and pulls together." (26) "…you will either create a corporate
culture on purpose--or your associates will accomplish the task for you, both
with and without your input!" (27)
"Culture is
the personality of an organization."
"Attitude is a huge component of culture…." People watch
their leaders every day. (27) Sam always stressed the attitude that we
can get the job done, no matter how great the task. (28) Values are those
things you hold to be intrinsically good.
They are the foundation of your culture, those principles you are
unwilling to compromise. (29) Wal-Mart's three
basic beliefs: ·
"We
treat everyone with respect and dignity, ·
We are
in business to satisfy our customers, and ·
We
strive for excellence in all that we do." (32) "We always
encouraged our managers to 'hire happy people.' Why?
The Wal-Mart culture is characterized by a positive attitude, which is
easier to hire than create." (41) For Reflection:
"Describe in two or three sentences your company's culture. Do you practice it on purpose?" (47) Principle
#4. "True success is achieved in
direct proportion to the degree that an organization treats its people with
respect and dignity--and believes in them enough to help them grow."
(49) "Treating
people with dignity was a key component of Sam's business plan." "Sam understood and believed in
people." (50) "Who needs
encouragement? Anybody who is
breathing!" (52, quoting Ken Blanchard) "When
people feel good about themselves, then they can feel good about others. When people feel good about each other,
they can work together as a team, and when people work as a team, they are
able to accomplish exceedingly more than anyone could hope to expect."
(53) "If you
want a successful business, your people must feel that you are working for
them--not that they are working for you." (60, quoting Sam Walton) "Is there a
better way to make people feel they are important than listening to their
ideas and then implementing them?" (70) "Has anyone
ever told you that you are an extraordinary person?" (73) "You and I can have a tremendous
impact on the job performances on the people around us--but more importantly,
we can have an impact on their entire lives." (74) For
reflection: "How would you rate
yourself in the following areas? ·
I am
interested in the well-being of others. ·
I
believe that others offer perspectives and talents I don't have. ·
I am a
good listener. ·
I am
open to new ideas--even if they are not my own. ·
I am
careful to take note of how happy and satisfied others are. ·
I am
an encourager." (79) Principle #5.
"You will succeed when you make a commitment to help your customers
succeed first." (81) "It's not
the employer who pays the wages.
Employers only handle the money.
It is the customer who pays the wages." (81 quoting Henry Ford) "The
primary motivation and driving force behind everything you do is based on the
impact it will have on your customer." "To succeed, it is essential
that everyone in the organization be passionate about the
customer." "Unfortunately,
in too many companies, the leaders say all the right things, but they don't
practice what they preach." (81) "With the
package being the window to the product, we thought it critical that the
package represent the same quality as the product inside." (86) "You can
serve people without satisfying them, but it's impossible to satisfy them
without serving them." "When
customers are satisfied over a long period of time, that's when we create
trust." "In any business,
customer loyalty can't be bought--it can only be earned…." (89) "Sam
instituted what he called the Ten Foot Rule.
When you come within ten feet of a customer, no matter what you are
doing, look up, look the customer in the eye, and speak to him."
(91) "We really
do believe in Sam's vision of improving the lifestyle of everyday Americans--and
people throughout the world. We came
to view ourselves as the 'agent' of the customers. As their agent, we believed that it was our
job to buy wisely for our customers, not just sell to them." (94) "A UBS
Warburg study found that Wal-Mart grocery prices are 17 to 20 percent lower
than other supermarkets, which has the greatest benefit for low-income
families." (98) Principle
#6. "Achieving excellence becomes
a reality when you set high expectations, humbly face and correct your
mistakes, stay optimistic, and avoid the quicksand of complacency."
(103) "One of the
keys to setting your expectations high is a spirit of optimism."
(104) "It is
vital for a leader to carefully dialogue with people to set goals that
stretch them and grow the organization.
He or she can push--but the goals must also be achievable and
supported with adequate resources." (113) "When everyone
is patting you on the back and praising your accomplishments, watch out;
that's when you are vulnerable."
(It is easy to become complacent.) (114) For reflection. "How would you define excellence in
your organization?" "What
are some obvious errors that need correcting in your company?" (115) Principle
#7: "Your success is in direct
proportion to your ability to plan, monitor, and ultimately execute all
phases of your business." (117) "The most
critical element in any strategy is the ability to actually make it happen;
to do it." (117) "When
leaders lose sight of the details, it is almost impossible for them to
effectively evaluate how well their organization is executing." "…have a system in place that allows
him or her (the leader) to monitor details at a glance." (118) "(Leaders
must) get out of their offices and head to where the action is." "But the key is for the leader to find
a way to continue to receive feedback, both formally and informally, in order
to effectively judge what's going on." (119) "If you want to be an effective
leader, you need to cultivate one-on-one feedback from trusted individuals
throughout your organization, touching all the different levels." (124) "The only
way to continue to reduce costs is to make it a priority and weave that
philosophy into the fabric of the culture of the organization." (127) For
reflection: "In your personal
life, what are some ways you can improve on your follow-through and
execution?" (135) Principle
#8. "To build a great company,
you must actively and continually seek out, evaluate, and invest in the tools
that best serve the people and aims of your organization." (137) "We've
never shied away from a technological advance if it would help us fulfill the
Wal-Mart vision." (143) "Wal-Mart's secret was to focus its IT
investments on applications that directly enhanced its core value proposition
of low prices." (144, quoting Bradford C. Johnson in the McKinsey Quarterly) Principle
#9. "The most basic operations in
your company represent tremendous opportunities for improvement, growth, and
savings. Don't overlook the
obvious." (151) "Wal-Mart
culture has helped us to avoid the temptation to believe that 'we have
arrived.' We are always acutely aware
that we still have a lot more to learn." (155) "When
solving problems, dig at the roots instead of just hacking at the
leaves." (157 quoting Anthony J. D'Angelo) "…opportunities
abound within every organization to improve operations, improve service, and
reduce costs. You just have to keep
looking for them. No area of a company
need be stagnant--if you create an environment where your people accept that
there is always a better way to do things…." (162) For
reflection. "What aspects of your
business need more attention in order to improve?" (164) Principle
#10. "When you create win-win
relationships with your business partnerships based on trust and open
communications, you maximize your potential for growth." (165) Wal-Mart and
Procter and Gamble found each other very hard to work with because they were suspicious
of each other's motives until they began open up, trust each other with
company information, and work closely together. They came to the conclusion they were not
adversaries or competitors but on the same side, both wanting to sell more
merchandise to customers. (166-67)
Wal-Mart eventually changed the way they transacted business with all
of their suppliers. The new trust
opened up new and more effective ways of doing business. "We gave our suppliers direct access
to our computers to follow and analyze on their PC screens the retail sales
of all their items…." (171) The
relationship must be beneficial for all parties involved. Everyone wins. (172) For
reflection. "Are there
relationships in your business that could offer substantial improvements in
performance if you established greater levels of communication?" (176) Principle
#11. "The ongoing success of your
organization is in direct proportion to your ongoing commitment to
grow." (177) Principle
#12. "When you cultivate a spirit
of charitable giving and civic involvement within your organization, you
exponentially increase your tangible and intangible returns--including the
personal character of your team." (185) "Wal-Mart
has been involved in its communities and all forms of charitable giving from
the very beginning--because Sam wanted to.
It's the way he thought. It's
the way he was." (185)
"We're talking about the Wal-Mart culture. Sam wove caring throughout our
culture." (186) "Each
store, club, and distribution center has its own budget for charitable
giving, and each unit gives its money away one check at a time." (188) For
reflection. "Does your
company--do you--consider giving important?
Why or why not?"
(199) [As a mission
organization, do you do any kind of charitable giving beyond your own
ministry? dlm] |
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