Walmart became the largest company in the world in 2002. That surprised some folks. Fortune celebrated the occasion by asking: “How did a peddler of cheap shirts and fishing rods become the mightiest corporation in America?”
The business press likes dramatic new initiatives. It seems to prefer companies located in major urban centers, preferably on the coasts. And it mistakes complexity for sophistication.
Like the company he founded, Sam Walton was sophisticated, but not fancy or flashy. A man I interviewed told me about a visit to Walmart’s headquarters in Bentonville, Arkansas where he was to meet Sam Walton. He was stunned when Walton came to the airport to pick up and take him back to headquarters in his pickup.
Walton was not an overnight success. Before he opened the first Walmart, in Rogers, Arkansas in 1962, he was one of the most successful variety store managers in the country. Just after World War II, Walton combined his savings with a loan from his father and bought a Ben Franklin dime store franchise for a store in Newport, Arkansas.
Walton’s goal was to “make my little Newport store the best, most profitable variety store in Arkansas within five years.” He kept the store open longer than other stores. He bargained hard with suppliers but placed larger orders than other variety stores. He passed the savings on to his customers in the form of lower prices. By 1948, his store had tripled in volume and was not only the most profitable store in Arkansas but in a six-state region.
Walton repeated that pattern again and again. He scoured the trade press, looking for ideas and talented people.
He talked to people. He went to the waiting room of the Walmart purchasing department to chat with salespeople. He visited the stores, where he had conversations with customers and Walmart Associates. Lee Scott (Walmart CEO 2000-2009) says that Sam Walton started the tradition of visiting stores every week. He told his senior managers, “Nothing important happens in Bentonville.”
Mr. Sam Rule Nr 1: Get out. Wander around. Have conversations with your people, your customers, and your suppliers. Don’t just visit and chat. Use what you learn to make things better.
Mr. Sam Rule Nr 2: Leave people feeling good.
Once, on a visit to a store, Sam Walton spotted a young woman Associate who was folding sweaters for a display but getting it wrong. He showed her how to fold the sweaters correctly. He worked with her until she got it right.
He could have left it there, but he didn’t. Instead, he called other Associates to come over. He told them that the young woman really knew how to fold sweaters. And he asked her to demonstrate for her peers, so they would learn to do as well.
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