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



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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