(Sam Walton, founder of world's largest retail chain-Walmart, is one of the greatest leaders and visionaries the earth has ever seen. I was totally in awe by this giant when I read his autobiography-Made in America. With the encouragement of Mr.Ashok Kanetkar, a wonderful person and a visiting faculty here at SIBM, I wrote this article)
"Throughout the
centuries there were men who took first steps, down new roads, armed with
nothing but their own vision”- Ayn
Rand (The Fountainhead)
 |
| Man of mind blowing passion and energy-Sam Walton |
Sam Walton, founder of Walmart
stores Inc. was a visionary businessman who revolutionized the retail industry
in America. He started working as a low level clerk in JC Penny retail stores
and worked his way up to create the world’s largest retail chain, Walmart.
Until 1985, when Forbes magazine named Sam Walton-the richest man in
America, nobody really cared much about this unassuming, small town guy
whose company was doing around $30 billion in annual sales at that time. All of
a sudden Sam Walton became the focal point of media.
In the words of Sam Walton
“……….The
next thing we knew, reporters and photographers started flocking down here to Bentonville, I guess
to take pictures of me diving into some swimming pool full of money that they
imagined I had, or to watch me light big fat cigars with $100 bills while the
hootchy-kootchy girls danced by the lake ”
But here was a guy who would
neither give any appointment to the reporters for their interviews about his
life style nor provide any flashy content for their magazines but rather
shocked them with his down to earth habits like riding in his pickup truck with
his bird dogs (for hunting), wearing shirts that were bought in his own Walmart
stores, and taking haircuts at a local barber shop off the street. They became
curious and the more they pulled the ropes, the more ‘interesting’ things they
came to know: being the head of company Walton would refuse to fly first class;
though he had a passion for flying and bought some aircrafts nothing was bought
new; whenever they go on buying trips they (Walmart negotiators, including
Walton himself) would share a room between two persons and eat (if they get
time) at cheap restaurants. So came the depiction in the media
“The
media really portrayed me as a really cheap, eccentric recluse, sort of a
hillbilly who more or less slept with his dogs in spite of having billions of
dollars stashed away in a cave”- says
Walton in his auto-biography.
This makes one wonder- how a
person can be so dedicated or from other point of view so ‘frugal’ (driving in
an old pickup truck when being the richest man on earth?). However his being so
strict with money is only one face of the coin.
The
other face is his core philosophy which, in fact, was one of the corner stone
principles behind Wal-Mart’s success. This principle had been ingrained in him
since his childhood.
“We
learned from a very early age how much hard work it took to get your hand on a
dollar, and when you did it was worth something. One thing my mother and dad
shared completely with me was their approach to money: they just didn’t spend
it”- Sam Walton (Made in America)
How does that relate to the
success of Wal-Mart?
Wal-Mart has championed and
excelled in the concept of discounts-the cheaper you offer, the more people
will buy. Hence the idea was to keep costs as much low as possible and offer
the goods at as much low prices as possible. As Walton says
“Every
time Wal-Mart spends one dollar foolishly, it comes right out of our customers’
pockets. Every time we save them a dollar, that puts us one more step ahead of
the competition- which is where we always plan to be.”
Of course, Walton was
successful in this aspect. To this day there is a deep rooted culture in
Walmart to keep the costs down allowing it to price to the lowest level and
that paved the way for its brilliant success. Not just being frugal, Sam Walton
had some other values that he believed in and he would stick to them
obsessively. Walton had a ferocious passion towards his business which would,
sometimes, drive his employees (‘associates’-as he calls them) crazy. Says
Walton……
I
think I overcame every single one of my personal shortcomings by the sheer
passion I brought to my work. I don't know if you're born with this kind of
passion, or if you can learn it. But I do know you need it. If you love your
work, you'll be out there every day trying to do it the best you possibly can,
and pretty soon everybody around will catch the passion from you —like a fever.
It's
almost embarrassing to admit this, but it's true: there hasn't been a day in my
adult life when I haven't spent some time thinking about merchandising. It has
been an absolute passion of mine. It is what I enjoy doing as much as anything
in the business. (Made in America)
A look at the growth of Walmart
vindicates, albeit partially, his hunger for growth.
Year
|
No. of Stores
|
Sales
|
1970
|
32
|
$31 million
|
1972
|
51
|
$78 million
|
1974
|
78
|
$168 million
|
1976
|
125
|
$340 million
|
1978
|
195
|
$ 678 million
|
1980
|
276
|
$1.2 billion
|
Walton, with his insatiable
desire to improve and learn more and more, would always search for a new idea
that he can implement in Walmart. The following is one of such hundreds of
incidents depicting the intensity of his desire.
KURT BARNARD, RETAILING CONSULTANT:
"I was executive vice
president of the discounters' trade association, working in my New York office
one day in 1967. My secretary said there was a man out front who wanted to join
our group. I said I would give him ten minutes. So in comes this short, wiry
man with a deep tan and a tennis racket under his arm. He introduced himself as
Sam Walton from Arkansas. I didn't know what to think. When he meets you, he
looks at you—head cocked to one side, Forehead slightly creased—and he proceeds
to extract every piece of information in your possession. He always makes
little notes. And he pushes on and on. After two and a half hours, he left, and
I was totally drained. I wasn't sure what I had just met, but I was sure we
would hear more from him."
First
true information-age CEO
As early as 1966, when he had
20 stores, he attended an IBM school in upstate New York. His goal: to hire the
smartest guy in the class to come down to Bentonville, Ark., and computerize
his operations. He realized that he could not grow at the pace he desired
without computerizing merchandise controls. He was right, of course, and
Wal-Mart went on to become the icon of just-in-time inventory control and
sophisticated logistics--the ultimate user of information as a competitive
advantage. Today Wal-Mart's computer database is second
Only to the Pentagon's in
capacity, and though he is rarely remembered that way, Walton may have been the
first true information-age CEO.
Sam
Walton was a man of principle. He believed in his values so obsessively that he
was just incapable of breaking those principles (one day before dying in
hospital from cancer, he inquired the local Walmart store manager about the
performance of the store!). He wanted to set an example, so that the right kind
of culture is set in the organization. And so was he successful in his vision.
To this day that culture of keeping costs low and leveraging communications can
be seen in Walmart, which has grown into the mammoth that is with $420billions
annual sales (world’s largest company in terms of sales), employing over 2
million people (largest private employer). For any company to achieve this kind
of success there should be a strong foundation of basics and Sam Walton had just
provided that for Walmart.
(I read Sam Walton's autobiography, Made in America, in the month of August, 2011. )
