Fresh ideas strengthen deep cultural roots

Discount Store News, Oct, 1999

One of Wal-Mart's strengths today is its deep pool of management talent capable of running an increasingly complex and global business.

The depth of management is a benefit of a strategy that founder Sam Walton instituted early in Wal-Mart's evolution. His approach was to cross pollinate executives by having them serve in different jobs. Individuals reflective of that strategy now occupy some of the most senior positions in the company.

However, as Wal-Mart has grown, the company's senior management team has become more of a blend of those promoted internally and those hired from outside the company. The result is a management team that combines long-time Wal-Mart executives who are the byproduct of a cross pollination-based succession strategy with others who brought fresh ideas to Wal-Mart when they were hired from other companies.

The one thing all have in common, though, is an attitude of servant leadership that considers the most important people in Wal-Mart to be the associates at the front lines who take care of customers. It is the job of senior executives to serve those associates, and it can be a hard adjustment for outsiders who join the company.

The servant leadership approach has endured because stability at the senior-most level continues to be a Wal-Mart strength. Chairman Rob Walton, president and ceo David Glass and senior vice chairman Don Soderquist have provided consistent direction at Wal-Mart for the past two decades.

Rob Walton, 54, is the eldest son of founder Sam Walton. Of Sam and Helen's four children, Rob has been extensively involved in the company since its public offering in 1970. He has served as vice chairman and in 1992 was named chairman following his father's death.

In addition to Walton, Glass and Soderquist are two individuals known throughout the business world for leading Wal-Mart to new heights during the past two decades. In 1988, when Sam Walton removed himself from day-to-day operations, Glass was named president and ceo and Soderquist became vice chairman and coo.

Because both are approaching traditional retirement age, a great deal of interest was generated in early 1999 when several key promotions were made that appeared to clarify Wal-Mart's succession plans.

Soderquist was named senior vice chairman, which cleared the way for Lee Scott, 50, to continue his rapid ascension through the management ranks. Scott was named vice chairman and coo after previously serving as president and chief executive officer of the Wal-Mart Stores division. The promotion gave Scott, who had also previously led Wal-Mart's merchandising and logistics departments, responsibilities for International and Sam's Club operations in addition to those he already had for domestic operations.

Also promoted at the time was Tom Coughlin, 50, to the position Scott held as president and ceo of the stores division. Coughlin is another product of Wal-Mart's cross pollination strategy. He joined the company as vice president of loss prevention, worked in human resources, Sam's Club, and also led Wal-Mart's specialty divisions.

The promotions of Scott and Coughlin were widely viewed as Wal-Mart cementing its executive succession plan for the new millennium.

Although both have been with Wal-Mart for more than two decades, other key executives have been with the company for less time. John Menzer, 48, president and ceo of Wal-Mart International, and Tom Grimm, 54, president and ceo of Sam's Club, are two examples.

Wal-Mart looked outside the company to fill the cfo position in 1995 and found Menzer working as president and coo at Ben Franklin. After serving three years as Wal-Mart's cfo, Menzer got cross-pollinated and was named president and ceo of Wal-Mart International.

Grimm is another example of an outsider who joined the company and has made the cultural adjustment. After he was with Sam's only a few months, Grimm rode a Harley Davidson motorcycle on stage at his first meeting with Sam's associates in early 1999.

Despite retirements and departures of long-time Wal-Mart executives, the ranks of management are still filled with veterans.

Paul Carter is a Wal-Mart veteran with more than two decades of experience who today serves as executive vice president of Wal-Mart and president of Wal-Mart Realty Company. He is responsible for a team of real estate professionals who find locations for 150 supercenters annually, the distribution centers to support them and locations for Wal-Mart's other formats. Carter also has served as executive vice president of special divisions and chief financial officer.

Nick White serves as executive vice president of the food division, a position he's held since 1989, and has been with Wal-Mart for a quarter century. White also served as a senior vice president of Sam's during the 1980s.

Another veteran merchant tapped for an area of increasing importance is J.R. Campbell. He has been with Wal-Mart since 1978 in a variety of positions, including a senior vp/gmm post and head merchant at Sam's. This year he was named president of global sourcing with responsibility for coordinating all sourcing activities and establishing global vendors to maintain the company's growth.