Wal-Mart: they've only just begun - Publisher's View - column

Discount Store News, July 22, 1991 by John Failla

Wal-Mart: They've Only Just Begun

What's most interesting for me about Wal-Mart's emergence as the world's largest general merchandise retailer is not that it passed Kmart to assume that position this past year, but the fact that over the next several years it will zoom past the pack in route to a stated goal of being a $100 billion company by the year 2000.

During the recent shareholders meeting, the rallying cry of "We've Only Just Begun," rang loud and clear.

While many observers with a limited understanding of Wal-Mart question its ability to achieve that goal as Mr. Sam passes the reins over to his successors, this observer truly believes that the environment and team are in place to achieve those results. Wal-Mart's culture is best appreciated by taking a close look at the five values which make up "The Wal-Mart Way."

1. Customers: Sam himself puts it best when he says that 75% of Wal-Mart's success formula is based on the fact that its people are "mission bound to take care of the customer." The notion of exceeding customer expectations is a way of life for all associates.

2. People: When executive vice president, Paul Carter, refers to Wal-Mart's 340,000 associates as "the heart of Wal-Mart," he has said it all. Wal-Mart has successfully created an environment where "ordinary people can become overachievers," said chief executive officer David Glass. A true entrepreneurial spirit is instilled in the great majority of these associates as 80% of all Wal-Mart full-time associates are stockholders. They believe and know that their efforts are on their own behalf as well as for the company;

3. Productivity: Wal-Mart's focus on activities that will increase sales and individual store productivity will result in delivering average sales per square foot of $300 by 1994.

4. Innovation: The list of Wal-Mart innovations goes on and on. There's a premium and value placed on trying new ideas and learning at Wal-Mart. Testing new concepts is encouraged from department managers on up the line. When successful ideas take hold, they are then rolled out chainwide with great speed.

5. Continuous Improvement: Wal-Mart's new "Total Quality" program will provide the framework for the type of ongoing improvement in all operational areas that have become recognized as a hallmark of other truly great companies like Procter & Gamble and Rubbermaid. The intensity of these cultural values are clearly ingrained throughout all levels of the organization. All it takes is a conversation like the one I had during shareholders' weekend with a customer service manager from Wal-Mart's West Orange, Texas, store to feel the power of these convictions.

As a student of business management, Sam Walton knows that a leader's true mark will not be measured by his own success, but by the degree to which his successors are prepared to perpetuate the vision.

After many visits to Wal-Mart's headquarters over the past several years, I can only conclude that Sam has organized the deepest bench of people in all of retailing.

Wal-Mart not only has a front line team of six different executives who could lead the company into the next millennium, but the retailer is blessed with a second line of young, talented and aggressive executives like Bill Fields, Dean Sanders, Nick White, Colon Washburn, Bobby Martin, Tom Coughlin, Joe Hatfield, Dave Dible and others who are waiting in the wings to make their mark.

It will truly be exciting to observe how Wal-Mart exports its culture, values and formulas to other parts of the world. The recent announcement of Wal-Mart's joint venture in Mexico brings it one step closer to a position where it operates stores throughout all of North America.

The annual SPARC Awards banquet, which is scheduled for Sunday, Aug. 11th, will honor Wal-Mart's chief executive officer, David Glass, as Discounter of the Year. There is no doubt that this dinner will certainly be an exciting industry event. In true Wal-Mart fashion, Dave is insisting that this award be accepted on behalf of all 340,000 Wal-Mart associates.

I think vice chairman, Don Soderquist, summed it up best at a recent Saturday morning meeting when he said, "We're truly fortunate to have an executive like David Glass leading our company."