New generation of execs leads Wal-Mart into the next century - executives - Chapter 1: Wal-Mart's Next Generation

Discount Store News, Dec 5, 1994 by Don Longo

During a 30-year career turning a small Arkansas five-and-dime store into the world's largest retailer, Sam Walton's greatest accomplishment may have been the way he motivated and trained a workforce that became the envy of the business world. No company has ever empowered, and enriched, its associates as Wal-Mart has.

Now, two and a half years after Walton's death, Wal-Mart is led by a triumvirate consisting of Sam's son Rob, 50; David Glass, 59, (the former drug chain exec who brought professional management to Sam's young company 18 years ago); and Don Soderquist, 61, vice chairman and chief operating officer (the former Ben Franklin president whose warm, outgoing personality most closely resembles the founder's).

Rob Walton, Glass and Soderquist have positioned the company to reach $100 billion in sales by 1995. Even more amazing is the possibility that the Bentonville Behemoth will top $200 billion in sales by the year 2000.

To achieve that figure, the company will look to a third generation of leaders. In many ways, Walton, Glass and Soderquist can be viewed as stewards of Sam's legacy. Future leaders, trained in the ways of Wal-Mart, will spearhead the retailer's strategies to dominate not just U.S. general merchandise retailing, but also supermarket retailing and even many international retail markets.

The four execs most likely to be counted on to achieve this historic growth are Bill Fields, 45, president of the Wal-Mart discount store division; Dean Sanders, 44, president of the Sam's Club division; Bob Martin, 46, president of Wal-Mart's international division, and Nick White, 50, executive vp of the supercenter division.

Each were showcased at Wal-Mart's first-ever analysts meeting in Bentonville, Ark., earlier this fall. Although the press was not invited, DSN did receive reports from stock analysts who attended. From those reports, as well as observations at the annual shareholders meeting, personal experience and other sources, here's a brief synopsis of the men and the state of the divisions they lead.

Bill Fields

"We're merchants," said Fields, the large sometimes-standoffish Arkansas native who climbed the ranks to become chief executive of the discount store division in 1992. Previously, fields was the chain's top merchandising exec, and before that its head of distribution and transportation.

With the discount store division growing to more than 2,000 stores and sales productivity already pushing past $300 per sq. ft., Fields has his hands full trying to maintain Wal-Mart's typically double-digit sales growth rates. At the analysts meeting, Fields said the chain will focus on apparel, upgrading Wal-Mart's sportswear offerings with improved fashion and quality on basic items, while maintaining a price gap between itself and competitors on similar garments.

Wal-Mart's apparel business as a percentage of total sales is one of the lowest in the industry (less than 27%). Any increase in that higher margin business will mean big bucks dropping to the bottom line. But at what risk? The chain has always abhorred taking markdowns, which are much more likely on fashion apparel goods than on hardware, stationery or sporting goods.

To counter this threat, Fields noted that the chain has been working more closely with vendors; products are being tested more carefully and returns to vendors monitored closely.

The division president is an intimidating presence among vendors, who remember him as a demanding merchant. At the same time, Fields is often described as the ultimate good ol' boy. He also possesses a self-deprecating sense of humor, which was exhibited earlier this year when he let associates give him a buzzcut on stage at the semi-annual district managers meeting in Tulsa, Okla.

The haircut was his way of paying off a wager he made with one group of managers. He promised to let them shave his head if they achieved various performance goals. Although they spared him the Telly Savalas treatment, the haircut payoff was probably more effective than a monetary reinforcer for their good performance.

After merchandising, Fields' favorite topic is people and training. At the analysts tour, he showed real pride talking about Wal-Mart's computer-based learning program, which has improved employee turnover, reduced time it takes to train new employees by half, and has put more and better sales-related associates onto the selling floor.

Fields' discount store division will have to top $100 billion in sales in the year 2000 for the corporation to break the $200 billion sales barrier.

Dean Sanders

An operations executive, Sanders became head of the Sam's Club operation in 1992. Once the shining star of all retailing--no chain ever grew from zero sales to a billion dollars in annual volume as quickly--Sam's Club is now considered Wal-Mart's poor relation. After being largely responsible for the corporation's climb to the No. 1 retailer position during the 1980s and early '90s, Sam's Club this year has suffered from subpar sales and earnings results.