When you ask someone their opinion of Wal-Mart, they are most likely going to say one of three things: it’s cheap, it kills small businesses, or it is a greedy company that mistreats its employees. While those points may or may not be true, it operates 11,450 stores in 27 countries, employs 2.2 million associates around the world, and made $482.2 billion in fiscal year 2015. As big as it is, it is not surprising that it seems to attract bad press or that many people have a negative perception of the company based off of this bad press.
As an editor, I am constantly reading news and press releases to stay up-to-date on companies. As a result of this, I have read countless articles on Wal-Mart, but most have a negative connotation, even the ones reporting the company doing something good. So when I heard Tai Lopez suggest the Sam Walton book, Made In America, during a talk he was giving, I quickly brushed it off because I already read so much on the company. But he continued to mention it throughout his talk and made a point I couldn’t argue with. He asked why young entrepreneurs and professionals were spending all their time reading books by the newly successful when they could read a little $5 book by the most successful man in the history of the retail industry.
Now that I have read the book, I can say that every entrepreneur, professional, or anyone in the business world should read Sam Walton’s Made In America. Not only do I now have a more in-depth understanding of the industry, but I actually gained an appreciation for Wal-Mart. I truly believe that to understand something you need to know where it came from. I wholeheartedly expected to read this book and have my beliefs confirmed, but it actually did the opposite.
What struck me the most as I read the book was the emphasis Sam Walton put on the employees. He talked extensively throughout the entire book of how the customers are the most important, but the way to make customers happy is by taking care of the associates. (I will provide quotes below). This is why it baffles me that this is one of the main complaints about the company today. I am left with the question of when and how did things get so turned around when the founder couldn’t have made his feelings more clear?
Sam Walton on associates:
“What’s really worried me over the years is not our stock price, but that we might someday fail to take care of our customers, or that our managers might fail to motivate and take care of our associates. I also worried that we might lose the team concept, or fail to keep the family concept viable and realistic and meaningful to our folks as we grow.”– (pg. 137)
“We didn’t pay much. It wasn’t that I was intentionally heartless. I wanted everybody to do well for themselves. It’s just that in my very early days in the business, I was so doggoned competitive and so determined to do well, that I was blinded to the most basic truth, really the principle that later became the foundation of Wal-Mart’s success. You see, no matter how you slice it in the retail business, payroll is one of the most important parts of overhead, and the overhead is one of the most crucial things you have to fight to maintain your profit margin. That was true then, and it’s still true today. Back then, thought, I was so obsessed with turning in a profit margin of 6 percent or higher that I ignored some of the basic needs of our people, and I feel bad about it. …. And here it is: the more you share profits with your associates- whether it’s in salaries or incentives or bonuses or stock discounts- the more profit will accrue to the company”. – (pg. 163)
“Also, we as a company need to do whatever we can to encourage and help our associates earn their college degrees. We need these folds to get the best training they possibly can. It opens up their career opportunities, and it benefits us.” – (pg. 217)
The second concept that struck me throughout the book was Sam Walton’s stance on wealth. The common perception of the Walton’s is that they are a money hungry family who only care about wealth. After reading the book, I don’t think this is true. First, most of the Walton’s billions are in assets, which mean it is tied up in stocks, meaning they don’t even have access to much of the money. While they could sell some of the stocks to get access to this money like many families, Sam Walton was so against it that he threatened to come back and haunt them if they ever sold. So while they of course are rich, it isn’t the way most people think. The Walton’s are also extremely private, which might add to their stereo type. This was a topic that was frequently discussed throughout the book. (I will provide quotes below). The simplest way to put it is this: Sam Walton was a simple all American man that cared about quail hunting, fishing, camping, tennis, and the company. He drove an old pick-up truck and didn’t believe in idly spending his money. Don’t believe me? Read the book.
Sam Walton on wealth and money:
“Now, when it comes to Wal-Mart, there’s no two ways about it: I’m cheap. A lot of what goes on these days, with high- flying companies and these overpaid CEO’s, who’re really just looting from the top and aren’t watching out for anybody but themselves, really upsets me. It’s one of the main things wrong with American business today.”- (pg. 12)
“I do admit to worrying sometimes about future generations of the Walton’s. I know it’s unrealistic of me to expect them to all get up and throw paper routes, and I know it’s something I can’t control. But I’d hate to see any descendants of mine fall into the category of what I’d call “idle rich”- a group I’ve never had much use for. I really hope that somehow the values of both Helen and I, and our kids, have always embraced can be passed on down through the generations. And even if these little future Walton’s don’t feel the need to work from dawn on into the night to stay ahead of the bill collector, I hope they’ll feel compelled to do something productive and useful and challenging with their lives. Maybe it’s time for a Walton to start thinking about going into medical research and working on cures for cancer, or figuring out new ways to bring culture and education to the under privileged, or becoming missionaries for free enterprise in the third world or maybe- and this is strictly my idea- there’s another Walton merchant lurking in the wings somewhere down the line.” – Sam Walton (pg. 99)
“Some families sell their stock off a little at a time to live high, and then-boom-somebody takes them over, and it all goes down the drain. One of the real reasons I’m writing this book is so my grandchildren and great grandchildren will read it years from now and know this: If you start any of that foolishness, I’ll come back and haunt you. So don’t even think about it.” Sam Walton (pg.9)
There is no question, to me at least, that Sam Walton is someone to be admired and what he built and how he built it is amazing, but saying that, the company seems to have gone astray and CEO Doug McMillon has his work cut out for him. Thankfully, this past month Wal-Mart seems to be slowly taking action. These past two weeks alone there have been countless stories on how they are encouraging chicken and egg suppliers to curb antibiotic use and improve living conditions, how they donated money to relief efforts in Texas, how they are increasing the wages of associates, are allowing more relaxed uniform, different in-store music, and are improving temperatures. When preparing for this article, I visited both a local supercenter and neighborhood market and was pleasantly surprised to find that both had been remodeled, the shelves were stocked, and I was greeted by associates throughout the store. Even Fortune came out with a story on the potential of Wal-Mart under McMillon’s leadership: The man who’s reinventing Wal-Mart.
So whether you hate the company, or it is your favorite company, or you are in the retail business (which I am guessing you are considering you’re reading this) I would suggest you to visit Amazon and buy a little $5 book by a guy that made a multi-billion dollar business.
“Now I realize the simple truth: I got into retailing because I was tired and I wanted a real job.”-Sam Walton (pg. 22)