Sam Walton: Master Change Agent

Sam Walton: Master Change Agent
David Hatch
Samuel Moore Walton, founder of Wal-Mart Stores, Inc., was an uncommon man living a common life.
When Sam Walton died quietly following a long battle with bone cancer, he left behind a legacy as a folk hero, one of the most influential (and richest) retailers of this century.
The character of "Mr. Sam," as he liked to be called, was made during the Depression. The youngest Eagle Scout in Missouri, state champion quarterback, student council president, and Army officer, Sam learned the value of thrift, hard work, and leadership.
Once out of college and the Army, Sam aspired to an MBA degree and dreamed of becoming president of the United States. Reality intervened, however, and he found himself in Iowa working for JC Penney at a salary of $85 a month. During those lean years, he honed skills for the retail world. He continually pushed retailing to its limits, always experimenting, promoting, changing, and practicing. And yet he remained fixed on what he had learned from James Cash Penney himself — always put customer satisfaction ahead of profits.
In 1945, at the age of 44, Sam opened his first five-and-dime store in Newport, Arkansas. Subsequent success had little effect on the man, though. Ever frugal and modest, he lived in the home he built in 1959 and drove an old pickup truck to work. When he rented a car, it was a subcompact, and he admitted buying his $45 shoes at Wal-Mart.
Wal-Mart's corporate offices are cramped and cheaply furnished. Mr. Walton believed that executives should spend more time on the selling floor than behind fancy desks. To make sure they did, he assembled a small air force that whisked them around the country, visiting Wal-Marts Monday through Friday. Each Saturday morning, back at corporate headquarters, they discussed their findings.
Mr. Sam would often rise before dawn and drop in unannounced at some Wal-Mart store. There he would drink coffee and chat with his favorite folks — the hourly-wage "associates" who stock the shelves and wait on the customers. He always felt the best ideas come from them. The Wall Street Journal noted that on one occasion, he landed his plane next to a highway 100 miles short of his destination. He then flagged a ride with one of his truck drivers and listened. In his own words, "It was so much fun." He piloted his Cessna sometimes to six stores a day and more than 300 a year.
Referring to his surprise visits, he noted in an interview with Fortune magazine: "This is still the most important thing I do — to go around to the stores. I'd rather do it than anything. I know I'm helping our folks when I get out to the stores. I learn a lot about who's doing good things in the office. I also see things that need fixing, and I help fix them."
Much of Sam's work was done with his ears. If he could not get to all of his Wal-Mart associates, he created ways for them to reach him. One was the traditional picnic he hosted in his own front yard. Up to 2,500 employees travelled large distances to enjoy a box lunch within the shadows of their honored leader. He mingled freely, continually asking questions and patting people on the back. Those unable to attend sent letters about 4,000 a month poured into Wal-Mart headquarters. Most contained praise, some were critical, and a few offered new ideas all were answered.
Sam listened to all stakeholders, including employees, customers, suppliers, stockholders, distributors, or even competitors. He held large stockholder meetings with 10,000 people in attendance. By listening to distributors, he plotted a strategy to develop his own fleet of trucks, now one of America's largest. He often visited stores of competitors. To him the competition was a great source of learning.
Because of his own work ethic and concern for people, he had high expectations of others. In a 1986 issue of Wal-Mart World, the company's newsletter, he said: "Our method of success, as I see it, is Action with a capital A, and a lot of hard work mixed in. We've said it through the years: Do it. Try it. Fix it. Not a bad approach, and it works. There are a lot of people out there who have some great ideas, but nothing in the world is cheaper than a good idea without any action behind it. We must be action-oriented doers. It's a whole lot more fun, and accomplishes so much more."
While he expected much, Sam also gave much. He treated people right; he devised a generous profit-sharing plan that is the envy of the industry; and he insisted his managers work with people. His idea of people management is best stated in his own words:
"Most managers lead by fear and intimidation. They think that being tough is being a leader. Nothing is further from the truth. Good leaders add the human factor to all aspects of their business. If you manage through fear, your people will be nervous around you. After a while, they won't approach you with a problem, so the problem gets worse."
"They will be afraid to be creative or express a new idea. They don't feel like they can take a chance because they won't want to risk your disapproval. When this happens, the people suffer, and the business suffers, too. In Wal-Mart, we must treat our people with genuine respect and courtesy. Build strong relationships with your people. Help your associates grow and be all they can be. Show that you really care. You must become a master at communicating with them all aspects of your business and their place in it. The best way you can let them know how much you value their contributions is to show them and tell them, one-on-one. Get to know your people, their families, their problems, their hopes and ambitions. Appreciate and praise them as individuals. Show your concern daily. We are all just people with varying strengths and weaknesses. So true commitment, plus a generous portion of understanding and communication, will help us win. Leaders must always put their people before themselves. If you do that, your business will take care of itself."
His vision remained focused on keeping his family, employees, and customers happy. He not only provided a better environment for the world of Wal-Mart, but for the world at large.
David Hatch, Ph.D., is a Senior Assessment Consultant for Franklin Covey.