Author: Sam Walton
My Rating: 5/5
Summary: Autobiography of Sam Walton who is one of the most influential American businessmen of all time. Sam shares his insights into what made Wal-Mart successful over many decades.
My Takeaways
Sam Walton valued a the power of a dollar
He had a bias for action.
He was always studying the competition and experimenting with his store. He took a risk and put an expensive ice cream machine in front of his first store which attracted more customers
Sam lured in good managers as partners who split the profits.
Partner works in a number of different ways. First, it enables us to control Wal-Mart through the family and keep it together, rather than having it sold off in pieces haphazardly.
The best way to reduce paying estate taxes is to give your assets away before they appreciate.
It never occurred to Sam that he might lose. His mentality was almost as if he had a right to win. Thinking like that often seems to turn into sort of a self-fulfilling prophecy.
Speak to people coming down the sidewalk before they speak to you.
Sam’s strength was his ability to sell. He had always sold things.
In retailer language, you can lower your markup but earn more because of the increased volume.
I think my constant fiddling and meddling with the status quo may have been one of my biggest contributions to the later success of Wal-Mart.
“Two things about Sam Walton distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.”
They assumed we couldn’t be in it for the long haul. Some folks no doubt figured we were a little fly-by-night—you know, in the discount business today but out selling cars or swampland tomorrow. I think that misunderstanding worked to our advantage for a long time, and enabled Wal-Mart to fly under everybody’s radar until we were too far along to catch.
If you want the people in the stores to take care of the customers, you have to make sure you’re taking care of the people in the stores. That’s the most important single ingredient of Wal-Mart’s success.
Without the computer, Sam Walton could not have done what he’s done. He could not have built a retailing empire the size of what he’s built, the way he built it.
Sam always questioned everything. It was important to me to make them think that maybe the technology wasn’t as good as they thought it was, or that maybe it really wasn’t the end-all they promised it would be. It seems to Sam that people try just a little harder and check into things a little bit closer if they think they might have a chance to prove me wrong.
Sam never dwelled on the negative, but debt weighed heavy on Him. If something happened and everybody decided to call their notes, I kept thinking, we would be sunk. Maybe that’s what being raised in the Depression does to you, but I wanted out of that debt in the worst way.
Sam let everyone know they were going to have to compete for our business, just like he had always made everybody else compete for business.
Sam’s early morning time is tremendously valuable: it’s uninterrupted time when he thinks and plans.
If you take someone who lacks the experience and the know-how but has the real desire and the willingness to work his tail off to get the job done, he’ll make up for what he lacks.
Our relationship with the associates is a partnership in the truest sense. It’s the only reason our company has been able to consistently outperform the competition—and even our own expectations.
The larger truth that I failed to see turned out to be another of those paradoxes—like the discounters’ principle of the less you charge, the more you’ll earn. 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. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to drag strangers into your stores for one-time purchases based on splashy sales or expensive advertising.
So, in the whole Wal-Mart scheme of things, the most important contact ever made is between the associate in the store and the customer.
Profit sharing has pretty much been the carrot that’s kept Wal-Mart headed forward. Every associate of the company who has been with us at least a year, and who works at least 1,000 hours a year, is eligible for it. Using a formula based on profit growth, we contribute a percentage of every eligible associate’s wages to his or her plan, which the associate can take when they leave the company—either in cash or Wal-Mart stock.
You have to give folks responsibility, you’ve got to trust them, and then you’ve got to check on them.
Another important ingredient that has been in the Wal-Mart partnership from the very beginning has been our very unusual willingness to share most of the numbers of our business with all the associates. It’s the only way they can possibly do their jobs to the best of their abilities—to know what’s going on in their business.
Keeping so many people motivated to do the best job possible involves a lot of the different programs and approaches we’ve developed at Wal-Mart over the years, but none of them would work at all without one simple thing that puts it all together: appreciation. All of us like praise. So what we try to practice in our company is to look for things to praise. Look for things that are going right. We want to let our folks know when they are doing something outstanding, and let them know they are important to us.
The Saturday morning meeting is where we discuss and debate much of our philosophy and our management strategy: it is the focal point of all our communications efforts. It’s where we share ideas we’ve picked up from various places. And while it’s not the most exciting part of the meeting, sometimes I like to read from management articles that pertain to our business.
Sam uses his management meetings for three purposes: to share information, to lighten everybody’s load, and to rally the troops. Believe it or not, the majority of our folks wouldn’t miss a Saturday morning meeting for anything.”
For the meeting to work, it has to be something of a show. We don’t ever want to let it become predictable. One day, we might do a few calisthenics. Another day we might sing. Or maybe do the Razorback cheer. We don’t want to plan it all out. We just want it to unfold. It is so unconventional that I don’t think anyone could really duplicate it even if they wanted to.
A strong corporate culture with its own unique personality, on top of the profit-sharing partnership we’ve created, gives us a pretty sharp competitive edge.
Sam made it his own personal mission to ensure that constant change is a vital part of the Wal-Mart culture itself. he forced change—sometimes for change’s sake alone—at every turn in our company’s development. Sam believes one of the greatest strengths of Wal-Mart’s ingrained culture is its ability to drop everything and turn on a dime.
I’m going to say it again anyway: the secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience.