Wal-Mart's Walton stresses team play


March 25, 1991|By Gerald Graham | Gerald Graham,Knight-Ridder

Wal-Mart, far and away the best performing retailer in the nation by all standards, will likely reach annual sales of $96 billion by the year 2000.

Without a doubt Sam Walton has one of the most outstanding performance records of any leader. And all of this grew from Walton's first store, a Ben Franklin, which ended 1945 with sales of $80,000.

Pulitzer Prize-winning reporter Vance Trimble, in his unauthorized biography "Sam Walton," records the major reasons for Walton's success:

* Sincere customer appreciation. The "Sam Pledge," which Walton has recited hundreds of times to associates, reads in part, "From this day forward, every customer that comes within 10 feet of me . . . I'm going to look him in the eye, I'm going to smile . . . I'm going to greet him with 'What can I do for you?' -- so help me Sam!"

Walton wants Wal-Mart customers to feel that it is their store.

* Everyday low prices. Low pricing is an action way to show customer appreciation. Wal-Mart is able to provide low prices because its buyers, according to competitors, are the toughest in the industry.

Further, Walton is a total skinflint when it comes to spending money on offices and overhead. "Early bus station," is the way one manager described the home office.

Wal-Mart also has a very small office staff relative to sales volume. Because of these and other practices, the retailer's overhead to sales ratio is consistently below 2 percent, the best in the industry by far.

* Selection policies. Walton works long and hard to hire management people with talent, motivation and, just as important, values consistent with company philosophies. Because Walton has committed his total dedication to serving the customer, he expects his managers to do likewise. Very long and hard work weeks are the result.

The Wal-Mart culture encourages team play, openness, support, informality and warmth. Cliques, turf battling, jealously and secret dealing are out.

* Employee appreciation. Walton's store visits are legend. He is sincerely interested in what associates -- employees to most companies -- are doing and their suggestions for improvement.

Backing up its employee appreciation with money, Wal-Mart supports a profit-sharing plan that recently allowed, for instance, a 60-year-old employee with 19 years of service to retire with $175,000 after taxes.

While these practices are neither new nor brain-taxing, Sam Walton was a genius in executing them to the ultimate.

Gerald Graham is a professor at Wichita State University and a management consultant.

. Management quiz

Indicate whether managers of your organization exhibit thestraits:

Score 3 for an "always" answer, 2 for "usually," and 1 for "seldom."

1. Strive to satisfy the customer no matter what.

2. Make people feel welcome in your stores and offices.

3. Are brutal in keeping overhead costs low.

4. Demonstrate sincere appreciation of all employees.

5. Have established a generous profit-sharing plan.

6. Regularly work long, hard hours.

7. Are extra tough buyers of products and/or materials.

8. Are easily accessible to employees and customers.

9. Seriously study competitors' practices.

10. Think big.

Total your points. A score of 25 or higher may suggest similarities to Wal-Mart management.

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