thinking small: store within a store

I first began thinking about some of the very real ways that we could improve our teamwork and put more authority in the hands of our people in the stores.

Our most famous technique for doing this is a textbook example of thinking small. We call it Store Within a Store, and it's the simplest idea in the world. Again, in many big retail companies the department head is just an hourly employee going through the motions, somebody who punches a clock, then rips open boxes and stacks whatever's in them onto shelves. But we give our department heads the opportunity to become real merchants at a very early stage of the game. They can have the pride of proprietorship even if they weren't fortunate enough to go to college or be formally trained in business. They only have to want it bad enough, pay close attention, and work very hard at developing merchandising skills. We've had many cases where the experience has fired people up with ambition, and they've goin on to work their way through college and move on up in the company, and I hope we have many more cases like that.

Again, this only works because we decided a long time ago to share so much information about the company with our associates, rather than keep everything secretive. In Store Within a Store we make our department heads the managers of their own businesses, and in some cases these businesses are actually bigger in annual sales than a lot of our first Wal-Mart stores were. We share everything with them: the costs of their goods, the freight costs, the profit margins. We let them see how their store ranks with every other store in the company on a constant, running basis, and we give them incentives to want to win.

 

Sam Walton

Sam Walton, Made in America by Sam Walton & John Huey. Bantam Books. 1992. p. 227

we make a decision

Our Friday merchandising meeting is unique to retailing as far as I can tell. Here we have all these regional managers who have been out in the field all week long - they are the operations guys who direct the running of the stores. Then you have all your merchandising folks back in Bentonville - the people who buy for the stores. In retailing, there has always been a traditional, head-to-head confrontation between operations and merchandising. You know, the operations guys say, 'Why in the world would anybody buy this? It's a dog, and we'll never sell it.' Then the merchandising folks say, 'There's nothing wrong with that item. If you guys were smart enough to display it well and promote it properly, it would blow out the doors.' That's the way it is everywhere, including Wal-Mart. So we sit all these folks down together every Friday at the same table and just have at it.

We get into some of the doggonedest, knock-down drag-outs you have ever seen. But we have a rule. We never leave an item hanging. We will make a decision in that meeting even if it's wrong, and sometimes it is. But when the people come out of that room, you would be hard-pressed to tell which ones oppose it and which ones are for it. And once we've made that decision on Friday, we expect it to be acted on in all the stores on Saturday. What we guard against around here is people saying, 'Let's think about it.' We make a decision. Then we act on it."

David Glass

Sam Walton, Made in America by Sam Walton & John Huey. Bantam Books. 1992. p. 225, 226

drivers see more stores

Our drivers really are extremely loyal to their mission, which is to serve the stores. They report back to Wal-Mart continually on things like merchandise thrown out behind the store that looked like it was good, attitude and morale problems in the stores. For a log, long time, Sam would show up regularly in the drivers' break room at 4 A.M. with a bunch of doughnuts and just sit there for a couple of hours talking to them.

He grilled them. 'What are you seeing at the stores?' 'Have you been to that store lately?' 'How do the people act there?' 'Is it getting better?' It makes sense. The drivers see more stores every week than anybody else in this company. And I think what Sam likes about them is that they're not like a lot of managers. They don't care who you are. They'll tell you what they really think.

Lee Scott

Sam Walton, Made in America by Sam Walton & John Huey. Bantam Books. 1992. p. 210

transportation... a competitive advantage

Distribution and transportation have been so successful at Wal-Mart because senior management views this part of the company as a competitive advantage, not as some afterthought or necessary evil. And they support it with capital investment. A lot of companies don't want to spend any money on distribution unless they have to. Ours spends because we continually demonstrate that it lowers our costs. This is a very important strategic point in understanding Wal-Mart.

Joe Hardin, executive vice president, logistics and personnel

Sam Walton, Made in America by Sam Walton & John Huey. Bantam Books. 1992. p. 206

the open-door policy

If you've ever spent any time around Wal-Mart, you may have noticed that it's not unusual for somebody in Philadelphia, Mississippi, to get in his pickup on the spur of the moment and drive to Bentonville, where you can find him sitting in the lobby waiting patiently to see the chairman. Now, really, how many chairmen of $50 billion companies do you know who are totally, 100 percent accessible to their hourly associates? I know lots of people in big companies who have never even seen their chairman, much less visited with him. - David Glass

That's not to suggest that they always like what I have to say. I don't always solve their problems, and I can't always side with them just because they bring their situation to my attention. But if the associate happens to be right, it's important to overrule their manager, or whoever they're having the problem with because otherwise the open-door policy isn't any good to anybody. The associates would know pretty soon that it was just something we paid lip service to, but didn't really believe. If I'm going to fly around all over the country telling these folks they're my partners, I sure owe it to them to at least hear them out when they're upset about something. 

Sam Walton

Sam Walton, Made in America by Sam Walton & John Huey. Bantam Books. 1992. p. 141, 142