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Mailbag — Wal-Mart Redux

 

Jim Prevor’s Perishable Pundit, August 24, 2006

The Pundit Mailbag received a tremendous amount of reaction to our store tour of two Wal-Mart Supercenters the other day — feedback from other retailers, suppliers and consultants. And we’ll deal with the mailbag as we can.

But I thought it was worth mentioning the reaction I received from Wal-Mart’s own personnel and how it explains so much about why Wal-Mart remains such a formidable competitor.

It is a myth in business that the important thing is to only launch perfect products. Anyone who ever used Version 1.0 of any Microsoft product knows that isn’t the way they made it to the top.

I’ve had the privilege of attending Wal-Mart’s famous Saturday meeting at headquarters. Half revival, half deadly earnest business, one of the things that impressed me most was the spirit of continuous improvement that permeated the organization. I wrote a column after I walked out of that Saturday meeting and this is what I said on that point:

The emphasis is on error-correction.

So many companies research to death and never act. Wal-Mart puts out imperfect stores — then treats every error as a mandate for change. Every time someone pointed out a problem, the handheld blackberries started to whirl. Whether it’s the CEO pointing out a problem or the departmental manager complaining she could have sold more of something if she wasn’t out of stock, every error is treated as a challenge.

You can read the whole column here.

And that spirit has not died in Bentonville.

I made a critique. Because of a long history in the business, close personal contact over the years with high-level Wal-Mart executives and the platforms I have to speak out on, that critique was treated seriously.

First, people wanted to be fully informed. We were fortunate that even though the Perishable Pundit is not even three-weeks-old, we had high-powered readership in places like Wal-Mart on our first day because of the credibility of our magazines and long personal relationships.

But Wal-Mart is a big place and people popped out of the woodwork to sign up for subscriptions. Knowledge is the first key.

Second, nobody I interacted with lost focus. One young Wal-Mart executive, whom I had never communicated with till yesterday but I’m fingering for big things today, put it this way to me:

I really enjoyed your article related to the 2 Grand Opening stores in Florida. It was very well articulated. I appreciate the candor. Please feel free to contact me at anytime. I look forward to your future reads.

Another executive at headquarters expressed himself this way:

I’ve filled out the subscription link and look forward to getting your thoughts in the future…. although I can’t say the article gave me warm and fuzzy feelings. Thanks for keeping us on our toes. Lots of us have something to talk about in B-ville.

This is significant. I’ve been writing things for decades that people would rather not hear, and I can tell you that the temptation to blow up, to be upset, to cancel your subscription, to curse me out — this is the common reaction.

But to keep the focus on the continuous improvement loop, which means that they need candor above all, is very difficult and emblematic of an organization in which the culture is deeply embedded.

The third shoe hasn’t dropped yet. Wal-Mart is a big company and it takes time to absorb and assess things, but I know the company well enough to know there will be follow-up and improvements will be made. And that is how Sam Walton built a big company from a small one.

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