Sam Walton: Made in America

✅ The single most important ingredient to Walmart's success was taking care of the customers. The best way to do that was to take good care of the employees. Most other stores failed because the owner was on a yacht or had a huge house. ✅ One of the main ways Sam kept up with the competition was visiting their stores and copying them. It's okay to copy people if what they have is better in the beginning, but you eventually have to come up with something of your own. Sam was very competitive and had to be the best. A simple mistake can force a restart. Sam’s big mistake was not renewing his lease, so the landlord kicked him out and he had to restart in a new town. Study competitors for what they do right. He asked questions about so many things, and he only cared about what they were doing right, not what they were doing wrong. Do things your way. When he went to New York to buy merchandise, he would meet store owners at 6:00 am. Don’t worry about what people say about your stock or if you fail to live up to someone’s hypothetical projection for what you should be doing. It may knock the stock back a little, but you should be in it for the long run. "If you take someone who lacks the experience and the know-how but has the real desire and willingness to work his tail off to get the job done, he'll make up for what he lacks." This proved true 9 times out of 10, which is how Walmart grew so fast. The less you charge, the more you’ll earn. The more you share your profits with your associates, the more profit will accrue to the company. Because the way management treats the associates is exactly how the associates will then treat the customers. Everyone needs exposure to many areas of the company. The best executives are those who have touched all the bases and have the best overall concept of the corporation. Stepping back can reveal what depends on you. Walton tried to retire, got bored, and things weren’t going so great without him either. A weekly problem-solving ritual can hold the culture together. Every Saturday, the 100 executives have a meeting to solve the most important problems. Fun keeps meetings alive. They start with a chant because it makes people more open to new ideas and sharing. If meetings are only comparative numbers and serious lectures, they die. The customer comes ahead of everything else. If distributors won’t serve your market, build your own distribution. Walmart targeting small town America forced them to create their own distribution network and it helped them lower prices. Competition made Walmart tough. Sears ignored Kmart and Walmart which led to their downfall. Use a tape recorder and take notes on competitors. Write down what they’re doing well so you can copy it. To avoid bureaucracy, think small and entrepreneurial. Focus on the customer instead of bloating about huge profits. Think one store at a time. Keep lowering prices, improving service, and making things better for the folks who shop in your stores. Communicate, communicate, communicate. A simple message to everyone, like asking each customer if they need help, helped jump past Sears and Kmart. Keep your ear to the ground. Don’t sit on your computer all day. Visit every store and find out what they are doing. Push responsibility and authority down. Shift responsibility toward the front lines, toward the department manager stocking shelves and talking to the customer. Sharing information enables autonomy. Pushing responsibility down only works because they share so much information with associates. Stay lean, fight bureaucracy. IBM believed there should only be four layers from the chairperson to the lowest person. "Work hard" is assumed. If you don't know that or won't do it, you won't go far enough to need the rules. Building a team is not optional. If you want to build an enterprise, you must create a team and give meaning to “teamwork”. Sam's Ten Rules: COMMIT to your business. Passion can overcome shortcomings, and it spreads to everyone around you. SHARE your profits with associates and treat them as partners. Offer stock and grant shares for retirement. “It's the single best thing we ever did.” MOTIVATE your partners. Money and ownership aren’t enough. Set high goals, encourage competition, keep score, make outrageous bets and payoffs. COMMUNICATE everything you can. The more they know, the more they care. Empowering associates outweighs the risk of informing competitors. APPRECIATE what associates do. Sincere praise is free and worth a fortune. CELEBRATE successes and find humor in failures. Loosen up, have fun, show enthusiasm, and it fools the competition. LISTEN to everyone. Front line people who talk to customers know what’s going on, and you need to hear it. EXCEED customers’ expectations. Make good on mistakes, don’t make excuses, apologize. “Satisfaction Guaranteed.” CONTROL your expenses better than your competition. You can recover from many mistakes if you run efficiently, but you can be brilliant and still go out of business if you’re inefficient. SWIM upstream. Ignore conventional wisdom. If everyone is doing it one way, go the opposite way and find your niche.