Made in America Sam Walton

Book Summary: Sam Walton- Made in America Sam Walton: Made In America, My Story, by Sam Walton (with John Huey), Bentam Books, ‘92 Sam Walton is the founder and Chairman of Wal-mart and the god of retailing in general and discount retailing in particular. His book has a lot for those interested in learning about retailing, entrepreneurship, management and American spirit. The style and learning from the book are exemplary. The style is so gripping and story like that it is impossible to leave it in between. There is no better example of simple, clear, anecdotal, as-it-happened, down to earth, interesting, honest, to-the-point, structured, full of humour writing than ‘Made in America’. He has referred to a number of people and included extensive quotes from most of them right there on the topic of discussion. This provides a higher level of insight and faith in his writing. The reader is almost made to relive Sam’s 4 decades as he built Wal-mart. The learnings from the book are immense. Libraries on retailing, entrepreneurship, management and American spirit may not be able to provide information, knowledge and wisdom the way Sam has done in this book. Creating a business driven by passion rather than wealth creation, management by visiting associates including drivers, discussing details and making notes are just some of the highlights. Customer focus is one of the themes so prominently evident in the way Wal-mart was built brick-by-brick. There are numerous examples of how a truly customer focused organization was created. ‘Low prices always’ and ‘customer satisfaction guaranteed’ are the credos on which Wal-mart was created and these became the pillars of Wal-mart. Saving the money for the customers by spending less in everything created a cost leadership unlike any other. He is not embarrassed to share how he and his team cut costs even at the expense of their comforts and conveniences. His philosophy of ‘Buy them cheap, stack them high and watch them fly’ is a lesson for all retailers. He emphasizes that store folks need to work like entrepreneurial merchants and need to be given space to do that. He lives the ‘retail is in detail’ principle. Some of the most amazing and effective initiatives taken up by him are also discussed in the book in detail, namely: 1. Profit sharing and Stock options plans 2. Knowledge management and knowledge sharing among the team member spread across geographies and functions 3. Autonomy as the stores level for store managers and the departmental managers’. 4. Communication systems including Friday merchandising meetings and Saturday Stores meetings

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Technology for warehousing and logistics Dis-intermediation of non-value adding intermediaries in purchase Shrinkage management Motivation through slogans- ‘Shrinkage Control, what do you do about shrinkage- crush it crush it’, Give me a W, Give me an A, Give me L,……who is number 1?... Customer’ 9. Going against the industry practice and bringing in-house the logistics to reduce cost and enhance speed 10. Making store the de-facto business unit 11. ‘Eat your own meal’ – program where the merchandisers experience out the store manager role 12. People Greeters at stores 13. Calling employees as ‘associates’ 14. Doing good by doing business in customer focused way and saving for the customers rather than through charity 15. Time management and being brand ambassador whether playing, Tennis, Hunting, in stores or flying 16. Creating Shareholder value 17. SCM excellence through hub and spoke model with warehouse within 300 km His philosophy of creating discount stores in smaller towns and completely covering that area (expanding the circle) was a cornerstone of his early success. The book also brings out the ‘True value’ of hard work and ‘hand-on’ work. Sam demonstrates his focus on finding talent and getting them on board at the earliest. Sam Walton has also acknowledged some of the mistakes he made in the early days of his career including contracting, driving his people too hard, not getting fair number of women employees on board. At a personal level, Sam shares the secrets to building a business where the family owned majority of stake. He shares how he worked with his brothers and wife which are lessons for family owned businesses. He also shares wisdom on how to be wealthy responsibly ‘without the wealth getting to one’s head’ and ‘valuing a dollar’. His early efforts with communities where he undertook several community initiatives which helped Wal-mart find its bearings and early days of doing paper routes and other jobs too proved to be important in building his personality. There are also lessons in dealing with the stock market analysts, median and the critiques. The author has educated us on retailing, entrepreneurship, management and true meaning of American spirit through his book, ‘made in america’ which he worked to complete even as he was dying- that is the spirit of Sam Walton. It wont be wrong to say in a significant way that ‘America was made by Sam Walton’. Excerpts from the Book Learn by Doing

He learned a lot about hard work and sales from doing it in his early years. At ages 7 or 8 he sold magazine subscriptions. Later, he raised and sold rabbits and pigeons. (Page10) From seventh grade through high school, (11) he ran paper routes. In college, he added more routes and hired helpers, making some serious money (12). He needed it, since he was paying his own way. (13) He did whatever it took to make ends meet, waiting tables in exchange for meals (14) and life guarding on the side (15). People skills Besides learning hard work, he learned people skills. Here’s a trick he learned that he’d use the rest of his life: I learned early on that one of the secrets to campus leadership was the simplest thing of all: speak to people coming down the sidewalk before they speak to you. (16) Learn from Your Competition "…I learned a lesson which has stuck with me all through the years: you can learn from everybody. I didn’t just learn from reading every retail publication I could get my hands on, I probably learned the most from studying what my copetitor was doing across the street." (25) Learn from Your Workers "Great ideas come from everywhere if you just listen and look for them. You never know who’s going to have a great idea." (30) He especially loved to talk to the truck drivers. "For a long, 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." Innovate, Swim Upstream; Constantly Experiment With New Ideas "He was notorious for looking at what everybody else does, taking the best of it, and then making it better." (Sol Price, founder of Fed-Mart and Price Club) (37) According to Walton, "…after a lifetime of swimming upstream, I am convinced that one of the real secrets to Walmart’s phenomenal success has been that very tendency." (38) Learn from Your Mistakes But when he saw he was wrong, he admitted his mistake and went on to try something else. And he wanted his associates to be the same way. He’d get them together on Saturday mornings to share their success and admit their failures. That culture of candor produced a great environment to capture ideas. It helped that he had "very little capacity for embarrassment." (40) Capture Your Ideas Wherever he found himself, he’d visit stores, look around, and ask questions. At first, he wrote down all his ideas on his yellow pad. Later, he used a little tape recorder. (45)

Don’t Worry Who Gets the Credit According to Walton, "…most everything I’ve done I’ve copied from somebody else…." To get the best ideas, you’ve got to be humble enough to give credit where credit’s due. Claude Harris says, "He was always open to suggestions, and that’s one reason he’s been such a success. He’s still that way." (51)