PofE 054: Sam Walton - Enhanced Walmart's Customer Service through Strong Values and a Superior Distribution Model
"Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality." -Peter Drucker
Background and Challenges:
- Sam Walton was born on March 29, 1918 in Kingfisher, Oklahoma to Thomas and Nancy Lee Walton.
- His parents were farmers until around 1923. Due to the Great Depression, his father gave up farming to go into the farm mortgage business.
- Growing up on a farm during the Great Depression taught Sam many lessons about hard work, discipline, honesty and fortitude. He eventually became the youngest Eagle Scout in the history of Oklahoma.
- His family eventually relocated to Orlando, Florida where they moved multiple times during his grade school career.
- During High School, Sam participated in ROTC and entered college as a cadet.
- From 1936 to 1940, Sam Walton attended the University of Missouri where he majored in economics.
- After college, Sam Walton worked as a trainee for JC Penney but soon after starting this position he resigned and joined the military where he worked as a security guard during World War II. He was later promoted to Captain before he was honorably discharged.
- By 1960, Sam Walton, working with his brother James, was operating a chain of Ben Franklin franchise stores in Rogers, Arkansas.
- He eventually started his own discount chain to service the population of small town America in 1962. This took place after the leadership team of the Ben Franklin franchise rejected his idea for building discount stores outside of the major city limits. With the development of his first store, Walmart was born.
Images of Sam Walton:
What can we learn?
- The value of courage and hard work - Sam Walton learned the value of courage and hard work from his father who modeled these attributes every day while raising his family on the farm. He witnessed his father's courage as he managed to support them through the Great Depression. He also learned to live out this value while earning the honor of being the youngest Eagle Scout in Oklahoma's history.
- The value of education - He learned the value of education throughout his high school and college experience. This reminds me of the maxim, "The more your learn, the more you earn."
- The value of character development - He demonstrated the value of character when he resigned from his position at JC Penney while participating in a management trainee program. He left this career building experience to prepare to be drafted into the military during World War II. This value would serve Sam Walton throughout his life as he worked diligently to provide everyday low prices to millions of Americans.
- The value of entrepreneurial-ship - Starting and growing a strategic business unit, a franchise, or an independently owned shop is hard work. I think of Marshall Goldsmith's book, "What Got You Here Won't Get You There," as the focus you need to have to develop your business. Sam Walton placed himself on a never ending journey to learn and grow. He focused on developing the skills and capabilities required to take Walmart to the next level, and this is the type of effort required from everyone who wants to grow their business.
- The value of incremental improvements - Sam Walton laid the foundation of Walmart's customer service from the values and lessons he learned during the Great Depression. He developed a passion for serving those less fortunate and dreamed of seeing Walmart Supercenters in developing small towns. He also became an incredible innovator by continuously automating Walmart's inventory distribution processes.
- The value of giving back - During his lifetime, Sam Walton learned the value of sharing and helping those less fortunate than himself. Walmart's Foundation was established to carry out Sam Walton's legacy of giving back by supporting:
Principles of Execution Key Concepts:
- Walmart Foundation
- Walmart Customer Service
- Walmart Supercenter
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