Sam Walton built America’s vast chain of Wal-Mart stores on the philosophies of excellence in the workplace, customer services, and always having the lowest prices. Walton, affectionately known to his staff as ‘Mr. Sam’, was a true entrepreneur. He established Wal-Mart in 1962 at the age of 44. He died in 1992, having seen his company become America’s biggest retailer.
Walton believed that each Wal-Mart store should reflect the values of its customers and support the vision they held for their community. Today, Wal-Mart’s Community Outreach Programmes underwrite college scholarships, raise funds for local children’s hospitals, provide money and manpower for fund raisers, and help educate the public about recycling and saving the environment. Wal-Mart even helps American towns and cities build up their local industries by providing industrial development grants.
What was Sam Walton’s secret to success?
Rule 1: Commit to your business
“Believe in it more than anybody else. I think I overcame every single one of my personal shortcomings by the sheer passion i brought to my work. I don’t know if you’re born with this kind of passion, or if you can learn it. But I do know you need it. If you love your work, you will be out there every day trying to it the best you possibly can, and pretty soon everybody around you will catch the passion from you – like a fever.”
Rule 2: Share your profits with all your associates
“Treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations. Remain a corporation and retain control if you like, but behave as a servant leader in a partnership. Encourage your associates to hold a stake in the company. Offer discounted stock, and grant them stock for their retirement. It’s the single best thing we ever did.”
Rule 3: Motivate your partners
“Money and ownership alone are not enough. Constantly, day by day, think of new and more interesting ways to motivate and challenge your partners. Set high goals, encourage competition, and then keep score. Make bets with outrageous payoffs. If things get stale, cross-pollinate; have managers switch jobs with one another to stay challenged. Keep everybody guessing as to what your next trick is going to be. Don’t become too predictable.”
Rule 4: Communicate everything you possibly can to your partners
“The more they know, the more they will understand. The more they understand, the more they will care. Once they care, there is no stopping them. If you don’t trust your associates to know what is going on, they will know you don’t really consider them partners. Information is power, and the gain you get from empowering your associates more than offsets the risk of information your competitors.”
Rule 5: Appreciate everything your associates do for the business
“A paycheck and a stock option will buy one kind of loyalty. But all of us like to be told how much somebody appreciates what we do for them. We like to hear it often, and especially when we have done something we are really proud of. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They are absolutely free – and worth a fortune.”
Rule 6: Celebrate your successes
“Find some humor in your failures. Don’t take yourself so seriously. Loosen up, and everybody around you will loosen up. Have fun. Show enthusiasm – always. When all else fails, put on a costume and sing a silly song. Then make everybody sing with you. Don’t do a hula on Wall Street. It’s been done. Think up your own stunt. All of this is more important, and more fun, than you think, and it really fools the competition. “Why should we take those cornballs at Wal-Mart seriously?”
Rule 7: Listen to everyone in your company
“Figure out ways to get them talking. The folks on the front lines – the ones who actually talk to the customer – are the only ones who really know what is going on out there. You did better find out what they know. This really is what total quality is all about. To push responsibility down in your organization, and to force good ideas to bubble up within it, you must listen to what your associates are trying to tell you.”
Rule 8: Exceed your customers’ expectations
“If you do, they will come back over and over. Give them what they want – and a little more. Let them know you appreciate them. Make good on all your mistakes, and don’t make excuses – apologies. Stand behind everything you do. The two most important words I ever wrote were on that first Wal-Mart sign, ‘Satisfaction Guaranteed‘. They are still up there, and they have made all the difference.”
Rule 9: Control your expenses better than your competition
“This is where you can always find the competitive advantage. For 25 years running – long before Wal-Mart was known as the nation’s largest retailer – we ranked number one in our industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you are too difficult.”
Rule 10: Swim upstream
“Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there is a good chance you can find your niche by going in exactly the opposite direction. But be prepared for a lot of folks to wave you down and tell you you are headed the wrong way. I guess in all my years, what I heard more often than anything else was: a town of less than 50,000 population cannot support a discount store for very long.”
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