Rating: •• (Mildly Recommended)
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If you can handle some repetition and a few dozen boring pages, then go ahead and pick up a copy of Robert Slater’s new book, The Wal-Mart Decade. Most of us think we know a lot about Sam Walton and the company he founded. Few of us could name members of the current management team. Yet, Sam’s successors have created an amazing company, and one that’s very different from the way it was when Walton died. Slater introduces current and recent managers, and presents a somewhat interesting story of how they’ve built the business. Here’s an excerpt from the beginning of Chapter 11, “Mr. Logistics Takes Over,” (pp. 163-7):
Throughout the year 2002, Lee Scott was running the largest company in the world in terms of revenue. He was the head of the largest private employer in the world. The company h$ presided over sold more food than anyone else. More than a hundred million people passed each week through the stores that he oversaw.
By virtue of Wal-Mart's arrival at the top of the mountain, Lee Scott certainly must rank as one of the most important, powerful, and influential CEOs of the day. But—and here's the paradox—he's certainly not one of the most visible. By his own account, he can walk into most Wal-Marts around the world and go unrecognized. Sam Walton couldn't do that.
Lee Scott seems comfortable keeping a low profile, partly one imagines, because he wants to make sure that Sam Walton remains, even in death, the most important personality in the Wal-Mart organization. There seems to be an unwritten agreement among the new leadership team, inspired no doubt by Rob Walton, that Walton's image burn more brightly than that of any of his successors.
Sam Walton and Lee Scott both seemed to be the right leaders at the right time. That has a good deal to do with their contrasting personalities.
Wal-Mart needed a cheerleader, a business-savvy, hands-on kind of fellow at its start and into the seventies and eighties.
It had less need for a cheerleader in the nineties, more for leaders like David Glass and Lee Scott, both of whom had skills and knowledge in logistics and transportation.
Most of all, Wal-Mart in the past decade had no great need to project another icon onto the business scene; it needed a Lee Scott to preside over a leadership team that could wrestle with the present-day complexities brought by the new Wal-Mart empire.
Lee Scott carries his near-anonymity with aplomb, eager to give the impression that he's not entirely comfortable wearing the crown that Sam Walton wore for so many years, eager to convey that it will take him time to get used to being the leader of the largest company in the world.
Lee Scott took over as CEO from David Glass in January 2000. When we met for the first time in June 2002 for a brief discussion, he had been in the job only 18 months. He pointed out at our first formal interview two months later that we were sitting in the office once occupied by Sam Walton, and he confessed that he found himself occupying it overwhelming: The office evoked for him the times when Walton would summon him to chew him out about something. It was not only sitting in the founder's chair that he found daunting; it was possessing so much power and influence over the company.
Before becoming CEO, when Scott took part in a Wal-Mart meeting he would trade ideas breezily with colleagues; some were adopted; some were not. As the CEO, he learned to his surprise that colleagues were taking his thoughts much more seriously: "When I got promoted to CEO, I did not become significantly brighter. But I learned quickly that offering what was previously a nondangerous opinion can be perceived, if you're not careful, as a command. And you are no smarter. You have no new insight. But you have more power. So I've been very careful—and I now say it quite a bit—what I'm about to say is not a directive, it's only for discussion."
Lee Scott's low profile and his early unease at having so much power comes, one assumes, from a long-standing conviction that he would never rise to the CEO post. He knew all too well that the person chosen to succeed David Glass, whenever he retired, was likely to be one of the renaissance men, men who possessed skills that made them knowledgeable not only in general merchandising and food but also in operations and logistics and communications. Scott was a logistics man, perhaps the best Wal-Mart ever had, but was that enough to qualify for CEO?
David Glass recruited Lee Scott to Wal-Mart.
Born in 1949 in Joplin, Missouri, Scott had grown up in the small Kansas town of Baxter Springs, where his father ran a gas station and his mother taught music at the elementary school. By age 21, he was married and a father; he worked for a tire-mold manufacturer to pay his way through Pittsburgh State University in Kansas where he majored in business administration, graduating in 1971.
When Yellow Freight System, a large Kansas-based trucking company, refused his bid to enter its management training program, young Scott asked a family friend to intercede. As a result, in 1977, at age twenty-eight, he joined the company as a terminal manager in Springdale, Arkansas.
His neighbor, Glenn Habern, a Wal-Mart manager, told David Glass, then an executive vice president at Wal-Mart, that Scott might be worth hiring. As it turned out. Yellow Freight felt that Wal-Mart owed it $7,000 in additional storage costs for failing to accept a delivery on time. Determined to collect the money, Scott drove to Bentonville and confronted Glass.
Insisting that Wal-Mart owed nothing. Glass was nevertheless struck by Scott's abilities and offered him a job with Wal-Mart. Scott looked at Glass as it if to say, "You've got to be kidding me." He then told Glass: "I may not be the smartest person who ever came into this office, but I will not leave the fastest-growing trucking company in America and go to work for a guy who can't pay a $7,000 bill."
WHAT'S RIGHT FOR THE COMPANY
Two years later, Lee Scott had moved to Springfield, Missouri, and was working for Queen City Warehouse, another company in the freight and transportation business. Glass contacted Scott, asking him to become director of the Wal-Mart truck fleet. This time, Scott was amenable. But upon arriving at the new job, he listened with great surprise as David Glass declared that Scott would have to be only assistant director for some time. Swallowing his ego, Scott told Glass, "If it's right for the company, let's do that."
Burying one's ego helped one go far at Wal-Mart. Lee Scott was off to a good start. He did not, however, have a particularly warm opening meeting with Sam Walton. On his first day at work, Scott was summoned to Walton's office for an interview. Scott got the impression that if the interview did not go well, he might not have a job.
Scott sat down in Walton's office while the chairman propped himself against a table.
"How old are you?"
Scott was not expecting that kind of question right off the bat.
"Do you think you can do this job?"
"Yes, sir," said Scott.
Walton gazed into Scott's eyes for a long moment and said, "I reckon you can," signaling that the meeting was over.
The meeting was short and abrupt, but at least Scott could be grateful that his new job was intact—for the time being.
Taking up the job of assistant director of the trucking fleet, Scott quickly got on the wrong side of Wal-Mart's truck drivers when he threatened to fire anyone violating company rules. He thought that displaying such personal initiative would win him points with the top brass.
So when a driver failed to make a delivery on time, Scott fired him. The driver complained directly to Sam Walton about the upstart who was wielding too much power. Walton rehired the man on the spot. (Ultimately, Scott's judgment about the errant truck driver was on the mark: He was fired and rehired two more times; finally the fourth time, he was fired, again, and left for good.)
Meanwhile, drivers complained to Sam Walton that Scott was constantly issuing ultimatums and threats to get them to obey the rules. Walton summoned Scott to his office, suggesting that be had been overly harsh to the drivers, considering that only 5 percent of them of them had committed infractions.
Walton had enough good sense and charm to get Scott and the truck drivers to make peace. He did not wish to fire Scott, nor did he want Scott to fire a truck driver too quickly. The solution, Walton told Scott, was to listen carefully to the drivers' complaints before taking impulsive action against them. Walton ordered him to shake hands with every driver and thank them for having the courage to use the Wal-Mart open-door policy.
At times, Walton and Scott would have strong disagreements about this issue or that, but Scott came to prize the relationship he developed with the founder. Scott learned to assess Walton's moods by the name he used for him: He was "Scott" when he had a beef with him, but "Levius" (a Southern name for Lee) when things were all right.
If you’re looking for a critical analysis of the Wal-Mart business model, or a deep understanding of the organization’s strengths and weaknesses, you won’t find that on the pages of The Wal-Mart Decade. What you will find is a pleasant story about unassuming and talented executives who built a gigantic and successful business.
Steve Hopkins, September 23, 2003
ã 2003 Hopkins and Company, LLC
The recommendation rating for this book appeared in the October 2003 issue of Executive Times
URL for this review: http://www.hopkinsandcompany.com/Books/The Wal-Mart Decade.htm
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