100 Years of Swimming Upstream
Sam Walton believed that running a successful business boiled down to *10 simple rules, one of the more important is to swim upstream.
Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction.
Jeff Bezos left a secure Wall Street job to start Amazon in his garage selling books over the Internet, really? While there are many similar stories about Gates / Microsoft, Jobs / Apple, and Zuckerberg / Facebook.
Sam Walton started Walmart in 1962, at the age of 44; so the company is 56 years old, while Target is 116, and Kmart is 119. Amazon is only 24 years old.
Walton died in 1992 at the age of 74, and coincidentally Amazon began in 1994. Somehow I have this image of Sam Walton swimming upstream on the Amazon River, avoiding the piranhas.
In a recent trip to Bentonville to check out latest exhibits at world class Crystal Bridges Art Museum, I made a special effort to take my daughter by the Walmart Museum. Special significance since we live in city with the Walmart Store #2 plaque, Harrison, Arkansas. Store was opened August 1st, 1964.
My daughter has a birth defect, oral-facial-digital syndrome, so she understands swimming upstream in life, dealing with many issues including a kidney transplant and knee replacement. She made a couple of key observations – one was Sam’s use of a voice recorder when he visited stores to collect info for later analyses, much like her doctors. Items that were in Sam’s office. Something I had missed on how thorough Sam was in his store visits.
Also she wondered why Harrison wasn’t more prominently mentioned since it was store #2?
There are many takeaways from store #2 - Harrison is outside the NW Arkansas region - not just down the road from headquarters, creating absentee ownership challenges and Harrison has a 75 mile radius from any sizable cities -- pre-Branson reinvention as a destination city - shoppers traveling to Springfield, Fayetteville, Conway / Little Rock or Jonesboro. I experienced similar challenges with a technology company that I founded. National and international sales were triggered by successfully installing a system in remote locations, ironically first was in Rogers, Arkansas.
The museum, and Walmart historians have missed an opportunity to illustrate the choice of Harrison as store #2 as Walton’s early willingness to swim upstream.
The recruiting of David Glass is entertaining, but doesn’t adequately represent the value of the Harrison model that has been successfully replicated hundreds of times.
Following has been the most frequent reference in books, publication, and again at the museum. Ignoring the real economic importance of the Harrison model.
Sam Walton had been actively trying to recruit David Glass, of Cranks Drug Company, to take a job at the main office.
Glass was invited by Walton to attend the opening day in Harrison to share his vision.
Glass remembers the day like this: “It was the worst retail store I had ever seen. Sam had brought a couple of trucks of watermelon in and stacked them on the sidewalk. He had a donkey ride out in the parking lot. It was 115 degrees, and the watermelons began to pop and the donkey began to do what donkeys do, and it all mixed together and ran all over the parking lot. And when you went inside the store, the mess just continued, having been tracked in all over the floor.”
Glass was not eager to be a part of this type of retail store, but 26 years later, Sam Walton named him chief executive officer.
When the Walmart Super Center opened at the current location on Jan. 25, 1995, the store was dedicated to David Glass.
Locally the first employees and management that were hired have quoted Sam Walton’s, ‘If it hadn’t been for the success of the Harrison store, there wouldn’t be a Walmart chain like there is today.’”
The Harrison profile was similar to many other small towns. Community was virtually self-sufficient best visualized by a moat and castle. Very hard for outsiders to be successful. A big challenge even for an entrepreneur like Sam. Walmart’s first location in Harrison was in a space formerly occupied by a failed business accused of fraudulent business transactions. Most locals thought Walmart would be just another failed discount store, However, technology started a new paradigm. Walmart quickly proved they could succeed with good, well respected, employees, superior customer service, and lower prices by using technology to manage assets.
First employees were paid little more than minimum wage, but were able to join a profit sharing program, which led to local millionaires. “Mr. Walton worked closely with the staff and personally knew each one by name,” Bill Lovell, Harrison manager, said. “There were fewer than 25 employees and he would seek the advice and suggestions of his staff. (Listen to everyone in your company).
From a customer – “Walmart’s return policy is truly amazing, and one of the great things about shopping at the store”.
Examples of returns displayed on office wall at museum
The wall thermometer, for example, “never had the correct time“.
The thermos was manufactured 8 years before the first Walmart ever opened! Regardless, it was accepted as a return simply because “it leaks“!!
Technology provided a just-in-time inventory management control system, and Walmart was an early adopter of bar codes that allowed product demands to be monitored and sold at much lower prices than the local alternatives.
People were voting for the change to status quo with their pocketbooks. It was a much more significant local vote then any of those taken at the ballot box. Walmart along with the technological advances that allowed overnight delivery of products via UPS and FedEx were the facilitators that created the environment for those major changes. In order for the community to survive there had to be a new order of business.
Some may reflect on Walmart as a Trojan Horse, but realistically it’s change driven by the economy and technology.
Today information flows to anywhere in the world in fractions of seconds. Resources are now independent of location. High-tech has no bounds. You have to think globally, but still treat customers as if they live next door their livelihood depends on people in other locations not buying locally.
We are in a new paradigm! What a paradox! Can small towns realize the global opportunities that are only clicks away on their computers?
Cities can’t circle the wagons. They need to explore the benefits from Internet of things services, and take advantage of smart cities’ technology ---
Transportation, fleet management < smart cities budget – including police, fire, and transportation
Cities and campuses
Energy companies, utilities < smart cities
Agriculture < smart cities food supply
Retail < smart cities
Real Estate < smart cities
The conundrum of shrinking rural population, and growing urban populations at a time when the key is having access to high speed broadband seems counter-intuitive. Many rural Communities, unfortunately, are still following old economic development models.
Rural communities will be required to swim upstream to survive.
Herb Lair
Senior Business Development Consultant
Cell (870) 365-5436
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*Sam Walton believed running a successful business boils down to 10 simple rules and they helped Walmart become the global leader it is today.
1. Commit to your business.
Believe in it more than anybody else. If you love your work, you'll be out there every day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion from you – like a fever.
2. Share your profits with all your associates, and treat them as partners.
In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations.
3. Motivate your partners.
Money and ownership alone aren't enough. Set high goals, encourage competition, and then keep score. Don't become too predictable.
4. Communicate everything you possibly can to your partners.
The more they know, the more they'll understand. The more they understand, the more they'll care. Once they care, there's no stopping them.
5. Appreciate everything your associates do for the business.
Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They're absolutely free – and worth a fortune.
6. Celebrate your success.
Don't take yourself so seriously. Loosen up, and everybody around you will loosen up. Have fun. Show enthusiasm – always. All of this is more important, and more fun, than you think, and it really fools competition.
7. Listen to everyone in your company.
And figure out ways to get them talking. 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.
8. Exceed your customers’ expectations.
Give them what they want — and a little more. Make good on all your mistakes, and don't make excuses — apologize. Stand behind everything you do.
9. Control your expenses better than your competition.
This is where you can always find the competitive advantage. 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're too inefficient.
10. Swim upstream.
Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction.