Customer Reviews

The Wal-Mart Way: The Inside Story of the Success of the World's Largest Company

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There's a lot to be learned from the story of Wal-Mart. A lot of it is in this book by a former Wal-Mart COO, a man who actually knew Sam Walton. And that's where the problems start.

Sam Walton was one of the great entrepreneurs of all time. He created a great company with a culture that has survived his death in 1992. But he was not a saint and he wasn't always right, though this book treats Walton as if both of those things were true.

For example, the Soderquist tells us about a truck driver who was fired for poor performance. The performance had been poor for a while and continued despite counseling. We're told that the driver's bosses did everything right, doing the right things, documenting the sub-standard performance, giving the man opportunities to correct behavior, etc.

But once the fellow is fired, he goes in to see Sam Walton. Walton decides that the fellow should be kept on after all. He over-rules both Soderquist and the driver's immediate bosses. We're told that this is because Sam Walton wanted to send the message that "the open door policy works." We're told it was a good thing.

There's no mention of other messages that might have been sent, such as "it doesn't matter if you don't perform, just go appeal any discipline to the big boss" or "It doesn't matter if you do everything right when you fire an underperformer because that person can appeal to the big boss and you'll be back on the job in no time."

It seems, in this book, that if Sam Walton did it, it must be right by definition. Evidently the company didn't make any mistakes either. There is plenty of mention, for example, of everyday low prices, but no mention I could find of everyday low wages and benefits. Obviously this sets Wal-Mart apart from other, lesser creatures of business.

Other retailers are clearly lesser creatures. They "just don't get it" and "use bait and switch tactics."

Other companies are clearly lesser creatures. Read this book alone and you'd think that Wal-Mart single handedly created supply chain thinking, donation-matching programs, and every IT innovation from EDI to RFID.

Even the vaunted "associates," though often explicitly praised as a group, are clearly lesser creatures. Soderquist says that he wants associates to communicate "with" management, but when management communicates it is "to" associates.

If things like that bother you, then you may not want to buy this book. You'll just get upset and miss the very important lessons that are in the book. It starts with the importance of vision.

The book points out that it's important to have a real vision and strong values to build a big and lasting company. It also shows that one of the particular strengths of Sam Walton's vision was that it didn't involve building a big company.

Instead, Walton saw his company as creating an excellent shopping experience for customers in smaller cities and towns. That vision led Wal-Mart to see the customer as the boss. It led the company to view itself as the buyer for the customer, rather than as selling to the customer and all of that finds its way into culture.

The most important lessons this book has to teach are about vision and culture. You'll learn about the importance of culture to a successful company, but that's old news. If you don't know by now that culture is a powerful driver of behavior, then you haven't been paying attention.

But the book also outlines the mechanisms that Wal-Mart uses to re-enforce its culture and values. You'll learn about how this is done in regular meetings and through rituals and symbolic actions.

You'll see many examples of Wal-Mart's cultural value of constantly seeking improvement. You'll see how Wal-Mart lives out the value of "everyday low prices."

That value is a two-edged sword for Wal-Mart. On the one hand it's a source of both profitability and improvement. On the other, it's the source of the holier-than-everybody tone of this book and the salary and benefits decisions that have made such bad press for the company.

The best thing about the book is that it shows how one very, very big and successful company has managed to maintain an entrepreneurial energy true to the spirit of its founder. The worst thing about this book is that the author is too proud of that to discuss Wal-Mart's flaws, failures or shortcomings and, it seems unwilling to give outsiders much credit for getting anything right.

Author Don Soderquist, Wal-Mart's retired Vice Chairman and COO, writes passionately about the company its founder, the late Sam Walton and its corporate culture. Once dubbed 'keeper of the culture,' he is not here to write a balanced, objective corporate biography. Instead, his admiration and respect for Walton and Wal-Mart shine from every line. He examines the company's workings from its humble beginnings to its rapid, phenomenal expansion. Soderquist describes Wal-Mart's commitment to its customers and employees, and describes its cost-cutting zeal. He details its use of new technology to revolutionize internal systems. These insights from the inside are very interesting, but - perhaps because the author was in the highest ranks of the company's leadership - the tone is so pro-Wal-Mart that it has the taste of public relations. However, if you seek immersion in this distinctive corporate culture and want to emulate the principles that worked for it, we stand beside the big glass doors and welcome you to Wal-Mart. Do you need a shopping cart?

This book is very good and can teach powerful lessons. But you should bare in mind that you can buy this book at wall-mart for nearly 15 dollars less...Just to let you know.

Whether you think of Wal-Mart as an abomination or your second home, you will find excellent principles with illustrating stories about how to build and run a successful business.

Wal-Mart is simultaneously admired, feared, loved and hated depending on from which perspective one looks at this giant retailer. In this book, the author's view is that of an insider, one who is passionately involved with the company's growth for over two decades and who has lived by the core principles and beliefs of the company and finally reaching the position of COO and vice-chairman.

This book is not a business story of Wal-Mart or a biographical outline of its founder. However, background knowledge of the world's biggest company will help in understanding the basic principles that helped it reach the current position rapidly with a clear vision and determination.

Frankly, my admiration for Wal-Mart has substantially increased after reading this book. This is not because I am in complete agreement with what can perhaps be termed as one-sided view for the author. The difference lies in the listing of the 12 core principles on which the company has been built and continues to grow rapidly even after reaching the magic figure of World # 1.

In terms of its global sourcing strategy, Wal-Mart procures aggressively from low cost locations especially China. This has resulted in reduced prices and abundant supply of merchandise in America. This practice is often accused as taking away of jobs from America and instead creating sweat shops in China. The book challenges these allegations and explains the global supply chain strategies that need to be emulated by any multinational.

What I found more interesting about the book is that about certain assumptions that we may make about business strategy. For example, in simple economic terms, price elasticity of demand means lower prices would ensure higher sales for most merchandise. However, Wal-Mart is driven by customer satisfaction and the commitment to putting an extra dollar into the average American consumer's pocket as the drivers and enablers that increase sales. Price reduction is the effect and not the bait.

The incident where a lady customer is given a free frying pan by the manager of a Wal-Mart store, just based on her declaration that she had lost the one she bought in the parking lot while taking it home is a good example of how much the employees are driven primarily by customer satisfaction and not just by sales targets.

Learning from competitors is another great trait that has been well explained.

Wal-Mart not only excels in customer service within its stores. Its truck drivers for example have helped many people who needed help on the roads especially women struck with vehicle breakdowns during late evening hours. What more can customers expect. No wonder they keep coming back again and again to what is now and will remain the planet's biggest company as long as it continues to pursue its 12 core principles in action and in spirit.

Outstanding book! Very challenging and encouraging to read. Describes the "man" who had a clear purpose and vision, was able to focus on it, and communicate and motivate his team around him in achieving success.

For me, this book wasn't primarily about Wal-Mart. It was about a man who took his principles to work with him and became incredibly significant. In a world severly lacking in principle driven living, it shines as a beacon. Here's an example:

The closest competitor prices a product at $19.95. Wal-Mart prices it at $14.86. Why doesn't Wal-Mart raise their price to $17.95, beating the competition but earning $3 more on every unit? Answer: Because Wal-Mart believes it holds a fair profit margin at $14.86 and wants the customer to have the lowest possible price. (Page 94) That's principle driven marketing.

I learned about the ten foot rule: When a Wal-Mart associate comes within ten feet of a customer, he or she is to look up, look the customer in the eye, and speak to the customer. If the customer asks where something is, the associate does not tell the customer, but takes the customer to the product. (page 91) That's principle driven customer service.

The development of corporate culture as a combination of shared vision, shared values, shared purposes, and shared expectations was helpful to me (Page 25). It was interesting to see how the corporate culture was promoted in Wal-Mart.

I believe I can apply these principles in my life, so this book really speaks to me. Forget about your pre-judgments of Wal-Mart, good or bad, and harvest a gold mine of life principles from these pages. I would use this as required reading in a college leadership class.

George A. Goolde

Reading this book you get to know a humble, God-fearing man who pursues excellence in everything he does. Don Soderquist would never say so, but he is a great American and a role model for any young businessman.

And Wal*Mart is proof that the strong American work ethic is really what makes our corporations so successful. Not the 'exploitation' schtick that the demented newscasters constantly try to peddle.

Soderquist (current Wal-Mart CEO) summarizes a number of Wal-Mart basic "rules" and some of the driving forces behind its success. His perspective derives credibility from having worked with Sam Walton (founder) and several other Wal-Mart CEOs.

Key among these is to dream, set high expectations (never stop growing, quality, integrity), be a good neighbor (eg. don't take advantage of local disasters - instead be capable of quickly getting back into business and focusing on items typically needed after a disaster; donate to the community), and continuously improvement. This, along with a focus on low prices, led Wal-Mart from a few stores in Arkansas to thousands around the globe, from basic stores to Superstores, Sam's Clubs, and then Neighborhood Markets, and from accepting suppliers' offerings to becoming a highly respected procurer and originator of private labels.

Much of the book relates how Wal-Mart respects its employees ("associates") and provides good salaries and benefits. I have a hard time accepting that, given its reputation for low pay and difficult to obtain benefits (eg. approximately $35/week for family healthcare). On the other hand, how does one argue with the Soderquist's report that approximately 15,000 applied for 400 jobs in a newly opened N.Y. store?

Twenty-thirty years ago it was common to hire a data-processing staff and then turn them loose. Soderquist contends that Wal-Mart did not do that. Early uses focused on areas believed to offer the greatest impact, and included computerized inventory, forecasting demand by item, Electronic Data Interchange with suppliers (speed results, reduce errors), use of bar codes, satellites for faster credit-card approval, next-day sales reports, and providing month-end P&L data three working-days after month-end.

Wal-Mart is rightly lauded for its supply-chain expertise. The original insight on potential improvement occured when Sam Walton went canoeing with a P&G executive - both said that the other was "the hardest company they had ever worked with." They didn't share information, or trust each other. Wal-Mart then went to placing orders on Monday, having them filled Tuesday, shipping on Wednesday, receiving on Thursday, and sending wire-transfer payment on Friday - with reconciliation at quarter-end. Today Wal-Mart allows suppliers access to sales data for their products in almost real-time, and has smoothed out truck flows to avoid having multiple trucks show up at the tame time and a resulting inability to unload them all.

Originally Wal-Mart used outside truck-lines - however, the Wal-Mart loads were small, and truckers would warehouse these until enough volume elsewhere (or with Wal-Mart) had built up. Clearly this was unacceptable, and the company created its own fleet. Today 80% of store supplies come out of Wal-Mart warehouses in Wal-Mart trailers. (Swift Transportation and others now have some of the business, and no longer delay deliveries.) In the early years, deliveries occured once/week, then twice, then every-other-day, then every day, and now several times/day.

Cross-docking at the Distribution Centers (DCs) minimized handling in many cases, and empty back-hauls were minimized by having its fleet bring in 50% of new supplies into the DCs. Volume going out of DCs has increased from 40,000 cases/day to as much as 750,000/day - with considerable automation and shortening of conveyor belt lines.

Interesting, valuable material - however, wish there was more material on its special strenghts - procurement and distribution.

You gotta admire Wal-Marts success and they do bring us low prices. In this book is outlined the secrets I guess youd say and most are pretty darn good from a big company perspective. They are certainly the leading edge when it comes to supply chain exectution and redirection. But dont know about the great pay and benefits, thats not what I hear but then if there is no where else to work in a small town then they are the best. I have read some nasty stuff about them their suppliers and when I was wroking at Pepsi and Frito Lay Wal-Mart was less of a partner and more of a dictator when it came to their suppliers. So it is a good read about the biggest company in the world and they are to be commended as the Author walks you through how they have kept their focus. Too much of an advertorial to me though singing their praises for everything under the sun.