Sam Walton started Wal-Mart, a giant retailer in 1962. Now employs 2.2 million people in 11,000 stores worldwide. Since Sam’s death, the children inherited a bulk of his fortune amounting to $136 billion according to Forbes (2013).
Christy (58), the richest woman in the world, inherited her wealth when husband, John Walton, a Green Beret and medic in Vietnam War, died in an airplane crash in 2005. His side investment in First Solar once boosted Christy’s net worth of $35.4 billion. Jim (65), Sam’s youngest son, is chief executive of family’s Arvest Bank, with branches in Arkansas, Kansas, Oklahoma and Missouri. His net worth is $33.8 billion. Alice (63) started Crystal Bridges Museum of American Art in Bentonville in 2011. Its collection of American art is worth hundreds of millions of dollars. Her net worth is $33.5 billion. Sam’s eldest son, Rob (69), is Wal-Mart chairman is worth $33.3 billion. The heirs are Nos. 6th, 7th, 8th and 9th richest persons in the USA and the world. Sam Walton shares his cardinal principles in business:
- Three cardinal beliefs: providing great customer service; showing respect for the individual, and striving for excellence. The upstart Wal-Mart’s formula was catching on in the small towns and undeserved rural areas: Selling brand-name goods in high volume at low prices lured loyal customers. Responding to the fast, friendly service and the consistently low prices, customers scooped up everything from records to cosmetics, lawn furniture to clothing.
- Sam Walton thought of business as a simple exercise, so he kept his strategies uncomplicated: buy cheaply, sell cheaply, keep your shelves well stocked, treat your customers with warmth and respect, and pay careful attention to what your rivals are doing right. His goals were always to change the lives of others, not to make a huge personal wealth. His management style was based on the notion that the less time spent at the home office, the better for him and the better for the organization. He lived to be in the stores, to listen to employees and managers, to give them the benefit of his wisdom, to fix things on the spot if he could.
- Walton’s was very much a spur-of-the-moment management style. If something came up at the last moment, he had no trouble re-arranging his schedule to tackle the issue. He made decisions on the basis of what felt right on a given day, not on the basis of what he had decided weeks or months earlier.
- Walton also understood that everyday low prices, while the greatest come-on, had to be part of a larger package benefits: The products has to be a sufficiently high quality; there had to be a wide-variety of those products, and they had to be available at all times.
- Sam Walton’s Ten Rules of Business:
- Commit to your business. That meant bringing passion to one’s work.
- Share your profits with all your Associates, and treat them as partners. Walton’s approach was “if you take everybody and make them partners that will work better than having an employer-employee relationship. If you respect them as an individual, if they can always be heard, whether right or wrong, if they share in the good and the bad, in the profitability, and are truly partners, then he believed that’s what people want.
- Motivate your partners. Not only with money and ownership, but employees had to feel that they were competing and by switching people’s jobs to make sure they didn’t get stale.
- Communicate everything you possibly can to your partner (non-executive employees).
- Appreciate everything your Associates do for the business.
- Celebrate your success. Don’t take yourself so seriously.
- Listen to everyone in your company.
- Exceed your customer’s expectations. Show them your appreciation; admit your mistakes; don’t make excuses, just apologize.
- Control your expenses better than your competition.
- Swim upstream. 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.
- Walton was above all else a great merchant, certainly one of the best of his generation; he could select a specific item, promote the hell out of it, and price it at just the right level to generate huge sales. He was also a great operations man: keeping expenses in check, able to understand numbers, setting expectations and getting employees to meet or surpass those expectations.
Walton’s Principles of Leadership
- We rest, have fun, never quit, and always seek to learn.
- The truth of what we say is told by what we do. “If you don’t live it, you don’t believe it.”
- We pay based on performance and promote based on potential, not belief, tenure, gender, race, or friendships.
- Those who produce the profits should share in the profits. Those who produce more should share more.
- We are all prisoners of our hope. It is our hope that sustains us, and it is our vision for what could be that inspires us and those we lead. “Don’t doubt in the dark what you have seen in the light.”