"What you've created here is better than communism, better than socialism could ever be, better eventhan capitalism. I like to call what you've got here 'enlightened consumerism,' where everybody workstogether as a team and the customer is finally king again."----PAUL HARVEY,radio commentator and guest at a Wal-Mart year-end meetingAs much as we love to talk about all the elements that have gone into Wal-Mart'ssuccessmerchandising, distribution, technology, market saturation, real estate strategythe truth is thatnone of that is the real secret to our unbelievable prosperity. What has carried this company so far so fastis the relationship that we, the managers, have been able to enjoy with our associates. By "associates" wemean those employees out in the stores and in the distribution centers and on the trucks who generallyearn an hourly wage for all their hard work. Our relationship with the associates is a partnership in thetruest sense. It's the only reason our company has been able to consistently outperform thecompetitionand even our own expectations.
Now, I would love to tell you that this partnership was all part of my master plan from the beginning, thatas a young man I had some sort of vision of a great retailing company in which all the employees wouldbe awarded a stake in the business. That I saw them having the opportunity to participate in many of thedecisions that would determine the profitability of that business. I would love to tell you that from the verybeginning we always paid our employees better than anyone else paid theirs, and treated them as equals.
I would love to tell you all that, but unfortunately none of it would be true.
In the beginning, I was so chintzy I really didn't pay my employees very well. The managers were fine.
From the time we started branching out into more stores, we always had a partnership with the storemanagers. Those guys I've already told you about, like Willard Walker and Charlie Baum and CharlieCate, all had a piece of their stores' profits from the beginning. But we really didn't do much for the clerksexcept pay them an hourly wage, and I guess that wage was as little as we could get by with at the time.
In fairness to myself, though, that was pretty much the way retail was in those days, especially in theindependent variety store part of the business.
CHARLIE BAUM:
"When I took over the store in Fayetteville, which would have been May of 1955, Sam was paying thegirls fifty cents an hour. After that first paycheck went out, I thought about it and decided, This is for thebirds.' So the next week I raised them to seventy-five cents an hour, and I got a telephone call from Sam.
He said, 'Charlie, we don't give raises of a quarter an hour. We give them a nickel an hour.' But I didn'tcut back. I stayed with the seventy-five cents because those girls were earning it. We were a high-volumestore for those days, making pretty good money."I don't remember beingthat tight, but I guess Charlie's got it about right. We didn't pay much. It wasn'tthat I was intentionally heartless. I wanted everybody to do well for themselves. It's just that in my veryearly days in the business, I was so doggoned competitive, and so determined to do well, that I wasblinded to the most basic truth, really the principle that later became the foundation of Wal-Mart'ssuccess. You see, no matter how you slice it in the retail business, payroll is one of the most importantparts of overhead, and overhead is one of the most crucial things you have to fight to maintain your profitmargin. That was true then, and it's still true today. Back then, though, I was so obsessed with turning in aprofit margin of 6 percent or higher that I ignored some of the basic needs of our people, and I feel badabout it.
The larger truth that I failed to see turned out to be another of those paradoxeslike the discounters'
principle of the less you charge, the more you'll earn. And here it is: the more you share profits with yourassociateswhether it's in salaries or incentives or bonuses or stock discountsthe more profit will accrueto the company. Why Because the way management treats the associates is exactly how the associateswill then treat the customers. And if the associates treat the customers well, the customers will returnagain and again, andthat is where the real profit in this business lies, not in trying to drag strangers intoyour stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal,repeat customers are at the heart of Wal-Mart's spectacular profit margins, and those customers are loyalto us because our associates treat them better than salespeople in other stores do. So, in the wholeWal-Mart scheme of things, the most important contact ever made is between the associate in the storeand the customer.
I didn't catch on to that idea for quite a while. In fact, the biggest single regret in my whole businesscareer is that we didn't include our associates in the initial, managers-only profit-sharing plan when wetook the company public in 1970. But there was nobody around preaching that philosophy in those days,and I guess I was just too worried about my own debt, and in too big a hurry to get somewhere fast.
Today, some of our company's critics would like everybody to believe we started our profit-sharingprogram and other benefits merely as a way to stave off union organizing. The traditional version of whathappened is that the Retail Clerks union organized a strike against us when we opened store number 20in Clinton, Missouri, and another one when we opened store number 25 in Mexico, Missouri, and that inresponse to those troubles we started all these programs to keep the unions out.
That story is only partly true. We did have labor trouble in those two stores, and we did fight the unionslegally and aboveboardand we won. In fact, we've never lost a union organizing election. But the ideafor sharing profits and benefits had come up even before we went public, not from me, but from Helen.
HELEN WALTON:
"We were on a trip, driving someplace, and we were talking about the high salary that Sam was earning,and about all the money and benefits that he was paying the officers of the company in order to keep histop people. He explained that the people in the stores didn't get any of those benefits, and I think it wasthe first time I realized how little the company was doing for them. I suggested to him that unless thosepeople were on board, the top people might not last long either. I remember it because he didn't reallyappreciate my point of view at that time. Later on, I could tell he was thinking about it, and when hebought it, he really bought it."It may be true that our skirmishes with the Retail Clerks and some other unions along thewayconstruction unions at our building sites, and the Teamsters at our distribution centershelped hurryalong our thinking in this direction. The unions, who don't seem to like our company muchmaybebecause they've never had any luck organizing uswant everyone to believe they're the only reason we'veever done anything good for any of our associates. The truth is, once we started experimenting with thisidea of treating our associates as partners, it didn't take long to realize the enormous potential it had forimproving our business. And it didn't take the associates long to figure out how much better off theywould be as the company did better.
I have always believed strongly that we don't need unions at Wal-Mart. Theoretically, I understand theargument that unions try to make, that the associates need someone to represent them and so on. Buthistorically, as unions have developed in this country, they have mostly just been divisive. They have putmanagement on one side of the fence, employees on the other, and themselves in the middle as almost aseparate business, one that depends on division between the other two camps. And divisiveness, bybreaking down direct communication, makes it harder to take care of customers, to be competitive, andto gain market share. The partnership we have at Wal-Martwhich includes profit sharing, incentivebonuses, discount stock purchase plans, and a genuine effort to involve the associates in the business sowe can all pull togetherworks better for both sides than any situation I know of involving unions. I'm notsaying we pay better than anybody, though we're certainly competitive in our industry and in the regionswhere we're operating; we have to be if we want to attract and keep good people. But over the longhaul, our associates build value for themselvesfinancially and otherwiseby believing in the company andkeeping it headed in the right direction. Together, we have ridden this thing pretty darned far.
On the other hand, let me say this: anytime we have ever had real trouble, or the serious possibility of aunion coming into the company, it has been because management has failed, because we have notlistened to our associates, or because we have mistreated them.
I think anytime the employees at a company say they need a union, it's because management has done alousy job of managing and working with their people. Usually, it's directly traceable to what's going on atthe line supervisor levelsomething stupid that some supervisor does, or something good he or shedoesn't do. That was our problem at Clinton and at Mexico. Our managers didn't listen. They weren't asopen with their folks as they should have been. They didn't communicate with them, they didn't share withthem, and consequently, we got in trouble.
We fought those situations using pretty traditional methods. We hired a good labor lawyer, John Tate,who has won a lot of organizing battles over the years, and who has since joined our company. Hisadvice helped me become even more determined to change the relationship between management andthe associates at Wal-Mart: take care of your people, treat them well, involve them, and you won't spendall your time and money hiring labor lawyers to fight the unions. Right after those confrontations, Johnhelped us conduct a management seminar down at Tan-Tar-A resort in Missouri, and soon thereafter welaunched a program called "We Care" designed to let the associates know that when they had problems,we wanted them to come to management and give us a chance to solve them. Our message became"Sure, we are a nonunion company, but we think we are stronger because of it. And because you are ourpartner, we have an open door, and we listen to you, and together we can work out our problems." Theunion, of course, would argue more along the line of "Hey, we can get you a $3.00-an-hour raise. Whydon't you strike"There's been all sorts of debate over why we chose to call our employees "associates," and everybodyand his brother takes credit for it. I don't know. Maybe they're right. But the way I remember it is prettysimple. First of all, in my day, James Cash Penney had called his hourly employees "associates," and Iguess I always had that idea in the back of my head. But the idea to try it at Wal-Mart actually occurredto me on a trip to England.
HELEN WALTON:
"We were on a tennis vacation to England. We were there to see Wimbledon. One day, we werewalking down a street in London, and Sam, of course, stopped to look at a storehe always stopped tolook in stores wherever we wentanywhere in the world, it didn't matter. On that same trip, we lost a lotof our things in Italy when thieves broke into the car while he was looking at a big discount store.
Anyway, he stopped at this one English retailing company, and I remember him saying, 'Look at that sign.
That is great. That's what we should do.' "It was Lewis Company, J. M. Lewis Partnership. They had a partnership with all their associates listedup on the sign. For some reason that whole idea really excited me: a partnership with all our associates.
As soon as we got home, we started calling our store workers "associates" instead of employees. Thatmay not sound like any big deal to some folks, and they're right. It wouldn't have meant a thing if wehadn't taken other actions to make it real, to make it something other than window dressing. The decisionwe reached around that time, to commit ourselves to giving the associates more equitable treatment in thecompany, was without a doubt the single smartest move we ever made at Wal-Mart.
In 1971, we took our first big step: we corrected my big error of the year before, and started aprofit-sharing plan for all the associates. I guess it's the move we made that I'm proudest of, for a numberof reasons. Profit sharing has pretty much been the carrot that's kept Wal-Mart headed forward. Everyassociate of the company who has been with us at least a year, and who works at least 1,000 hours ayear, is eligible for it. Using a formula based on profit growth, we contribute a percentage of everyeligible associate's wages to his or her plan, which the associate can take when they leave thecompanyeither in cash or Wal-Mart stock. There's nothing that unusual about the structure of the plan.
It's the performance I'm so proud of. For the last ten years, the company contributed an average of 6percent of wages to the plan. Last year, for example, Wal-Mart's contribution was $125 million. Now,the folks who administer profit sharingand this includes a committee of associateshave chosen yearafter year to keep the plan invested mostly in Wal-Mart stock, so the thing has grown beyond belief,collectively, and in the individual accounts of a lot of associates. Today, as I write this, profit sharing hasaround $1.8 billion in itequity in the company that belongs to our associate partners.
BOB CLARK, WAL-MART TRUCK DRIVER, BENTONVILLE, ARKANSAS:
"I went to work for Mr. Walton in 1972, when he only had sixteen tractors on the road. The first month,I went to a drivers' safety meeting, and he always came to those. There were about fifteen of us there,and I'll never forget, he said, 'If you'll just stay with me for twenty years, I guarantee you'll have$100,000 in profit sharing.' I thought, 'Big deal. Bob Clark never will see that kind of money in his life.' Iwas worrying about what I was making right then. Well, last time I checked, I had $707,000 in profitsharing, and I see no reason why it won't go up again. I've bought and sold stock over the years, andused it to build on to my home and buy a whole bunch of things. When folks ask me how I like workingfor Wal-Mart, I tell them I drove for another big company for thirteen yearsone they've all heard ofandleft with $700. Then I tell them about my profit sharing and ask them, 'How do you think I feel aboutWal-Mart'"GEORGIA SANDERS, RETIRED HOURLY ASSOCIATE, WAL-MART NO. 12, CLAREMORE,OKLAHOMA:
"I started out in April 1968, and worked as a department head in cameras, electronics, and smallappliances. In the beginning, I made $1.65 an hour, minimum wage. In 1989, when I retired, I wasmaking $8.25 an hour. I took $200,000 in profit sharing when I left, and we invested it pretty well, Ithink. We've done a lot of traveling, bought a new car, and we still have more money than we startedwith. Over the years, I bought and sold some Wal-Mart stock, and it split a lot. I bought my mom ahouse off some of that money. For me, Wal-Mart was just a great place to work."JOYCE MCMURRAY, DISTRICT OFFICE TRAINER AT WAL-MART STORE NO. 54 INSPRINGDALE, ARKANSAS:
"I live and breathe Wal-Mart. Sam always gives so much to the associates, I want to give as much as Ican back in return. I got my fifteen-year pin from him personally. I've had the maximum taken out of mycheck for stock purchases, and I've bought some on the outside too. You cannot imagine how my profitsharing has increased. This year my profit sharing amounts to $475,000. I had originally planned to retirethis year, take my bundle and bail out. But I'm only forty, and I've decided to hang in here for a while. I'mnot sure what we'll do with the money. It's for retirement, of course. But I think we'll also buy a pianoand maybe someday build our dream house. But I'm keeping this stock a long time."JEAN KELLEY, ASSOCIATE IN THE GENERAL OFFICE, WHERE SHE SUPERVISESCARGO CLAIMS:
"I grew up on a farm in Mexico, Missouri, and went to work in store number 25 there when I wastwenty years old. When I came to Bentonville, there were nine people in the traffic department, and nowthere are sixty-one of us. My brother tried to talk me into quitting back in the beginning. He said I couldgo anywhere other than Wal-Mart and make more an hour. Well, in 1981 I had $8,000 in profit sharing.
In 1991, I had $228,000. I told my brother to show me anywhere else I could go and do that, and Iwould change jobs. If you have faith in this company, it's amazing how your loyalty pays off. I'm so glad Istuck to it. My money is going to send my daughter, Ashley, to college."Those are some of my partners, and we've come a long way together. About the same time we startedprofit sharing, we cranked up a lot of other financial partnership programs. We've got an employee stockpurchase plan so associates can buy stock through payroll deductions at a discount of 15 percent offmarket value. Today, more than 80 percent of our associates own Wal-Mart stock, either through profitsharing or on their own, and personally I figure most of the other 20 percent either haven't qualified forprofit sharing yet, or haven't been with us long enough to catch on. Over the years, we've also had avariety of incentive and bonus plans to keep every associate involved in the business as partners.
One of the most successful bonuses has been our shrink incentive plan, which demonstrates thepartnership principle as well as any I know beyond just straight profit sharing. As you may know,shrinkage, or unaccounted-for inventory losstheft, in other words is one of the biggest enemies ofprofitability in the retail business. So in 1980, we decided the best way to control the problem was toshare with the associates any profitability the company gained by reducing it. If a store holds shrinkagebelow the company's goal, every associate in that store gets a bonus that could be as much as $200. Thisis sort of competitive information, but I can tell you that our shrinkage percentage is about half theindustry average. Not only that, it helps our associates feel better about each other, and themselves.
Most people don't enjoy stealing, even the ones who will do it if given the opportunity. And most associates don't want to think that they're working alongside anyone who does enjoy stealing. So under a planlike this, where you're directly rewarded for honesty, there's a real incentive to keep from ignoring anycustomers who might want to walk off with something, or, worse, to allow any of your fellow associatesto fall into that trap. Everybody working in that store becomes a partner in trying to stop shrinkage, andwhen they succeed, theyalong with the company in which they already hold stockshare in the reward.
It all sounds simple enough. And the theories really are pretty basic. None of this leads to a truepartnership unless your managers understand the importance of the associates to the whole process andexecute it sincerely. Lip service won't make a real partnershipnot even with profit sharing. Plenty ofcompanies offer some kind of profit sharing but share absolutely no sense of partnership with theiremployees because they don't really believe those employees are important, and they don't work to leadthem. These days, the real challenge for managers in a business like ours is to become what we callservant leaders. And when they do, the teamthe manager and the associatescan accomplish anything.
Many people have predicted for years that Wal-Mart would lose its way once we got to the toughchallenges of real urban environments. Supposedly, our approach just won't work in neighborhoods withdisenfranchised citizens and underprivileged people who have never been winners. The Wal-Mart waycan't reach folks who have been thieves, and who for the most part haven't felt much pride in their lives.
But I want to tell you about a visit I made to a store near Dallas a couple of years ago: store number 880in Irving, Texas. The store has a very young and very ethnic work force and customer base. And ourmanager there was doing a terrible job with his people. I think maybe he just said to himself, "Well,they're young and they're poor whites and blacks and Mexicans, and they're just going to steal, and Ican't do anything about it." So he was not, very definitely not, being a servant leader.
This store was as bad off as any Wal-Mart I've ever seen. It had the highest shrinkage of any Wal-Marteveraround 6 percent, which for us is unheard of. The store was losing more than a half-million dollars ayear, and we thought we ought to close it. But we had a real maverick named Ed Nagy, who was then adistrict manager. Ed's a fella who's always stepping on toes or breaking one rule or another. He'sconstantly in trouble, and he likes to try new things, and, I have to admit, he reminds me a bit of myself asa youngster. He goes into that store, and he has a talk with the store manager, and he starts training thedepartment heads. And he sets some realistic goals for these folks. And he starts giving them somemotivational talks, explaining how we're different from other companies and they're really missing out onsomething by not participating.
Then he finds out that the associates are just stealing rampant throughout the store, and letting thecustomers steal too because no one has set any controls. No one was checking on the refunds. No onewas checking on the layaways. No one was even checking on the cash registers. If you wanted to steal,you knew you wouldn't get caught. So they started checking on all those things, and they started talkingabout integrity, and they talked about improving sales. Within a year and a half, this store was turnedaround completely. The shrink was down to 2 percent. It started turning a profit, and when I went inthere to visit I think it was one of the proudest moments I've had in forty years of visiting almost twothousand stores. It was just an unbelievable job of an action-oriented, right-thinking motivator stepping inand saving a horrible situation.
Now, why did it work Well, for one thing, Nagy the district managertook a lot of the departmentmanagers out of that store, out of that losing environment, and got them to rubbing shoulders with someof the folks from the successful stores in his district. They had a weekend meeting, and they talked abouttheir departments, and he made these folks participate. Then he had them set their own goals. Andmaybe while they were having lunch with these winners from the other stores, maybe they started todream a little and think a little about how they could improve the mess they were in. He and the othermanagers talked about the numbers with them and began to show them how their jobs and decisionsrelated to those numbers, so they would care about whether their sales were up and not just stand theregoing through the motions. They began to learn a little about merchandising.
But here's the best part. When they put in their controls to try and stop the stealing, they startedchecking every empty box that left the back door. Well, one day they found a big boxa baby buggyboxthat had $400 worth of tapes in it, and they caught the guy at the door with it. So they had a meetingthe next morning, and the manager talked about the woman who discovered the box and caught the thief,and she was a hero. Everybody gave her a big round of applause. The culture was turning around there,in a short period of time. I learned this early on in the variety store business: you've got to give folksresponsibility, you've got to trust them, and then you've got to check on them.
It's true that we have more difficulty in the cities with our approach. We have more trouble coming upwith educated people who want to work in our industry, or with people of the right moral character andintegrity. Folks in small towns in Iowa and Mississippi are more likely to want to work for what we canpay than folks in Houston or Dallas or St. Louis. And, yes, they're probably more likely to buy ourphilosophy in the country than they are in the city. But let me tell you this: a smart, motivational, goodmanager can work what some outsiders call Wal-Mart magic with folks anywhere. It may take moretime. You may have to sift through more people, and you may have to become more skilled with yourhiring practices. But I truly believe that people anywhere will eventually respond to the same sorts ofmotivational techniques we useif they are treated right and are given the opportunities to be properlytrained. If you're good to people, and fair with them, and demanding of them, they will eventually decideyou're on their side.
And I want to tell you something else: Wal-Mart is not a big success merely because we grew up outhere in the country, where people are just naturally friendly and therefore make great retail employees.
It's true that we have many fine associates from the country, but they have had to enter our culture andlearn retailing just like anybody else, and we have spent a good deal of time teaching many of them toovercome their natural shyness and learn to speak up and help our customers. So I think some folksoutside our company may be putting a little too much emphasis on the supposed low quality of workersin the city, and not enough emphasis on the failure of some managers to do their jobs in getting thoseworkers going in the right direction. Years ago, if we hadn't done so well, some of these folks might havesaid you could never build a retailing empire in small-town America because you wouldn't be able toattract a work force that was sophisticated enough.
Another important ingredient that has been in the Wal-Mart partnership from the very beginning hasbeen our very unusual willingness to share most of the numbers of our business with all the associates. It'sthe only way they can possibly do their jobs to the best of their abilitiesto know what's going on in theirbusiness. If I was a little slow to pick up on sharing the profits, we were among the first in ourindustryand are still way out front of almost everybodywith the idea of empowering our associates byrunning the business practically as an open book. I've always told people in the stores what was going onwith the numbers. But after we decided to act like a partnership, we formalized the sharing of informationto a much greater degree.
Sharing information and responsibility is a key to any partnership. It makes people feel responsible andinvolved, and as we've gotten bigger we've really had to accept sharing a lot of our numbers with the restof the world as a consequence of sticking by our philosophy. Everything about us gets to the outside. Inour individual stores, we show them their store's profits, their store's purchases, their store's sales, andtheir store's markdowns. We show them all that on a regular basis, and I'm not talking about just themanagers and the assistant managers. We share that information with every associate, every hourly, everypart-time employee in the stores. Obviously, some of that information flows to the street. But I justbelieve the value of sharing it with our associates is much greater than any downside there may be tosharing it with folks on the outside. It doesn't seem to have hurt us much so far. And, in fact, I've beenreading lately that what we've been doing all along is part of one of the latest big trends in business thesedays: sharing, rather than hoarding, information.
All I know is that nothing ever makes me feel better than when I visit a store and some department headcomes up to me with pride and shows me all her numbers and tells me she's number five in the companybut she plans to be number one next year. I love meeting all these merchants we've got on our team outthere. When they show me an endcap display they've got loaded up with charcoal or baby oil or lunchboxes and then tell me they chose that item because of its high profit margin, and then go on to bragabout all the volume they've done with that item, I get so proud for them I can hardly stand it. I reallymean that. It is just the proudest I get. Because if we, as managers, truly dedicate ourselves to instillingthat thrill of merchandisingthe thrill of buying and selling something at a profitinto every single one of ourassociate-partners, nothing can ever stop us.
Bernie marcus, chairman and co-founder, home depot:
"We feel a great affinity for Sam and Wal-Mart because of the way they treat their people. He's such agreat motivator. But the financial incentives have made a big difference too. We modeled our employeestock ownership plan after Sam's, and it worked for us as well.
"We look at his operationwith what, almost 400,000 peopleand you walk in there, and they're allsmiles. He proved that people can be motivated. The mountain is there, but somebody else has alreadyclimbed it.
"But if you ask Sam how's business, he's never satisfied. He says, 'Bernie, things are really lousy. Ourlines are too long at the cash registers. Our people aren't being helpful enough. I don't know what we'regonna do to get them motivated.' Then you ask some of these CEOs from other retail organizations whoyou know are on the verge of going out of business, and they brag and tell you how great everything is.
Really putting on airs. Not Sam. He is down to earth and knows who he is.
"Without question, Sam Walton is one of the great all-time merchants. Period."Keeping so many people motivated to do the best job possible involves a lot of the different programsand approaches we've developed at Wal-Mart over the years, but none of them would work at allwithout one simple thing that puts it all together: appreciation. All of us like praise. So what we try topractice in our company is to look for things to praise. Look for things that are going right. We want tolet our folks know when they are doing something outstanding, and let them know they are important tous.
You can't praise something that's not done well. You can't be insincere. You have to follow up on thingsthat aren't done well. There is no substitute for being honest with someone and letting them know theydidn't do a good job. All of us profit from being correctedif we're corrected in a positive way. Butthere's no better way to keep someone doing things the right way than by letting him or her know howmuch you appreciate their performance. If you do that one simple thing, human nature will take it fromthere.
ANDY SIMS, MANAGER, WAL-MART NO. 1, ROGERS, ARKANSAS:
"When I started working at Wal-Mart in West Texas, we would anticipate a store visit by the chairmanwith the same sense you get when you're going to meet a great athlete, or a movie star, or a head ofstate. But once he comes in the store, that feeling of awe is overcome by a sort of kinship. He is a masterat erasing that 'larger-than-life' feeling that people have for him. How many heads of state always start theconversation by wanting to know whatyou think What's onyour mind"After a visit, everyone in the store has no doubt that he genuinely appreciates our contributions, nomatter how insignificant. Every associate feels like he or she does make a difference. It's almost likehaving your oldest friend come just to see if you're okay. He never lets us down."There is one more aspect to a true partnership that's worth mentioning: executives who hold themselvesaloof from their associates, who won't listen to their associates when they have a problem, can never betrue partners with them. Often, this is an exhausting and sometimes frustrating part of the management process, but folks who stand on their feet all day stocking shelves or pushing carts of merchandise out of theback room get exhausted and frustrated too, and occasionally they dwell on problems that they just can'tlet go of until they've shared it with somebody who they feel is in a position to find a solution. So, as bigas we are, we have really tried to maintain an open-door policy at Wal-Mart.
DAVID GLASS:
"If you've ever spent any time around Wal-Mart, you may have noticed that it's not unusual forsomebody in Philadelphia, Mississippi, to get in his pickup on the spur of the moment and drive toBentonville, where you can find him sitting in the lobby waiting patiently to see the chairman. Now, really,how many chairmen of $50 billion companies do you know who are totally, 100 percent accessible totheir hourly associates I know lots of people in big companies who have never even seen their chairman,much less visited with him."That's not to suggest that they always like what I have to say. I don't always solve their problems, and Ican't always side with them just because they bring their situation to my attention. But if the associatehappens to be right, it's important to overrule their manager, or whoever they're having the problem withbecause otherwise the open-door policy isn't any good to anybody. The associates would know prettysoon that it was just something we paid lip service to, but didn't really believe. If I'm going to fly aroundall over the country telling these folks they're my partners, Isure owe it to them to at least hear them outwhen they're upset about something.
DEAN SANDERS, EXECUTIVE VICE PRESIDENT OPERATIONS, WAL-MART:
"I've always felt that to Sam, the people in the storesthe managers and the associatesare the kings. Heloves them. And there's no doubt they feel they have an open door to him. He'll go out on store visits,and when he gets back he'll call me and say, 'Give this boy a store to manage. He's ready.' Then I'llexpress some concern about the person's experience level or whatever, and he'll say, 'Give him oneanyway. Let's see how he does.' The other thing, of course, is that he has absolutely no tolerance formanagers mistreating the associates in the stores. When he finds something like that going on, he gets onus about it instantly."So you see, when we say Wal-Mart is a partnership, we really believe it. Partnership involvesmoneywhich is crucial to any business relationshipbut it also involves basic human considerations, suchas respect. Wal-Mart is a spectacular example of what happens when 400,000 people come together asa group, with a real feeling of partnership, and are able, for the most part, to put the needs of theirindividual egos behind the needs of their team.