Monday, March 29, 2010

Happy Birthday Sam Walton......

Samuel Moore Walton
3/29/18 - 4/5/92

It's not that Sam Walton was a visionary businessman
(although he was), it's that he knew his customers, saw a
huge market that no one else saw, had rock solid values
that he never wavered from, had a passion for growing,
and the discipline to keep re-investing in his business.
While his company had been accused of devastating small
retail businesses through out the Mid-West, Sam had
a different understanding of the situation:
"It was this kind of strong customer demand in the small
towns that made it possible for Wal-Mart to get started in
the first place, that enabled our stores to thrive immediately,
and that eventually made it possible to spread the idea
pretty much all over the country. For many years, we lived
entirely off the principle that customers in the county and in
small towns are just like their relatives who left the farm and
moved to the city: they want a good deal as much as any
body. When we arrived in these little towns offering low
prices every day, satisfaction guaranteed, and hours that
were realistic for the way people wanted to shop, we passed
right be that old variety story competition, with its 45%
mark-up, limited selections, and limited hours."

In his autobiography, Sam Walton: Made in America,
Sam offered his Ten Rules. They are worth reading.

"Rule 1: Commit to your business. Believe in it more than
anybody else. I think I overcame every single one of my
personal shortcomings by the sheer passion I brought to
my work. If you love your work, you'll be out there every
day trying to do the best you can, and pretty soon
everybody around will catch the passion from you - like
a fever.

Rule 2: Share your profits with all your associates, and treat
then as partners. In turn, they will treat you as a partner, and
together you will all perform beyond your wildest expectations.
Remain a corporation and retain control if you like, but behave
as a servant leader in a partnership Encourage your associates
to hold a stake in the company.
Rule 3: Motivate your partners. Money and ownership aren't
enough. Constantly, day by day, think of new and more
interesting ways to motivate and challenge your partners. Set
high goals, encourage competition and then keep score. Make
bets with outrageous pay offs.

Rule 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. Information is power, and the
gain you get from empowering your associates more than
offsets the risk of informing your competitors.

Rule 5: Appreciate everything your associates do for the
business. A pay check and a stock option will buy one kind of
loyalty. But all of us like to be told how much somebody
appreciates what we do for them. We like to hear it often and
especially when we have done something we're really proud
of. Nothing else can quite substitute for a well-chosen, well-
timed, sincere words of praise. They're absolutely free -
and worth a fortune.

Rule 6: Celebrate your success. Find some humour in your
failures. Don't take yourself so seriously. Loosen up and
everyone around you will loosen up. Have fun and always
show enthusiasm. When all else fails, put on a costume and
sing a silly song. Then make everybody else sing with you.
All of this is more important, and more fun, than you think,
and it really fools the competition. 'Why should we take those
cornballs at Wal-Mart seriously?'

Rule 7: Listen to everyone in your company and figure out
ways to get them talking. The folks on the front line - the
ones who actually talk to the customer - are the ones who
really know what's going on out there. You'd better find out
what they know. This is what total quality is all about. To be
able to push responsibility down in your organisation, and
force good ideas to bubble up within it, you must listen to
what your associates are trying to tell you.

Rule 8: Exceed your customer's expectations. If you do
they'll come back over and over. Give them what they want -
and a little more. Let them know you appreciate them. Make
good on all your mistakes - and don't make excuses -
apologise. Stand behind everything you do. "Satisfaction
Guaranteed" will make all the difference. The two most
important words I ever wrote were on that first Wal-Mart
sign: 'Satisfaction Guaranteed.' They're still up there, and
they have made all the difference.

Rule 9: Control your expenses better than your
competition. This is where you can always find the
competitive advantage. For 25 years running- long before
Wal-Mart was known as the nation's largest retailer- we
ranked number one in our industry for the lowest ration of
expenses to sales. 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 are too

Rule 10: Swim upstream. Go the other way. Ignore the
conventional wisdom. If everybody is doing it one way,
there's a good chance you can find your niche by going in
exactly the opposite direction..."

His first store in Bentonville, Arkansas.

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