My Notes & Thoughts

• The "rave" reviews in the front were all really meek!
• A real American Dream story. Not only is it the story of persistence and determination but Sam's actual character, coming from the south, etc.
• Many useful principles to take out of it (some notes grouped below).
• Interesting perspective shift. Walmart itself sucks (when I'm thinking as a privileged 1st world customer)... but then again, here in the Bahamas, what do I wish we had access to? A store like Walmart! Good selection, low prices, and convenient locations.
• Pretty awesome to see such a slow buildup to his story. He was only at my stage at around age 30... but it compounded massively over time (with 5-15 year intervals between "phases").
• I enjoy the origin story (1st half of the book) more than the actual practicalities of the business expansion once it was already big. The origin side is more hidden and it feels more elusive, more "rags to riches" like. This is a common thread with autobiographies. I want to know where they came from, how did they become who they are. Once they get there, it's less interesting.

Chapter Outline:

1. Learning to value a dollar
2. Starting on a dime
3. Bouncing back
4. Swimming upstream
5. Raising a family
6. Recruiting the team
7. Taking the company public
8. Rolling out the formula
9. Building the partnership
10. Stepping back
11. Creating a culture
12. Making the customer number one
13. Meeting the competition
14. Expanding the circles
15. Thinking small
16. Giving something back
17. Running a successful company and the 10 rules that worked for me
18. Wanting to leave a legacy

My Favorite Themes & Ideas:

Sam's Intrinsic Motivation

Set him up for success. He was always trying new things and experimenting. He enjoyed doing this! He enjoyed doing what he was doing. He was intrinsically motivated to succeed over time.

"If I had to single out one element in my life that has made a difference, it would be a passion to compete."

"It never occurred to me that I might lose; to me, it was almost as if I had a right to win. Thinking like that often seems to turn into a kind of self fulfilling prophecy."

“There are two things about Sam Walton that distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.”

"But all this requires overcoming one of the most powerful forces in human nature; the resistance to change. To succeed in this world, you have to change all the time."

Sam's Dedication

‍Never switch off: "There hasn’t been a day in my adult life when I haven’t spent some time thinking about merchandising."

Make time and early mornings: "One way I’ve managed to keep up with everything on my plate is by coming in to the office really early almost every day, even when I don’t have those Saturday numbers to look over. Four-thirty wouldn’t be all that unusual time for me to get started down at the office. That early morning time is tremendously valuable: it’s uninterrupted time when I think and plan and sort things out."

Acknowledging the reality of finite time: "Here’s how I look at it: My life has been a tradeoff. If I wanted to reach the goals I set for myself, I had to get at it and stay at it every day. I had to think about it all the time. And I guess, what David Glass said about me is true. I had to get up every day with my mind set on improving something."

On going public and keeping involve: "Most families somewhere along the line would have said, we don’t want this rat race. We don’t need to do what we are doing. Let somebody else have it. And then, either I would have retired and backed out of the company and sold it to some Dutch investor or to Kmart or Federated, or somebody like that. But I enjoyed doing what I was doing so much and seeing the thing grow and develop, and seeing our associates and partners do so well, that I never could quit."

Trying Crazy Things

Sam was an idea generation and execution machine. He continuously tried one new thing after another. Some worked and some didn't. Those that did far outweighed the cost of the ones that didn't.

The ice cream machine: "Every crazy thing we tried hadn't turned out as well as the ice cream machine of course, but we hadn't made any mistakes we couldn't correct quickly, none so big that they threatened the business."

Taking good ideas from everywhere he could find them. "Most of everything I've done, I've copied from somebody else"

Combining this low risk experiments, keeping the winners, and relentlessly copying new ideas from other sources eventually results in a massive accumulated advantage.

Conservative Values and Family

I really admire conservative values when placed in this lens. Commercially very experimental, but backed up by static fundamental "good people" values.

They form a stable foundation to do great things.

"Through our combined efforts, the kids received your everyday heartland upbringing based on the same old bedrock values. A belief in the importance of hard work, honesty, neighborliness, and thrift."

“I remember asking Dad for permission to climb a bluff overlooking the Buffalo River. He said, "Do anything you’re big enough to do." What an exhilarating challenge of judgment and confidence booster for a twelve-year-old. Later, when I was a young man trying to find my way in the world, he gave me an open invitation to join the Walmart team, but never a hint of pressure. What a wonderful way to grow up.”

A long road and compound growth over time without a clear plan at the start

"Whatever money we made in one store, we’d put it in another new one, and just keep on going."

"Like most other successes, it was about twenty years in the making."

"[the false idea of] Dad as a grand strategist who intuitively developed complex plans and implemented them with precision. Dad thrived on change, and no decision was ever sacred.”

Just in time information and narrow focus on what is working. "I’m always asked if there ever came a point, once we got rolling, when I knew what lay ahead. I don’t think that I did. All I knew was that we were rolling and that we were successful. We had found a concept, certainly, that the customers liked. Even back then, I always said at the first sign of it getting out of control, the first time our numbers don’t come through as they should, we will pull in and put our arms around what we’ve built. Up to this point, of course, we haven’t had to do it."

The Main Principle behind Walmart

Delivering maximum value to the customer is the common thread.

"The secret of successful retailing is to give your customers what they want."

"They assumed that Ron Mayer and all his folks were the reason we’d done well, and they just ignored all the basics we had in place, all our principles. Keeping our costs down, teaching our associates to take care of our customers, and frankly, just working our tails off."

The dangers of overpaying the management team: "But if you get too caught up in that good life, it’s probably time to move on, simply because you lose touch with what your mind is supposed to be concentrating on; serving the customer."

"This is what it’s really all about. In this free country of ours, that shopkeeper’s success is entirely up to you; the customer."

Business Growth Strategy

I like his entire business strategy a lot. Basically, fly under the radar. "Our key strategy, which was simply to put good-sized discount stores into little one-horse towns which everybody else was ignoring."

And the methodology is "Saturate a market by spreading out, then filling in."

"Each store had to be within a day’s drive of a distribution center. So we would go as far as we could from a warehouse and put in a store. Then we would fill in the map of that territory, state by state, county seat by county seat, until we had saturated that market area."

"In those days we didn't really plan for the future. We just felt like we could keep rolling these stores out this way, and they would keep working."

Simplicity and repeatability. "Repeating what worked, stamping out stores cookie-cutter style." "Like so many of the ideas that have made our company work from the beginning, we’re still more or less following this same strategy."

Advantages are synergies and less marketing required. The "halo" effect from previous stores would help the new ones out. "From the very beginning, we never believed in spending much money on advertising, and saturation helped us to save a fortune in that department."

People Driven Management Strategy

Given that the overall business concept and expansion strategy was sound, it came down to scaling the people behind it. “More than anything else, we had manpower problems—finding good people and getting them trained in a hurry."

"Sam wanted a job done, and he was willing to accept creativity as long as the job got done."

Central importance of getting the people right. "So my role has been to pick good people and give them the maximum authority and responsibility."

Where to delegate and where to keep responsibility? "I’ve played to my strengths and relied on others to make up for my weaknesses."

Disregard experience and focus on potential (raw talent, learning ability, attitude, etc.). "Back when I had been at Hested’s, and at Newberry’s, too, a guy had to have ten years’ experience before we’d even consider him to be what we called a manager-in-training. Down here, Sam would take people with hardly any retail experience, give them six months with us, and if he thought they showed any real potential to merchandise a store and manage people, he’d give them a chance. He’d make them an assistant manager."

"If you take someone who lacks the experience and the know-how but has the real desire and the willingness to work his tail off to get the job done, he’ll make up for what he lacks. And that proved true nine times out of ten. It was one way we were able to grow so fast.”

Employee Strategy and Leadership

Positive reinforcement. "All of us profit from being corrected—if we’re corrected in a positive way. But there’s no better way to keep someone doing things the right way than by letting him or her know how much you appreciate their performance. If you do that one simple thing, human nature will take it from there."

Transparency and its benefits. "We share that information with every associate, every hourly, every part-time employee in the stores. Obviously, some of that information flows to the street. But I just believe the value of sharing it with our associates is much greater than any downside there may be to sharing it with folks on the outside."

"Partnership involves money—which is crucial to any business relationship—but it also involves basic human considerations, such as respect."

Human nature and applying basic human values to the people management of the business for better performance (comparison with Japan). "Culturally, things seem so different—like sitting on the floor eating eels and snails—but people are people, and what motivates one group generally will motivate another."

Enlightened self interest. Profit sharing for mutual gain. "We’ve been able to help our associates to a greater degree than most companies because of what you’d have to call enlightened self-interest; we were selfish enough to see in the beginning the value to the company of letting them share the profits."

Minimizing separation between employees and management. "It’s not fair for me to ride one way and ask everybody else to ride another way. The minute you do that, you start building resentment and your whole team idea begins to strain at the seams."

Business Model and Beating the Competition

Walmart had the right model for the time—discounting. Their competitors were mainly variety store businesses and milked it for all it was worth.

"On paper we really didn’t stand a chance. What happened was that they didn’t really commit to discounting. They held on to their old variety store concepts too long. They were so accustomed to getting their 45% markup, they never let go."

Charity

Focus on education. "In the last ten years we have funded a special scholarship program that we started which sends kids from Central America to college here in Arkansas. Right now we’ve got about 180 of them enrolled at three different Arkansas schools, and we pay about $13,000 a year per student to provide tuition, transportation, books, and room and board."

"Each year, every WalMart store sponsors one student in its community to a $1,000 scholarship."

I really like this focus on education. Choose the right people with the most potential to grow and create change, and remove their biggest obstacle; the tools and knowledge to do so.

Sam's 10 Rules to Succeed in Business

• RULE 1: COMMIT to your business. Believe in it more than anybody else.
• RULE 2: SHARE your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner.
• RULE 3: MOTIVATE your partners. Money and ownership alone 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.
• RULE 4: COMMUNICATE everything you possibly can to your partners. The more they know, the more they’ll understand.
• RULE 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.
• RULE 6: CELEBRATE your successes. Find some humor in your failures. Don’t take yourself so seriously.
• RULE 7: LISTEN to everyone in your company and figure out ways to get them talking.
• RULE 8: EXCEED your customers’ expectations. If you do, they’ll come back over and over. Give them what they want—and a little more.
• RULE 9: CONTROL your expenses better than your competition.
• RULE 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 (Break All The Rules)

Sam's Reflection and Introspection

You can see in his words and actions how much he enjoyed building Walmart. His genuine self-belief carried him and the company through the decades.

"My life has been full and fun and challenging and rewarding beyond even my wildest expectations."

"While a lot of people were working away at jobs they might not have particularly enjoyed, I was having the time of my life."

"I believe that millions of people are better off today than they would have been if Walmart had never existed. So I am just awfully proud of the whole deal, and I feel good about how I chose to expend my energies in this life."

Entrepreneurship to Help the World

The ultimate driving forces are free market forces bounded by solid moral values. "I am absolutely convinced that the only way we can improve one another’s quality of life, which is something very real to those of us who grew up in the Depression, is through what we call free enterprise—practiced correctly and morally."

On teaching associates valuable life skills - "They learn to stand up tall and look people in the eye and speak to them, and they feel better about themselves, and once they start gaining confidence there’s no reason they can’t keep on improving themselves."

Other Misc Notes (my thoughts, not directly from the book)

Companies, Founders & their Visions

Founder led companies (public or private) have so much more to offer the world. I think over time as the founder influence dissipates that vision inevitably gets diluted, fades and is lost.

For example, a shareholder-owned company can't really want to "leave a legacy".

But then again my perspective is narrow and limited to mining companies, which are probably on the worse end of the spectrum (primary industry, capital intensive, the founder was probably never passionate about his customers since his customers are other primary industries so the vision was never really there).

Amazon vs. Walmart (& Jeff Bezos vs. Sam Walton)

Both are driven by delivering maximum value to the customer (Amazon probably got this from Walmart). But the approach taken is really a clash in so many ways.

The efficient, emotionless robot vs. the human. Who wins?

What is Amazon's legacy?

Business Models and Generational Changes

Is this the inevitable pathway? A few businesses will be *just* enough ahead of the curve with a new or improved business model, enough to get the jump on the previous generation of businesses using the old model. These new businesses don't really evolve their own model. It's simply that they are the harbingers of the new model into the old market. This is how they destroy their competition.

Until the next generation arrives and the new becomes old and the same process repeats.