Learning from Wal-Mart.

In a retail economy that bears a striking resemblance to a mine shaft, Wal-Mart is still managing to rack up what would be impressive same store sales growth in a boom market. Clearly the world’s largest and most successful retailer still has a lot to teach us – as Woolworths Australia would agree.

Along with 1,500 other retail groupies I was lucky enough to pick up a few pearls of Wal-Mart wisdom from Jack Shewmaker at the World Retail Congress. While reading the latest numbers from Wal-Mart this week, I thought it was timely to re-visit some of his pithy pearls of wisdom. As the home of the six-pack it seems appropriate that these come in neat little packs of six.

The first six-pack is Sam Walton’s Six Founding Principles of Wal-Mart:
1.Stimulate employee involvement & participation – in a genuine way seek input & engage staff to help the business do things better & more profitably.
2.Maintain a 360 degree view of the retail world – remember shoppers have a 360 degree context in which they shop & you need to understand your place within it.
3.Instill a culture of constant change – if speed is the only form of sustainable competitive advantage & customers have an unquenchable thirst for newness, then contemporary retail businesses must be built to embrace constant change as part of their DNA.
4.Use capital efficiently – self-evident it would seem, but surprisingly in need of re-stating
5.Embrace technology – the enabler of business efficiency, ease of change & customer service in a blended retailer.
6.Develop a disciplined internal communication strategy – staff are the first customer & a 180 degree feedback loop is essential.

The second six pack is Jack Shewmaker’s Six Deadly Sins:
1.Underestimating the competition – arrogance & complacency can lead to some monumental miscalculations of competitors.
2.Failure to meet core customer’s needs in key markets – it is always easy to be seduced by the new thing rather than to keep refining what exists.
3.Failure to re-invest in basic core business – your core business is your strength & must be continually nurtured to ensure growth is sustainable
4.Failure to re-align metrics to changing customer demands – measuring the wrong things can be as damaging as measuring nothing & lead to a misshapen view of performance.
5.Failure to balance the needs of all stakeholders – great businesses know that the needs of stakeholders are often in conflict & these conflicts must be managed to be sustainable
6.Failure to change fast enough – it is easy to fall into the trap of getting comfortable with the way you do things.

Even Wal-Mart – as big and successful as they are – makes mistakes. But they learn from them and use them to makes themselves better. As the saying goes – “What doesn’t kill you only makes you stronger”. These are 2 simple six packs. But they are the tip of the iceberg that was formed from years of learning. What can you learn from Wal-Mart?