Wal-Mart story continued…

Few more from Wal-Mart story. As before, I compare continuously with Infosys from the perspective of organizations which continue to perform even when they are big.

It’s almost embarrassing to admit this, but it’s true: there hasn’t been a day in my adult life when I haven’t spent some time thinking about merchandising. I suspect I have emphasized item merchandising and the importance of promoting items to a greater degree than most any other retail management person in this country. It has been an absolute passion of mine. It is what I enjoy doing as much as anything in the business. I really love to pick an item – may be the most basic merchandise – and then call attention to it.

Many of our best opportunities were created out of necessity. The things that we were forced to learn and do, because we started out underfinanced and undercapitalied in these remote, small communities, contributed mightily to the way we’ve grown as a company. Had we been capitalized, or had we been the offshoot of a large corporation the way I wanted to be, we might not ever have tried many of those things.

For us, thinking small is a way of life, almost an obsession. And I suspect thinking small is an approach that almost any business could profit from. The bigger you are, the more urgently you probably need it. At our size today, there’s all sorts of pressure to regiment and standardize and operate as a centrally driven chain, where everything is decided on high and passed down to the stores. In a system like that, there’s absolutely no room for creativity, no place for the maverick merchant that i was in the early days at Ben Franklin, no call for the entrepreneur or the promoter. Man, I’d hate to work at a place like that, and i worry every single day about Wal-Mart becoming that way.

Just interesting to see the passion in the first place. Other thing is the advantages of being small to start, being forced to adapt and innovate. Lastly on the need to continue to innovate rather than being tied down with operational efficiency alone.

Your stores are full of items that can explode into big volume and big profits if you are just smart enough to identify them and take the trouble to promote them. I can name you a lot of retailers who were originally merchandise driven, but somehow lost it over the years. In retail, you are either operations driven-where your main thrust is toward reducing expenses and improving efficiency-or you are merchandise driven. The ones that are truly merchandise driven can always work on improving operations. But the ones that are operations driven tend to level off and begin to deteriorate. So Sam’s item promotion mania is a great game and we all have a lot of fun with it, but it is also at the heart of what creates our extraordinary high sales per square foot, which enables us to dominate our competition.

So when we sit down at our Saturday morning meetings to talk about our business, we like to spend time focusing on a single store, and how that store is doing against a single competitor in that particular market. We talk about what that store is doing right, and we look at what it’s doing wrong. Focusing on a single store can accomplish a number of things. First, of course, it enables us to actually improve that store. But if in the process we also happen to learn a particular way in which that store is outsmarting the competition, then we can get that information out to all our similar stores around the country.

This was interesting. What if the senior management sits down with one client account a week to see how it is performing and what more could be done?