When Sam Walton opened the first Wal-Mart in 1962, it wasn’t that impressive. As he later admitted, “At the start, we were so amateurish, and so far behind.” Walton knew that if his stores didn’t become far better, they wouldn’t last. So his philosophy, “Improve something every day,” wasn’t just a worthy goal, but a necessity. As Jeffrey A. Krames explains in What the Best CEOs Know: 7 exceptional leaders and their lessons for transforming any business, Wal-Mart’s key to improvement was to create a learning culture. By 2002, that culture had built Wal-Mart into not just the world’s biggest retailer, but the world’s biggest company. Krames’ chapter on Walton offers advice such as:
- Never stop learning. Sam Walton continuously refined his strategy by spending most of his time in stores, both his and those of his rivals. He observed and asked endless questions, learning from everyone around him — his employees, customers and competitors.
- Even your worst competitors have something to teach you. It’s easy to assume you can only learn from your strongest rivals. But Walton taught his managers that you can learn something worthwhile from every competitor. Even your weakest rival may have that one good idea you can use in your own business.
- Meet on weekends with your managers to get a jump on the competition. Walton said it was at his Saturday morning meetings with managers that Wal-Mart first decided to try things that seemed unattainable. These sessions gave the company a chance to fix things two days before the competition could catch up.
- Hire people who love to learn. Walton understood the importance of experience, but always looked for employees who shared his zest for business. If two candidates were reasonably comparable in their qualifications, he would choose the one who was hungry to learn, even if that person had less relevant experience.
- Use IT to create a competitive edge. Although Walton needed some convincing at first, he soon grasped the importance of harnessing information technology to cut costs and get a leg up on the competition. As early as 1983, Wal-Mart pioneered the use of satellite technology to get huge amounts of data flowing among its stores, warehouses and head office. It used this information to manage its inventory better than any company had ever done. By 1992, its IT system was second in the world only to that of the Pentagon, generating data crucial to its “supplier as partner” philosophy. These partnerships fueled further exponential growth by permitting Wal-Mart to beat anyone on price.