Since Walmart’s recent announcement that they were closing a bunch of stores, pundits have chimed in about what’s wrong. A recent article at Forbes.com entitled, “Walmart’s Outdated Management Style Is Failing Customers,” suggests there is something wrong with their ability to connect with the customer. I agree and that is not due to an outdated management style, but rather a failure to follow Sam’s vision and original management style.
I believe, based on a large amount of observational research, that Sam’s requirement that he and his senior management team spend time in stores kept them connected to customers and employees. It is my belief that this practice has faded over the time since Sam died to the point where it is almost non-existent.
The Forbes.com article ends with this line: “Apparently, the managerial revolution that has swept the American enterprise world missed Walmart.” Wrong and worse. It was alive and well and a tenant of Walmart until Sam passed. Now Walmart, like too many other companies, pays lip service to focus on the customer. As my late friend George Nelson used to say: “NATO: No Action Talk Only.”
The fix is easy to describe, but takes a strong re-commitment to make it happen. Sears in its heyday was customer focused. They lost that construct many years ago, and Walmart took their place as America’s Retailer. Now Walmart is forgetting. Who will step into the void? Amazon maybe?
Simple phrases like “employees are our most important asset” and “our focus is on the customer” are easy to say. Harder to deliver. Like with politicians, talk is cheap.
Perhaps another indicator of Walmart’s change can be seen on the vendor side as well. Walmart has always focused on making sure their vendors remove costs that don’t add value so Walmart can deliver the best value for their customers. They also were one of the only “big box” retailers who didn’t push for promotional money, distribution center funding, stocking charges, etc. They were straight up merchants. Not so anymore as they are starting to push for some of these fees (and similar) from their merchants.
Too bad, as they seem to be following in the footsteps of other formerly great retailers, which are now a shadow of their former selves.