The Walmart Story
I remember reading a fascinating interview with Laslo Bock, who was the individual in charge of all the hiring at Google. He said one of the primary characteristics they looked for in their employees was intellectual humility. Those with intellectual humility realize that they don’t know everything and they are always seeking to learn and grow. They seek continuous improvement.
A great example of intellectual humility can be found in the Walmart story.
In the late 1950s, a small, unknown company had a very big idea: “to bring discount retailing to rural and small town areas.” It became one of the first companies to bet its future on this concept, and it built a substantial early lead by adopting everyday low prices for everything, not just specific lure-the-consumer items. Its visionary leader created an ethos of partnership with his people, engineered sophisticated information systems, and cultivated a performance-driven culture, with store managers reviewing weekly scorecards at 5 a.m. every Monday morning. Not only did the company decimate Main Street stores in small towns, but it also learned how to beat its primary competitor, Kmart, in head-to-head competition. Every dollar invested in its stock at the start of 1970 and held through 1985 grew more than six thousand percent.
So, now, what is the company?
If you answered Wal-Mart, good guess. But wrong.
The answer is Ames Department Stores.
Ames began in 1958 with the same idea that eventually made Wal-Mart famous and did so four years before Sam Walton opened his first Wal-Mart store. Over the next two decades, both companies built seemingly unstoppable momentum, Wal-Mart growing in the mid-South and Ames in the Northeast. From 1973 to 1986, Ames’s and Wal-Mart’s stock performances roughly tracked each other, with both companies generating returns over nine times the market.
So where is Ames at the time of this writing?
Dead. Gone. Never to be heard from again. Wal-Mart is alive and well, #1 on the Fortune 500 with $379 billion in annual revenues.
What happened? What distinguished Wal-Mart from Ames?
A big part of the answer lies in Walton’s deep humility and learning orientation. In the late 1980s, a group of Brazilian investors bought a discount retail chain in South America. After purchasing the company, they figured they’d better learn more about discount retailing, so they sent off letters to about ten CEOs of American retailing companies, asking for a meeting to learn about how to run the new company better. All the CEOs either declined or neglected to respond, except one: Sam Walton.
When the Brazilians deplaned at Bentonville, Arkansas, a kindly, white-haired gentleman approached them, inquiring, “Can I help you?”
“Yes, we’re looking for Sam Walton.”
“That’s me,” said the man. He led them to his pickup truck, and the Brazilians piled in along Sam’s dog, Ol’ Roy.
Over the next few days, Walton barraged the Brazilians with question after question about their country, retailing in Latin America, and so on, often while standing at the kitchen sink washing and drying dishes after dinner. Finally, the Brazilians realized, Walton – the founder of what may well become the world’s first trillion-dollar-per-year corporation – sought first and foremost to learn from them, not the other way around. This is intellectual humility.
Wal-Mart’s success worried Walton. He fretted over how to instill his sense of purpose and humble inquisitiveness into the company beyond his own lifetime, as Wal-Mart grew to hundreds of billions of dollars of annual revenue. Part of his answer for how to stave off hubris came in handing the company to an equally inquisitive, self-deprecating CEO, the quiet and low-profile David Glass. Most people outside retailing do not recognize the name David Glass, which is exactly how Glass would want it. He learned from Walton that Wal-Mart does not exist for the aggrandizement of its leaders; it exists for its customers. Glass fervently believed in Wal-Mart’s core purpose (to enable people of average means to buy more of the same things previously available only to wealthier people) and in the need to stay true to that purpose. And like Walton, he relentlessly sought better ways for Wal-Mart to pursue its purpose. He kept hiring great people, building the culture, and expanding into new arenas (from groceries to electronics) while adhering to the principles that made Wal-Mart great in the first place.
Those with intellectual humility seek to learn from everyone and everything. They have a real inquisitiveness. So wherever you are in your life journey, know that there is always an opportunity to learn and grow. This is the perspective intellectual humility brings into your life.
Richard E Simmons III is the founder and Executive Director of The Center for Executive Leadership and a best-selling author.
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