MY LEADERSHIP DEVELOPMENT <Sam Walton: Made in America>

Hojae Shin Business Department #0620637

A. Find fundamental basic things discussed in book about leadership. What foundations of leadership can be found during childhood? What can be developed during the childhood?

One such example is Sam Walton, founder of Wal-Mart, who often visited Wal-Mart stores across the country to meet with associates to show his appreciation for what they did for the company. Sam Walton gave rules for success in his autobiography, one of which was to appreciate associates with praise (Walton, 1996).

1.

Transformational

This type of leader is one who is able to continually inspire his or her teams and influence subordinates to improve and/or change. Leaders like this are usually visionaries with boundless enthusiasm. Legendary corporate icons such as Lee Iaccoca and Jack Welsh would clearly fall into this category. A good present-day example of this type of leadership can be found in Virgin Group Ltd, a very successful corporation renowned for its presence in a wide variety of global markets. Many business analysts attribute a great deal of Virgin's success to the innovative leadership style of its chairman, Sir Richard Branson, who has demonstrated a marked ability to inspire his people to innovate and grow. One of the most striking all-time success stories associated with this leadership style is Wal-Mart founder Sam Walton, the architect of what has evolved into the largest private employer in the U.S. Walton's characteristic leadership style included regular visits to Wal-Mart stores across the country, where he would meet with associates to show his appreciation for their contributions to the company.

B. Try to pick up 10 specific leadership skills/philosophy/values from Sam Walton which you think is dominant for his success at Wal-Mart. Provide details. In chapter 17, Sam Walton describes, Running a successful company: ten rules that worked for me (312). His ten rules include the following: commit to your business, share your profits with all your associates, and treat them as partners, motivate your partners, communicate everything you possibly can to your partners, appreciate everything your associates do for the business, celebrate your successes, listen to everyone in your company, exceed your customers expectations, control your expenses better than your competition, and swim upward. Two main goals that Sam Walton explains but are not listed in the golden 10 rules include work hard and teamwork. He explains that he should not have to explain these two goals because these two

goals are the fundamentals to starting a business. However, it is important to notice from the golden 10 rules that 6 out of the 10 goals are about people and how to treat them. This demonstrates the importance Sam Walton placed in people, both customers and employers. In the following text, I will explain 10 specific leadership skills/philosophies/values I personally believe led to Sam Waltons success at Wal-Mart. 1.

You can learn from anybody- Sam Walton first learned the concept of you can learn
from anybody during his first job at JC Penney. He states, he [James Cash Penney] didnt get around to his stores as often as I would later on, but he did get around. I still remember him showing me how to tie and package merchandise, how to wrap it with very little twine and very little paper but still make it look nice. (23-24) I believe it was during this time that he understood the importance of listening to his workers, especially the employees that directly worked with the customers. While he was working at JC Penney, he mentioned so at lunch I would always go wander around the sears and the Yonkers stores to see what they were up to. (24) What he was doing there can best be described from this next statement made by him: most everything Ive done Ive copied from somebody else (p47). Sam Walton himself acknowledges that he copied most of his philosophies from what he saw in others. The importance, however, is that he was able to make it even better. Last, he further explains that Great ideas come from everywhere if you just listen and look for them. You never know whos going to have a great idea (324). Sam always carried with him a little spiral notebook to take notes while he would go around talking to people. He states, Oh, this is just part of the educational process. Thats all. Of course, hes still doing the same thing today, except he uses his little tape recorder (62).

2.

Value of the money- Sam Walton repeats over and over again during the course of the
book the importance of controlling expenses better than your competitors. He learned from an early age to help provide for his family and earn his own money by selling magazine subscriptions and paper routes back when he was in high school. I believe that it was through this process that he was able to realize how hard it was to get his hands on even one dollar. Even his father mentions, When a penny is lying out there on the street, how many people would go out here and pick it up? Ill bet I would. And I know Sam would (6). On one of his excerpts in the book, he explains and even then they had to practically tie me up and hold me down to do it. On the road, we sleep two to a room (12). Personnel from Wal-Mart were always on a pretty restricted budget due to his

philosophy meaning they had to fly economy class, stay at middle-class hotels, and have dinner mostly at family restaurants. Lastly, Sam leaves a message to his future grandchildren: if you start any of that foolishness, Ill come back and haunt you. So dont even think about it (9). 3.

Follow your passion- Sam Waltons always pursued everything with a true passion. His
mom taught him a great lesson in life: she told me I should always try to be the best I could at whatever I took on (15). This value in life led to his focus in always having to be the best; he explains: What motivates the man is the desire to absolutely be on top of the heap. It is not money (11). Moreover, his passion for retail dates back to his youth. He loved retailing, and he was always committed to his business. I have always pursued everything I was interested in with a true passion- some would say obsession (15). There were even times when people told him to quit retailing. When he was working for JC Penney, Blake would come auditing his store and would tell him Id fire you if you werent such a good salesman. Maybe youre just not cut for retail (23). However, even these statements did not stop his passion for retailing. I dont know about that kind of stuff. But I know this for sure: I loved retailing from the very beginning, and I still love it today (22).

4.

Take care of employees- Sam Walton was unlike most owners. He genuinely cared about
every one of his employees. He created a culture where everyone was treated as a business partner or an associate. Although the salary of people working at Wal-Mart was not necessarily high, he always gave his employees another option But weve always rewarded them with stock bonuses and other incentive related directly to the performance of the company (323). It was through this incentive that Sam was able to hire his first employee Willard Walker. Walker explains, I had to move myself over there, work half days for free until the store opened, and I remember sleeping on a cot in the storeroom. But he said I would get a percentage of the profits, and that appealed to me. (45-46) By providing a sharing plan for his employees such as stocks or a percentage of the profits, he was able to provide the sense of partnership that employees often seek for in a company. Moreover, here is a great example of what one of his employees thought about him soon after launching the first Wal-Mart I went out and borrowed what seemed like an awful lot of money at the time and bought stocks with it He told me I had more faith than he did. I always knew it was going to be successful. (46) Even before Sam himself knew how successful Wal-Mart was going to be, his employee was buying

stocks borrowed from a bank because he believed in him. 5.

Customers are always priority- Sam Walton always brought it upon himself to listen to
the customers and respond to their needs: For him, customers were always considered first before everything. He explains, We exist to provide value to our customers, which means that in addition to quality and service, we have to save them money. Every time Wal-Mart spends one dollar foolishly, it comes right out of our customers pockets (13). Moreover, he thought that the success of the company correlated in respect to the customer as he explains In this free country of ours, that shopkeepers success is entirely up to you: the customer (327). He believed that the success in retailing lay in providing customers with what they wanted. Building up customer demand in small markets was also critical for his success as he was brave enough to enter those small markets where no one else willing to enter.

6.

Continuously implement new ideas and experiments- Sam Waltons mindset is best
described by David Glass. He mentions First, he gets up every day bound and determined to improve something. (50). His brother mentions, He never stopped trying to do something different (36). Last, he even describes himself in this manner, but it didnt take me long to start experimenting- thats just the way I am and always have been (30). Moreover, he thought and executed on new ideas as well as encouraged people to do the same: I read an article about these two Ben Franklin stores up in Minnesota that had gone to self-service- a brand new concept at the time. I liked it. So did that too. (42) David Glass mentions that Sams character distinguishes him from almost everyone else. Sam states, but it was really what wed been doing all along: experimenting, trying to do something different, educating ourselves as to what was going on in the retail industry and trying to stay ahead of those trends. (pg. 61) It was interesting how he attracted customers when he first worked for Ben Franklin in Newport. He was the first to make promotions on popcorn and ice cream and attract customers to his store. He was gifted and intellectual. Moreover, he never had a hard time implementing what he had learned from his past experiences. He states I have always been driven to buck the system, to innovate to take things beyond where theyve been (61). Constant innovation was the path to success and he knew it. It soon became one his lifetime goals.

7.

Recruit only capable employees- Sam Walton mentioned that the only employers he
employed where the people that he believed that the capacity to replace himself. One of the main reasons he constantly went to other retail shops was so he could recruit new

people which he thought were capable of producing results. Sam states, so I did something I would do for the rest of my run in the retail business without any shame or embarrassment whatsoever: nose around other peoples stores searching for good talent. Thats when I made my first real hire, the first manager, Willard Walker (44). He did not consider going to other businesses searching for manpower a shameful act. He knew that he needed the best employers to run his company and he was constantly searching for future workers. 8.

Perseverance- What did Sam Walton do every time he failed? There are two nightmares
that he describes in the book. His first failure in signing a lease that did not include a clause to renew after five years for his Ben Franklin Shop in Newport. The second was probably his biggest mistake of his career: investing and backing out from a shopping center in Arkansas. What is brilliant and amazing about Sam is that he always tried to keep his commotion and think positively. He explains after his first failure, I had to pick myself up and get on with it, do it all over again, only even better this time (39). Even during a crisis he was still thinking about how sincerely he wanted to deliver great value to his shoppers. He explains, Ive always thought of problems as challenges, and this one wasnt any different (39). Ive never been one to dwell on reverses, and I didnt do so then (39). David Glass states a great aspect about Sams personality that should serve as a model for many business owners to come: he is less afraid of being wrong that anyone Ive ever known. And once he sees hes wrong, he just shakes it off and head it another direction (50).

9.

Unstoppable momentum- Everyone acknowledges that Sam Walton was a big risk-taker.
Once he got his first three stores working, it was only a matter of time before he opened up stores after stores. He was positive that the implemented ideas in the retail business were working, and he saw the potential. His success allowed him to keep expanding. Although expanding sounded crazy to people at the time, he could not stop because it was successful. He kept opening new stores with the profit he had made by launching his previous store. However, it is important to recall that Sam always had a confidence in himself. Even before he started his own business, he states My only experience was the Penney job, but I had a lot of confidence that I could be successful on my own (26). He was simply a natural risk-taker, also proven from his past failure from wanting to open the first shopping center in Arkansas. I believe the main reason his drive for momentum kept going was because he was not afraid of making mistakes and having to turn the other

way. 10. Seek for competition- Sam Walton was constantly going to other shops to find out what they were doing and what was working for them. He explains, Watching this guy [Duncan Majors] is what got me excited about retail (23). It was through watching other people that he fell more in love with his retailing, his job. Moreover he states, The intersection where I worked in Des Moines had three stores, so at lunch I would always go wander around the Sears and the Yonkers stores to see what they were up to (24). It was through John Dunham that he learned what it is to retail. After opening up his first Ben Franklin shop without having any prior experience or knowledge in the business, he states I didnt just learn from reading every retail publication I could get my hands on, I probably learned the most from studying what John Dunham was doing across the street (29) As he learned more and more from John Durham, he knew he could do better while looking at his prices, displays, and his shop. He further states, And of course, what really drove Sam was that competition across the street- John Dunham over at the Sterling Store (29). It was through John Durham that he learned his most important lesson yet in learns from your competitors. Moreover, it was through competition that Sam was able to step back up in the retail business. After his first failure in Newport, he went on to a small city in Bentonville where even he thought another shop was not needed. He states, and it [Bentonville] already had three variety stores, when one would have been enough. Still, I love competition, and it just struck me as the right place to prove I could do it all over again. (41) Competition got the best out of Sam. Furthermore, he acknowledges that KMart and Target made Wal-Mart a better company and the company it is today. Sam Walton was a great man. He should be a role model for many students, especially in the Business Department. He is a quintessential example for students that are planning to pursue a business. If people can become half the person Sam Walton was, I believe that he or she will be able to carry a successful business. Once again, I would like to remind you of a culture Sam Walton made around Wal-Mart, It was real blessing for me to be so green and ignorant, because it was from that experience that I learned a lesson which has stuck with me all through the years: you can learn from everybody (29).

Works Cited Walton, Sam., Huey, John. Sam Walton: Made in America. New York: Doubleday, 1992.