H. Lee Scott, Jr. is the current CEO of WalMart. On Jan 14, 2009, he reflected on his 9 year tenure as CEO as a guest on the Charlie Rose show.
Certain basic truths, that we all know but bear repeating, were once again emphasized. Here are my top takeaways from that interview:
1) Listen to your customers, listen harder to your critics/opponents, and get external points of view. WalMart gets a lot of negative press and new store locations often generate bitter opposition from some locals. However the majority (who vote with their dollars) would appear to favor the store. WalMart’s top management team who consider themselves decent and fair business people, with an offering that the majority clearly prefers, were unable to understand the opposition. Each side retreated to their trenches and dismissed the other. Scott described how members of the board, with external experience, were able to get Wal-Mart management to listen carefully to what the opposition was saying and with dialog, help mitigate the situation.
2) Focus like a laser on your core competency. Walmart excels at logistics, distribution, store management — the core business of retailing. It is, however, a low margin business. With its enormous cash reserves should Wal-Mart go into other areas e.g. product development where margins are much higher? While it’s tempting, remember “Jack of trades, Master of none”? 111th Congress?
3) Customers will educate themselves before shopping. In the Internet age, expect everybody to be better educated about their choices. This means, if you are fuzzy on your own value proposition and cannot articulate it well on your own product website, then expect to do poorly.
4) In business – get the 80% stuff done quickly. We all know that the first 80% goes quickly, it’s the remaining 20% that is hard and gets progressively harder (Zeno’s Paradox ). After all more than 80% of code consists of error handling. While that 20% is critical for product development, it’s the big 80% done quickly that counts in business (and in government/policy).
The fundamentals are always hard to ingrain – eat in moderation, exercise regularly and all that. Worth reminding ourselves in different settings on a regular basis.