Founded by Sam Walton, Modernized by Lee Scott

by Gwen Moritz  on Monday, Jul. 2, 2012 12:00 am  

Charles Fishman, author "The Wal-Mart Effect"

A product of the Wal-Mart culture, Scott was initially as inured to outside opinion as anyone else. But according to Fishman, who has interviewed Scott extensively, Hurricane Katrina in 2005 was a turning point in Scott’s thought process. The relentless efficiency that had been badmouthed was now praised.

“Wal-Mart was the organization that was ready to deliver what the people of coastal Louisiana and Mississippi needed immediately,” Fishman said. “Wal-Mart got all this good press. They were ready. As soon as the National Guard lifted the barriers, they came flooding in. And Lee Scott said, ‘That’s what we do: deliver things that people need when they need them.’”

Scott ended up consulting with another Arkansas institution, according to Fishman. “And it was Bill Clinton who helped him understand that they were hurting themselves by acting like their critics had nothing valuable to say.”

When Scott retired as CEO in 2009, he left behind a company that is “no longer living in a bunker,” Fishman said. Scott, he said, should get as much credit for modernizing Wal-Mart as Sam Walton did for creating it.

“Wal-Mart is still Wal-Mart,” he said. “The core mission is the same, but Wal-Mart is a different company than it was 10 years ago — and different in ways that are very valuable.”

In particular, Wal-Mart has embraced sustainability as both smart for business and good for image. Wal-Mart invited executives from Target and Publix and Kmart to tour its first energy-efficient stores and has made a point of sharing best practices and techniques on sustainability.

Environmental Defense Fund employees are given Wal-Mart employee badges and can wander the stores freely. Wal-Mart has told its vendors that the amount of energy used to produce merchandise must decline by at least 10 percent between 2010 and 2020. “That’s Wal-Mart reaching into the operations of their suppliers and doing with sustainability exactly what it did for price,” Fishman said.

The company even publishes a sustainability report online for the world to see. “Sam would have been furious about how much data they share with the world,” Fishman observed.

(Charles Fishman’s original 2003 article for Fast Company magazine, “The Wal-Mart You Don’t Know,” can be read online here.)

 

 

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