Steuart Walton, chairman of the Arkansas Economic Recovery Task Force
Steuart Walton has blended his own business interests with those of Walmart Inc., which his grandfather, Sam Walton, founded and which he serves as a director. He is the founder and chairman of RZC Investments, an investment business located in Bentonville. He is also founder and former CEO of Game Composites of Bentonville, a manufacturer of carbon fibre aircraft and aircraft parts. He is a director of Rapha Racing Limited, a cycling apparel business, and is a board member of Crystal Bridges Museum of American Art, Smithsonian National Air & Space Museum and Leadership for Education Equity. He previously worked at Allen & Overy, a London-based law firm, and in Walmart’s corporate mergers and acquisitions office while living in London.
Walton has a law degree from Georgetown University and says Gov. Asa Hutchinson asked him to chair the Arkansas Economic Recovery Task Force.
How can Arkansas’ economy best survive the pandemic? Can the economy, state and national, fully recover with an infection rate as high as it is now?
I think Arkansas has a great story to tell. It’s certainly no worse than most states out there. And I think Arkansas has been discussing the message that all business is critical in Arkansas. And I think that the orientation that the governor’s had toward keeping businesses open, toward keeping the economy open while learning to live with the COVID-19 environment is absolutely the right course of action.
In terms of the best way for us to effect a recovery, I would say let’s look at how we can position Arkansas to capture some of the upside and some of the changes that are going to come out of COVID. I think that our state’s reputation nationally might be — I think during a crisis people are willing to be open-minded, more open-minded than not. And I think that with some strategic investments in how we talk about the state and in how the state is perceived nationally, we could really align Arkansas’ reputation with reality across the nation in an effective way. And, you know, I think most folks from Arkansas will tell you that our reputation doesn’t really line up with the reality and that Arkansas is actually an amazing place. It’s got so many things going for it. It’s got some wonderful natural assets, an economy that’s vibrant and resilient and proving so.
I think that if we can figure out how to talk about the state in a positive way, you’ve got a situation where people are open to changing their minds more often in an environment like this. If we could focus some strategic investment around talking about the state and kind of aligning perception with reality, I think there’s a huge opportunity for the state. It’s almost every single corner of the state, whether it’s ag, whether it’s tech, whether it’s retail, consumer products. I think there’s culture, arts and culture. I think there’s just tremendous opportunity.
How would you respond to criticism that the Arkansas Economic Recovery Task Force is too corporate-dominated? Should there have been more divergent viewpoints, organizations like maybe the Public Policy Panel or the Arkansas Education Association, labor unions, that kind of thing?
I’m not so sure, personally, because business drives the economy. I don’t think there’s really any question about that. And I think about three-quarters of the Task Force is specific to the business community. And then I think we have a really broad representation of constituencies and stakeholders beyond just the business community. Several educational folks are on there, whether community colleges, superintendents, Hunter Yurachek at the University of Arkansas. So I feel pretty good about the representation of viewpoints. We’ve got some religious leaders on there as well. They’ve been really helpful and critical to getting those organizations to the point where they’re operating, given the current environment.
I don’t actually think that criticism holds up. I think it reflects a lot of the governor’s contacts and network around the state. I also think that it is a pretty darned diverse group of folks spanning 35 members of the task force. And we do have robust discussions. It’s certainly not a uniform, like-minded, everybody-thinking-the-same-thing, walking-the-same-way kind of group, which I think is terrific.
Can you tell us a little bit about RZC Investments, which you co-founded with your brother, Tom. We haven’t really reported much in Arkansas Business about your purchase of Rapha Racing. Is that move of their headquarters to Bentonville complete and what’s going on there?
They are moved to Bentonville, up and running. Our first real work, kind of new work out of the Bentonville office, is launching the mountain biking line for Rapha, which they’ve never had before. And that’ll come out in 2021. We’ve got a lot of excitement around that.
I think it’s just going to be a really natural extension of the brand into certainly an area where Tom and I are passionate. We haven’t been too involved in it, to be honest. But our direction is, hey, take the kind of grassroots, down-to-earth culture and vibe from the mountain bike movement in northwest Arkansas and incorporate that into the mountain bike brand for Rapha and let’s see where it goes. Because we think that there’s something that’s really authentic and native and also accessible, approachable about the way that our trails link through the community and are able to be accessed by all, and we want to try and capture that within the Rapha mountain biking brand. With respect to RZC, they’re actively making investments in companies that will have a material impact to the northwest Arkansas economy. We just hired a new person to add to the team. They’re growing and out there looking for opportunities for businesses that want to come and be part of the northwest Arkansas story and that want to operate in an environment where there are a lot of tailwinds.
Is RZC Investments focused on certain sectors?
No. Two things on that. One, I say you’ve got to keep throwing your best pitch and there are certainly industries in northwest Arkansas that make sense for us to look at. But, broadly speaking, there’s no focus. And the industries are where you have most of your workforce talent.
There are other elements I think that could eventually become one of our best pitches. I think outdoor recreation might stand out as the most obvious area where some real strides have been made recently. And you’re starting to see just more and more attention paid to what’s going on in Bentonville, what’s going on in the Ozarks — what’s going on in Arkansas generally — in the outdoor recreation space, whether it’s opportunities to get outside and have fun, or whether it’s opportunities to sell products or create products for those people who are coming to our state to enjoy the outdoors.
Can you tell us a little bit about this other company that you founded in Bentonville, Game Composites? What are aerobatic personal airplanes and what’s your interest in them?
I used to compete in aerobatic flying when I lived in the U.K. I was also looking to try to find some way to get involved in the aerospace industry, and I didn’t have anything in mind and somehow or another I ended up starting a company with my good friend Philipp Steinbach, who I got to know through aerobatic flying. And Game has come an awful long way.
We are a fully certified production facility with the FAA. We are in production and I think we’re building serial number 28 at the moment. We’ve got some really exciting customers that we’ve made deliveries to. We’ve got some really exciting customers that we’re going to be delivering airplanes to just in the near future. And we’ve got, also, what I would say is a high-quality, low-cost composite manufacturing technique that allows us to think more broadly about opportunities within the aerospace industry.
I couldn’t be more excited actually about the future of Game Composites. And, again, we see just tremendous opportunities for us to grow. We’re actively in the early stages of a new design, and it’ll be something other than an aerobatic airplane, but a new aircraft. The company’s got a great team of composite manufacturing technicians.
How many people does Game Composite currently employ? How big is that facility?
I think we’re somewhere between 40 and 45 at the moment, with plans to grow. We’re hoping to expand our facility footprint and also, as we move along with our future growth ambitions, there’s no doubt we’ll continue to grow. Currently we’re at 43,500 (SF).
You were instrumental in establishing the regional trail system, the Razorback Regional Greenway. What should our readers know about the economic development benefits of robust biking trail systems?
Well, my brother Tom always says great trails make great communities and great communities build great trails. It’s kind of a chicken-and-egg sort of thing, but the fact of the matter is you have to start somewhere.
The Greenway has been just a fantastic success, and I think of it as kind of a cornerstone of our entire regional network. There’s been so many spurs and connections that have been built off of it. You can ride 30 miles from Fayetteville town square to Bentonville town square on a bike path — you can carry on to Bella Vista, as matter of fact — and you go through some just spectacular scenery, as well as some wonderful downtown environments. There’s a lot of businesses along the way that you can stop, fix a flat or get a beer or whatever. So it’s really, I think, spurred a lot of development along it, as well as created opportunities to add trails.
As much of a story as the trail-building has been in northwest Arkansas over the last 12, 13 years, we’re just getting started in terms of truly meeting the needs of trail infrastructure for a region that’s growing like ours. And you know, the more you can get in today, the better off you’re going to be going forward, because the cost of building trails goes up exponentially as an area urbanizes.
What is it about mountain biking, assuming you still do it, that really appeals to you, that’s so important to you?
I always like to say biking is good for the heart and flying is good for the soul. And mountain biking, funnily enough, is almost like flying through the woods. I love road biking as well, but mountain biking has a special appeal because you don’t have any cars, which is a safety point as well as just an aesthetically kind of superior environment. But it drives your fitness. I mean, it keeps you in shape. There’s a flow state that you can get into when you’re on a mountain on a mountain bike riding through a forest and sort of navigating the trail and reading the contours. And you know, it’s almost a meditative state.
If you’re in the office and maybe having a tough day or need to just get out and clear the head, or if you’re going to have a big day and you need to be starting fresh and on the right foot or if you just need to wind down at the end of the day — very few things even approach the benefits that mountain biking provides to me personally. And look, the woods are, in my view, one of the best places to ride because you do get kind of, you know, lost in the woods and it’s good for the soul, good for the heart. It’s a healthy thing to do. As long as you don’t crash.
The benefits of being born wealthy are fairly obvious. But what about the responsibilities?
I think people probably answer this question differently and probably think about it differently. But I think we all collectively have a responsibility to each other and to society to try and live together and leave the world a little better place. People’s interests and capacity will have an impact on exactly what that looks like for them. But for me, I do feel a responsibility to give back. I do feel a responsibility to be active and involved and engaged. And that’s everything from showing up in the voting booth to trying to, you know, make the hometown that I grew up in a better place to live, as well as a lot of other things.
It’s not necessarily really different from what a lot of other people feel, which is a sense of duty and societal obligation. It just maybe looks a little different. I think being a Boy Scout leader is as big a deal as making a big grant to your university. Everybody gives back in different ways and in different areas, so I just hope that I’m doing my part. And if anybody thinks that I’m not, then I’d love to hear from you, and if anybody thinks that I am, that’s good too. I think everybody’s got a responsibility to sort of stand up and try to do the right thing and try to help other folks and try to make the world a better place. And I’ve got a wonderful and significant opportunity to do that. And I feel a responsibility to do that. But I also don’t know that it’s specific or unique to me. I think we all have a little bit of that.
Mistakes, like mountain bike crashes, can be the best teachers. What’s the biggest career mistake you’ve ever made?
You know, I don’t really have a lot of regrets. And I’m sure I’ve made a lot of mistakes. But like you said, you learn from your mistakes, and they often lead you to a place or an insight or, or something happening that wouldn’t otherwise have done so.
I guess maybe one example would be — you know, when I was about 30, I wanted to work at Walmart, but I also wanted to continue living in the U.K. And so I ended up taking a job there that was kind of outside the corporate office. It was located in the right spot because I was working on mergers and acquisitions in Europe, the Middle East and Africa and I was based in London. But I was in a very small office, and I was kind of too far outside of the flow of the business to have the kind of impact I wanted to have. And that probably led to me leaving Walmart. But the silver lining there — and actually, if I had to do it again, I think I’d probably do it the same way — but I left Walmart to start Game Composites. And I learned a tremendous amount. I got to travel to some amazing places and visit some amazing companies and also visit almost all of our international offices in the role. But when I left Walmart, I started Game and I ran that as CEO for about two and a half, maybe three years after that. Then we moved to Bentonville. And then I ended up going on the Walmart board. And certainly my time at Walmart has been incredibly instrumental in being able to serve on the Walmart board. But I’ll tell you, my time at Game Composites — having a startup experience, a CEO experience of a startup, going to the bank, opening the bank account, hiring, firing, all that kind of stuff that I learned at Game how to do — has been just as valuable.
So if the mistake was, you know, not moving back to Bentonville sooner and entrenching myself within the Walmart offices, that sort of led to an outcome that I’m totally comfortable with and excited about. And I’m not sure that I would have changed it. I try to look at all mistakes like that, to be honest, because that’s really where you’re going to learn. That’s really where you’re gonna set yourself up to kind of be who you’re going to be. But I’m sure I make mistakes every day, but hopefully you can learn enough from to where you make a few less or you don’t make the same mistake tomorrow. And then you can set yourself up for success in the future.
Can you tell me just a little bit about the Runway Group and what it does?
RZC, which we talked about before, is sort of a part of the Runway Group. And the way I think about the Runway Group is it really is a group that exists to develop and transform northwest Arkansas. That’s a big lofty, pie-in-the-sky goal. But we within the group feel like we have the opportunity to do that by making strategic investments and working with local partners to really help the region be all that it can be. The different kinds of work that we do really span the gamut. It’s everything from hotels and restaurants to direct investments and companies, recruiting companies, working with local leaders on policy, working with local organizations on developing our infrastructure, on developing our green space, protecting green space. So there’s a real broad kind of list of activities that Runway does. But if you want to think of it in the most basic sense, we’re trying to basically deploy capital to transform and develop the region into the best place that can be. And Runway is kind of a central point for all that activity.
Is there anything you want to add that we haven’t touched on?
If I can just circle back to the Economic Recovery Task Force. I’m a pretty apolitical person, to be honest. I don’t get involved in either party’s activities. I’ve voted for Democrats; I’ve voted for Republicans. I’m not hyper-partisan. I’m not a really political person, although I think politics is very important. But I’d just say that I think the governor’s leadership during this time has been something that I’ve been impressed with. He’s been present. He’s been active. I think he’s looking at the facts. He’s listening to Arkansans, and I’ve just been impressed with his leadership. It’s been something that I’ve been watching and I see a lot of leaders around. I see a lot of state leaders around but he’s been about as on it as you could be. I don’t think anybody’s happy with where things are at, the way things are going. But the state is, from an economic point of view, I think positioned well to recover. And hopefully we can really start to see a decrease in the cases and the state on a trajectory to come out of this in a good spot. And I’m still optimistic that that could be the case.
It has been challenging, no doubt about that.
No question. It is one of the trickiest and most complex situations I’ve ever tried to understand. It’s kind of baffling, to be honest. But you’ve got some pretty good science out there, a lot more understanding of what is and what isn’t the right course of action today than even just a month ago. And I think over time we’ll actually come out of this OK. I remain optimistic about that, but we’re definitely in a tough spot as a country.
Business leaders have posed a question about why there isn’t a federal initiative, federal leadership to this pandemic. How would you respond to that? Do you think there needs to be federal leadership?
The short answer is yes.
The question is whether the leadership at the federal level is leading in a way that that’s helping us out. I don’t really want to wade too deeply into this. But my sense is that America’s an incredibly diverse place. And Arkansas is an incredibly diverse place. If you look at southeast Arkansas versus Little Rock versus Texarkana versus Bentonville, you’ve got just a tremendous diversity in terms of population densities, in terms of different kinds of environments where the virus can spread. I think trying to have a single policy at a nationwide level in a country that’s as diverse as ours, from geography to race to culture — I think that would be really hard to do.
But that being said, I think that leadership that works to depoliticize a lot of those things and leadership that works towards goals in a way that is supported by science and research would be pretty darn helpful. Some people say, I’m sure, that we’re getting that, and some people say, of course, that we aren’t. But I think that in a situation like this, the more we can depoliticize what’s the right thing to do and the more we can empower people to do it, given their circumstances, the better off we’re going to be.
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