Wal*Mart

Tom Peters/Saturday/2August2003/Bentonville

12 in 20*

*A dozen ideas in twenty minutes

1. Beating the odds is no walk in

the park!

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive

in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the market

by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.

S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were

alive in ’97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

2. Practice the Art of Strategic

Forgetfulness.

Forget>“Learn”

“The problem is never how to get new, innovative

thoughts into your mind,

but how to get the old ones out.”

Dee Hock

The [New] Ge Way

DYB.com**Destroy Your Business dot com

3. There will be a “next Wal*Mart.”

“The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no,

the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends

him on the spot.”

Mark Twain

4. I know who the CEO after next

will be!

Audie Murphy was the most decorated soldier in WWII.

He won every medal we had to offer, plus 5 presented by Belgium and France. There was one common medal he

never won …

… the Good Conduct medal.

Herman Melville on JPJ: “intrepid, unprincipled,

reckless, predatory, with boundless ambition,

civilized in externals but a savage at heart.” —from Evan

Thomas, John Paul Jones: Sailor, Hero, Father of the American Navy

Huh?

“Quiet, workmanlike, stoic leaders bring about the big

transformations.”--JC

Pastels?

T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. FranklinA. Lincoln/U. S. Grant/W. T. Sherman

TR/FDR/LBJ/RR/JFKM.L. King

C. de GaulleM. Gandhi

W. ChurchillM. Thatcher

PicassoMozart

Copernicus/Newton/EinsteinJ. Welch/L. Gerstner/L. Ellison/B. Gates/S. Ballmer/S. Jobs/

S. McNealyA. Carnegie/J. P. Morgan/H. Ford/J.D. Rockefeller/T. A. Edison

“Dream as if you’ll live

forever. Live as if you’ll die today.”

—James Dean

The greatest dangerfor most of us

is not that our aim istoo high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

5. Push diversity!

The Cracked Ones Let in the Light

“Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found

among non-conformists, dissenters and rebels.”

David Ogilvy

“Are there enough weird people in

the lab these days?”V. Chmn., pharmaceutical house, to a lab director (06.01)

Deviants, Inc. “Deviance tells the story of every mass

market ever created. What starts out weird and dangerous

becomes America’s next big corporate payday. So are you looking for the next mass market idea? It’s out there … way

out there.”

Source: Ryan Matthews & Watts Wacker, Fast Company (03.02)

Saviors-in-Waiting

Disgruntled CustomersOff-the-Scope Competitors

Rogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

6. Talent!

Message: Some people are better than other

people. Some people are a helluva lot better than other

people.

“We believe companies can increase their market cap 50 percent in 3 years. Steve

Macadam at Georgia-Pacific changed 20 of his 40 box plant managers to put

more talented, higher paid managers in charge. He increased profitability from $25 million to $80 million

in 2 years.”

Ed Michaels, War for Talent

Talent’s Rules

1. Talent = 25/8/53 2. Some people are better than other people. Some people are a helluva lot better than other people3. Think “Roster”4. Think “V.C.”5. Talent = Brand6. Talent is what leaders do.

MantraM3

Talent = Brand

6A. It’s the stores, stupid!

The stores make money.

Bentonville spends money.

6B. Women Rule!

“AS LEADERS, WOMEN RULE: New Studies find that female managers

outshine their male counterparts in almost

every measure”Title, Special Report, Business Week, 11.20.00

7. Collect data. Trust your gut.

Great “Merchants” * I have known:

Sam (Walton)Les (Wexner)

Mickey (Drexler)

*The fingertips of a safecracker.

“No great marketing decision was ever made

based on the data” —John Sculley

“HAVE MBAs KILLED OFF MARKETING? Prof Rajeev Batra says: ‘What these times call for is more creative

and breakthrough reengineering of product and service benefits, but we don’t train people to think like that.’ The way marketing is

taught across business schools is far too analytical and data-driven. ‘We’ve taken away the emphasis on creativity and big ideas that characterize real marketing breakthroughs.’ In India there is an added problem: most senior marketing jobs have been traditionally dominated by MBAs. Santosh Desai, vice

president, McCann Erickson, an MBA himself, believes in India engineer-MBAs, armed with this Lego-like approach, tend to reduce marketing into neat components. ‘This reductionist

thinking runs counter to the idea that great brands must have a core, unifying idea.’ ”—Businessworld/04Nov2002/“Why Is

Marketing Not Working?”

8. Honor the “Big Three” trends.

Women!

?????????

Home Furnishings … 94%Vacations … 92% (Adventure Travel … 70%/ $55B travel

equipment)

Houses … 91%D.I.Y. (“home projects”) … 80%

Consumer Electronics … 51% Cars … 60% (90%)

All consumer purchases … 83% Bank Account … 89%

Health Care … 80%

“War has broken out over your home-improvement dollar, and Lowe’s has

superpower Home Depot on the defensive. It’s not-so-

secret ploy: Lure women.” —Forbes.com

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

FemaleThink/ Popcorn

“Men and women don’t think the same way, don’t communicate the same

way, don’t buy for the same reasons.”

“He simply wants the transaction to take place. She’s interested in

creating a relationship. Every place women go, they make

connections.”

“Men seem like loose cannons. Men always move faster through a store’s

aisles. Men spend less time looking. They usually don’t like asking where things are.

You’ll see a man move impatiently through a store to the section he wants,

pick something up, and then, almost abruptly he’s ready to buy. For a

man, ignoring the price tag is almost a sign of virility.”

Paco Underhill, Why We Buy* (*Buy this book!)

“Women don’t buy

brands. They join them.”

EVEolution

Notes to the CEO

--Women are not a “niche”; so get this out of the “Specialty Markets” group.--The competition is starting to catch on. (E.g.: Nike, Nokia, Wachovia, Ford, Harley-Davidson, Jiffy Lube, Charles Schwab, Citigroup, Aetna.)

--If you “dip your toes in the water,” what makes you think you’ll get splashy results?--Bust through the walls of the corporate silos.--Once you get her, don’t let her slip away.--Women ARE the long run!

Source: Martha Barletta, Marketing to Women

1. Men and women are different.2. Very different.3. VERY, VERY DIFFERENT.4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common.5. Women buy lotsa stuff.6. WOMEN BUY A-L-L THE STUFF.7. Women’s Market = Opportunity No. 1.8. Men are (STILL) in charge.9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN.10. Women’s Market = Opportunity No. 1.

91% women: ADVERTISERS DON’T

UNDERSTAND US. (58% “ANNOYED.”)

Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women)

Geezers!

“Marketers attempts at reaching those over 50 have

been miserably unsuccessful. No market’s motivations and needs are so poorly understood.”—Peter

Francese, founding publisher, American Demographics

“ ‘Age Power’ will rule the 21st century, and we are woefully

unprepared.”Ken Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

2000-2010 Stats

18-44: -1%

55+: +21%(55-64: +47%)

“NOT ACTING THEIR AGE: As Baby Boomers

Zoom into Retirement, Will America Ever Be the

Same?”USN&WR Cover/06.01

50+

$7T wealth (70%)/$2T annual income50% all discretionary spending

79% own homes/40M credit card users41% new cars/48% luxury cars

$610B healthcare spending/74% prescription drugs

5% of advertising targets

Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old

Hispanics!

Duh!“We want our associate population to mirror our

customer population at every level, from the executive suite all the way to the retail floor. In the marketplace, basically what I want to do is draw a concentric circle around every one of our 2,300 stores, and I want the assortment in that store to match the ethnicity of the

neighborhood it’s in. Some neighborhoods are all Hispanic, so we can put in a full Hispanic format. That’s

what Super Saver is. All the signage is in both languages. There’s a 100 percent Spanish-speaking

staff in the store.”—Larry Johnston, CEO, Albertsons

8A. Push vendors for “Cool.”

Design Transforms even the [Biggest] Corporations!

TARGET … “the champion of America’s new design democracy” (Time) “Marketer of the Year 2000”

(Advertising Age)

Use your peerless muscle to push vendors this decade on

Design and Cool as hard as you did last decade on price. You can have your cake and eat it

too!

9. CHANGE EVERYTHING.

Remember your roots.

“Uncertainty is the only thing to be sure of. –Anthony Muh,head of investment in Asia, Citigroup Asset Management

“If you don’t like change, you’re going to like

irrelevance even less.” —General Eric Shinseki, Chief of Staff,

U. S. Army

Mr. Sam’s Rules

Commit.Share.

Motivate.Communicate.

Appreciate.Celebrate.

Listen.Exceed expectations.

Control expenses.Swim upstream.

10. “Rule #1” Rules!

DG to TP: “Sam is not afraid

to fail.” **NASA failing #1, from the shuttle disaster report (July 2003):

“fear of retribution by lower-level employees.”

Characteristics of the “Also rans”*

“Minimize risk”“Respect the chain of

command”“Support the boss”

“Make budget”*Fortune, article on “Most Admired Global Corporations”

Joe J. Jones Joe J. Jones 1942 – 2002 1942 – 2002

HE WOULDA DONE SOME HE WOULDA DONE SOME

REALLY COOL STUFF REALLY COOL STUFF

BUT …BUT …

HIS BOSS WOULDN’T LET HIM! HIS BOSS WOULDN’T LET HIM!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

“Fail faster. Succeed sooner.”

David Kelley/IDEO

Fail. Forward. Fast. –High-tech Exec

“Nobody gives you power. You just take it.”—Roseanne

11. MESSAGE: Wal*Mart 2008/2013 will bear little resemblance

to Wal*Mart 2003.

It is the foremost task—and responsibility—of our generation to

re-imagine our enterprises, private and public —from the Foreword,

Re-imagine: Business Excellence in a Disruptive Age

12. The answer lies within (you).

“I overcame every single one of my personal shortcomings by the sheer passion I brought to my

work.”

“Don’t become too predictable.”

“Swim upstream. Go the other way. Ignore conventional wisdom.”

Source: Sam WaltonHint: All this gets much harder as you become bigger.