Ten Steps to Turn Around Wal-Mart, Part 2

[Editor’s note: This column was published in two parts. Click here for Adam Hanft's first five suggestions for Wal-Mart.]

6. Expand your vendor base. It’s no secret that it can be excruciatingly difficult for small and mid-size companies to do business with you, because you require all sorts of sophisticated enterprise software and other technology solutions. (The joke is that only elephants can sleep with elephants). That’s an essential part of your business model; by getting the giants like P&G and Coca-Cola to connect their systems to yours, you monitor sales trends, assure faster delivery, reduce inventory, and manage your other marvels of efficiency.

But relax those standards for entrepreneurs. Actively seek out small, innovative companies with exciting new products, and help them grow. It’s good business, first of all. Consumers are ready to be excited and are increasingly bored by the Sameness at the Shelf. At the same time, they want to see you support these new businesses. (With the explosion of entrepreneurship in America, most everyone is a few degrees of separation from someone who has something to sell you). Help these new vendors get stronger – either by extending credit to help them secure the inventory they need to work with you, or by starting a “new vendor” program that introduces them to partners like Microsoft, Oracle, and SAP with whom you have deep relationships.

7. Stop treating your employees like commodities. No one thinks of Wal-Mart as a place to get a first or a second job, stay on, and build a career. You’ve got to change that. You need to create a culture that is as obsessed with finding, cultivating and promoting talent as it is with getting Frito-Lay to sell you Doritos at a lower price this year than last. Demonstrate your commitment to getting people out of the minimum wage sinkhole as quickly as possible. You’ve got great management systems. Use them to identify the most promising women and men in your vast organization. Increase your investment in training by a factor of ten. Become known as an employer that is committed to discovering talent and creating absolutely amazing personal and career success stories. The effect on morale will be amazing, and that will spread like emotional wildfire to the consumers they deal with.

You’ve got 1.6 million people working for you, a bigger community than Boston or San Francisco. It’s an extraordinary talent pool, but you’re treating them like high-turnover losers instead of assets. No wonder the media portrays them as wretched slaves, and you as a feudal oppressor.

You should also encourage your employees in entrepreneurship. Hold regular seminars and advice on your Website for starting a business. Pride yourself on how many employees start a company each year. (It’s great PR to lose good people for the right reason). Even invest in their businesses, give them micro-loans to get launched. After all, you don’t want the entire retail landscape to be Wal-Mart and only Wal-Mart. Stand for, and support, a diverse retail ecosystem.

8. Open up your business. Become less impenetrable. Act like you have nothing to hide. Install “factory-cams” at your captive manufacturing plants around the world, so anyone can check out the conditions 24/7 on your Website. Let management and store personnel blog. And please talk to reporters. I was being interviewed by a business reporter at a major metropolitan daily who told me that she spoke to two people in your PR department trying to get a comment on the Greenwald documentary, and each time she was referred to your Website. Yeah, that’s a way to make friends with the press.

9. Use your extended warranty marketing as a model for other new services. Consumer advocates have, for years, complained about what a rip-off these policies are. Now, you’re offering a real benefit by selling them for half the price of Circuit City and Best Buy. And you’re not hiring children in Indonesia to accomplish it. What other consumer-punishing paradigms are there that you can break down?

10. Lastly, you’ve announced you’re running a big holiday TV campaign, using celebrities for the first time – names that include Garth Brooks, Queen Latifah, and Destiny’s Child. That timing really makes a lot of sense. Kill it. You can’t afford health care benefits but you can afford to pay over-priced celebrities to dance around the TV screen? Celebrity advertising has lost its luster anyway, and does anyone really believe that these chauffered millionaires actually shop at Wal-Mart? It’s not believable, and that kind of marketing deceit makes everything you say as an organization equally invalid. Instead, run advertising that shows how Wal-Mart democratizes the holiday for real people.

Taken together, initiatives like this can make you not just a feared company, and a targeted company, but an admired company. That’s something no war room – locked in counter-attack readiness – can buy you.

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4 Comments

  • Wayne

    Wal-Mart creates a love/hate relationship with its customers. You love the pricing and hate something (add your own list). But they do create value and the do create profit, which is why most companies do business. Their model may be flawed to some, but it does help every consumer who shops there get what they believe to be a fair deal. They are #1 and like champion sports teams, everyone is gunning for them.

    What we must understand is that we cannot have it both ways. We cannot have a company with rich benefits and the lowest pricing. We cannot have tremendously cost shedding logistics and unionization (name one industry where that has worked). In the end, Wal-Mart's model is their model.

  • Michael Lederman

    Are we all forgetting first and foremost Walmart is a business, their job isn't to make the world a better place or to be a shining example of utopian retail, their job is to create profits. As much profit and as fast as they can. No amount of bad publicity in the world is going to stop people from shopping where they can get quaility goods for low cost.

    If any of these ten suggestions had put profit before rosy eyed ideals then perhaps Walmart would have alreay incorporated it. As it is Walmart invests huge amounts of money and efforts into helping charites in the towns in which they have stores. I find this to be quite nice of them since it does little to promote their bottom line.

  • Diane

    Outstanding suggestions. Unfortunately they will not use them. They are more concerned about the bottom line.