The Wal-Mart Blog, Weekend Edition: What Would You Ask CEO Lee Scott?

Last fall, addressing a conference of American magazine editors in Puerto Rico, Scott finished his speech with a little story. He said Wal-Mart staff members who travel on business for the company -- literally thousands are on the road all week, Monday to Thursday -- are asked to take the pens from their hotel rooms and bring them back to the home office, to use as office supplies. Which means that each week, in Fairfield Inns and Hampton Inns and Hilton Garden Suites, Wal-Mart staffers pocket the ballpoint stick pins with the hotel logos on them, and carry them back to the home office in Bentonville.

The moment is revealing for two reasons -- one intended by Lee Scott, and one unintended. First, of course, that is one heck of a frugal company. They ask their employees to systematically collect the free pens from hotels and use them for work. Wal-Mart could easily be harvesting 200 dozen free pens a week -- 125,000 pens a year, or more. The company might be saving $10,000 or more on the cost of office pens. Now, $10,000 is real money, but clearly for Wal-Mart, it's as much about instilling a tight-fisted, no-waste mindset in employees as about free pens.

But the thing Lee Scott doesn't understand is how weird a practice that is. When I tell that story at public events, people are amused and appalled. Most of us would happily offer a friend -- or a visiting Wal-Mart executive -- a pen. But can't the largest, most powerful company in history go ahead and splurge for its own office supplies? Indeed, shouldn't Wal-Mart buy its own pens? And heck, if you employ 1.3 million Americans, I'm betting the nation's pen makers will give you a good price.

Lee Scott not only doesn't understand how strange that practice would strike most Americans -- he's proud of it, proud enough not only to include the anecdote in a speech, but to include it in a speech to a room full of magazine executives.

Lee Scott is struggling -- with great energy, and I hope great sincerity -- to move Wal-Mart into a new phase of its corporate life. He is himself steeped in the Wal-Mart culture, so steeped that I wonder how much progress he will be able to make.

We all need to hope that Lee Scott is successful in making Wal-Mart more responsive, and more socially aware. Wal-Mart's impact is so great, that if the company starts doing a better job with everything from employees to the environment, we'll all benefit, both as customers and citizens.

In the dozens of questions I've been asked about Wal-Mart as I've traveled the country the last six weeks talking about the company, the most arresting came from someone at a reading of The Wal-Mart Effect at the great Washington, DC, bookstore Politics & Prose.

A woman stepped to the microphone and said, "You've spent two years researching Wal-Mart. You've written a book. If you could sit down alone with Wal-Mart CEO Lee Scott, and ask one question, or give one piece of advice, what would that be?"

I'd like nothing better than to have a conversation with Lee Scott. Indeed, several times during the course of reporting my book, I sent detailed requests to Wal-Mart's PR staff seeking the opportunity to talk to current Wal-Mart execs and managers about both the company's brilliant performance as a retailer and a business, and about all of the unintended, and often negative, consequences from that performance.

The answer was always, "No thanks."

But what if I could ask just one question of CEO Lee Scott, or give one piece of advice? What would that be?

Wal-Mart's U.S. employee turnover is 50 percent. That means that 650,000 Wal-Mart employees quit in the U.S. every year -- Wal-Mart needs to hire 12,000 employees a week just to keep its current stores staffed -- 12,000 people a week! You could run a good midsize company with one week's hiring from Wal-Mart.

That kind of turnover is incredibly corrosive, and it's also incredibly expensive. Hiring that many employees costs Wal-Mart hundreds of millions of dollars a year, perhaps billions. It also means that in any given store, at any given moment, the customers know more about the place than the staff. It's an employment strategy that assumes that being an experienced Wal-Mart clerk really adds no value to Wal-Mart -- someone with a month's experience does the job as well as someone with 3 years' experience.

Why not move aggressively to reduce the turnover, Mr. Scott? That's what I'd ask. Cut your hiring costs, and re-invest the money in slightly better salaries, more accessible benefits, and a campaign to make the stores themselves more pleasant places to work, in part, perhaps, by staffing them better. Cut turnover, cut hiring costs -- and build back a culture in which the staff of the stores actually help customers shop (and thereby help Wal-Mart sell merchandise). That's what Sam Walton intended the stores to be, 40 years ago.

If I could ask a second question, I'd ask about those pens.

What would you ask Lee Scott? Post your questions below. Shoot for questions that are meaningful, rather than polemical. There is much we don't know about Wal-Mart, that it is important to know.

Fast Company senior writer Charles Fishman, who has been with the magazine since Issue #1, is the author of a bestselling book about Wal-Mart, The Wal-Mart Effect, which grew out of a story he wrote for Fast Company called, "The Wal-Mart You Don't Know." (A chapter of the book was excerpted in Fast Company's January/February issue, "The Man Who Said No to Wal-Mart.")

We've asked Charles Fishman to guest-host the Fast Company blog this week, to do a series of postings on the ways Wal-Mart is talking about changing its business; to look at how seriously we should take those changes; to consider their possible wider impact, and Wal-Mart's chances for success.

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45 Comments

  • SudiNim

    So the moral of the story is if you work at a hotel and someone from Walmart comes in, watch your silverware?  Last time I checked that's called "theft". Since it's organized by their corporate offices and it's an estimated $10,000 a year that makes it "organized crime and grand larceny".

  • cjwillett

    i have invented things that could save lives and homes, all over our country, but cant get grants or funding for any of it.does walmart care? as they say they are about the people! are they for peoples lives or their walets,i would even give walmart the patent rights, just to save americans lives i,ll let someone else worry about saving their walets.

  • Bob Dole

    The Winchester,Tn Walmart should fire Chris Mitchell because He has a bad temper and is a VERY evil person.

  • youni

    i try to talk to the workers of walmart,i was very polite,i know iam not a native speaker and cause i talk to him on the phone,iam afraid that he cannot understand me,so ,i try to speak as clearly as i could ,but finally,the guy (i thought he is the manager)replied me very rude--i cannot understand u !i just want to ask something about the vacuum cleaner!i used to thought that walmart is a big company ,their workers must be very polite and patient,but tell u guys,we are wrong---they like hooligans when they talk to customers who are not native speakers.
    IS THAT DISCRIMINATION?

  • Chiris Mitchell Sr Cowan Tn

    My Son Chris is an Assistant Manager at the Winchester Tennessee Walmart. He earns $ 33000.00 a year. Chirs Thinks He is worth $ 40.000 a year so please start paying him that NOW.

  • David Johnson

    I was in Winchester, Tn in 1973 and I dont remember ever seeing a Walmart there. Went to Hammers and found everything I needed.

  • Howard Nagle

    I know a district manager from Winchester, Tennessee Richard Lockmiller who lives in a $700.000 home & $ 100.000 in cars and trucks, + has a wife, 5 kids, 20 grandkids, and two girlfriends. He must earn $140.000 a year or more.
    I guss Walmart pays management very well but not hourly employees. Joy a CSM at the Winchester, Tennessee store is not a friendly person to the customers.

  • Janice Bonser

    My name is Janice Bonser and I got 2 gold fish from Walmart. One dime each. I take good care of my fish and I notice that they seem to be inteligent and responsive. After getting used to my well fed pet fish, I revisited Walmart to look at their gold fish and noticed they seemed very thin. Upon further inspection I discovered many dead gold fish stuck to the 4 different filters. I called for the person in charge of the pet department. Dawn apologized to my horrified face and told me the reason the fish were so thin was because they were new arrivials. Then she scraped all the dead fish off the filters. I came back a couple of days later to find far fewer fish in this particular tank but they were all still very thin. At least there were no dead ones stuck to the filters. Today the tank was a little more crowed and there were some dead fish stuck to the filters and all the fish looked very hungry. Even so only a few were actully eating the dead fish. The others while seeming to be starving themselves ignored the dead gold fish as food.

  • shane cotter

    I was wondering how can Walmart say they are an equal oppertunity employer and support gay marriage. Isn't that not only favoring one side but also supporting something that Sam would not have even thought about supporting? Isn't giving 50% of online sales to gay marrage supporters showing that your biased? Isn,t giving gay venders priority a little discrimative? the way I see it you have taken the first of many steps towards being a discrimative employer.

  • lorri p

    in our store we dont have enough associates,merchandise managers price changes,work freight,check because there isint enough cashiers,we get behind in what were doing because we dont have enough in stock people or there not trained right,not consumable,not enough over nite people,we have alot put all of us we get excuse after excuse pay roll,theft well if we had associates to fill the floor payroll would be up as a store we are all stressed,morall is down 70% turnover assistants being asses to us the things they get away with saying "a female ms was told a man should be running garden center not a woman" he said this to her !there was a rumor for a callin day,we need help or the store will fail or is this the way wal-mart is becoming ? they told us bad attudes wont be tolerated it should start at the top not fake how it really is. is this the wal-mart way ? would sam approve? my store is 5398

  • M. Johnson

    Good Job there Mr. 50 yr old, as you were hired before the big splits!

    I, unfortunately, am a 20 year assoc, and missed that "double your profit sharing every year" phase, although I did make it in time for the "stay till 2am every Christmas Eve, and be back the day after at 4AM group!

    I would also address the turnover rate at the stores, but not in the manners listed above, because i KNOW why they want the store filled with hormone-raging-pot-smoking-zit-picking-call-in-because-of-hangovers teenagers....

    THEY'RE CHEAP!!

    The whole of the company now, seems to be pushing out us 'old-timers'. After spending half my life with the company, and being a real "Sam's Babe", I now find myself unable to climb any company ladders, my time & 1/2 Sundays have been taken away from me, my % increases annually based on performances, have been reduced to a flat rate, and everytime minimum wage is raised, my salary decreases, as they don't keep it proportional. Because Walmart does not recognize senority, our schedules start to include 2pm to 11pm's with 7am's the next morning...the faster they want you gone, the worse your schedule becomes.(They do have their ways of forcing you out, predominately by ruining any family life you might want to have)

    In our store, one long time assoc. tried to get a 'regular schedule'...not all day hours, just 'set' hours, so that she could care more effectively for her dying husband. This would have also made it easier, for hospice to schedule time to help relieve her in this effort.She asked this of our managment team, just for the duration of his life.(two months)

    She was refused the 'set' schedule. (I do appreciate the fact the Home Office still recognizes 'bereavement time', as I'm sure that had they not, she would have been schedule to work the day of her husbands funeral, and then fired for not having a doctor's excuse for not being there.) I think if I was her, I would have quit then, but it seems that she stills has to eat.

    After 20 years of floor management work, no accidents, no write-ups...I am now the major expense the company is looking to cut.

    I have no retirement to fall back on, and more and more I see the positions held in our company by the long time associates, the ones raised by Sam, who make it a point to know their business, know their customers, and LIVE THE LIFE preached to us by him....their positions are now being 'eliminated' with them given options to do the same job, at less wage, or quit.

    This would almost be an easier pill to swallow, knowing how we have to keep 'overhead effective' in order to stay viable in the future...if Lee Scott wasnt posting 5 times the salary as David Glass did...If Tom Coughlin hadn't been ripping us off so bad (and you know SOMEONE knew that was going on well before he was charged) and if we didnt pay 6 MILLION IN SEVERENCE to upper mngmt who have been fired for embezzlement!

    I know we have to be 'overhead conscience' Mr Walmart!! but my kids are eligible for Medicaid! Lets start by lopping off at the top, and finish by taking care of the people who got this company where it is today. Do not repay us for our blood, sweat,tears, and time....by showing us the 'open door'

    Your customers love and trust us, we care for the store and those customers, we're there everyday, still bustin' ass...and working circles around these kids, who seem to use this opportunity more as a social dating service, than as employment.

    You want the customers to keep coming back? Ask THEM about the service they receive! Look at Home Depot! Look at our history...and then come back and start taking care of the ones who took care of you!

    A Very Disappointed Old Timer.

  • Shelby Tackett

    Credit has to go to the low prices and small town convience that walmart provides. Being the "Top Dog" at walmart was not chosen by a lottery or one with top college credentials,but a chosen one that possesses small or large town mentality where a penny saved is very important to all especially those on set incomes. If you need any more pens WM, I will get them headed toward Bentonville. Just see it big and keep it simple.

  • deananash

    Note to moderator:

    Why haven't you posted my comments? The article was about 'asking Lee Scott one question'. Well, I did, and furthermore, he answered. That's not only appropriate, but interesting, as far as comments go.

  • J. M. Johnston

    Walmart is a great American success story. But,
    I would like to ask Lee Scott, how he thinks he
    is worth the 23 million dollars, he was paid from
    2000-2003, when all he has ever delivered to the
    shareholders are negative returns.

  • Mark

    As an economist, I avoided Wal-Mart for "killing" the mom-and-pop stores. As a cook, I avoided Wal-Mart because of their poor quality produce. As a customer service manager, I avoided Wal-Mart because their Associates were rarely helpful and the pallets of product clogged the aisles at 2 AM. As an investor, I quietly lamented the fact that my mutual funds invariably invested in Wal-Mart.

    As a world citizen, I'm giving Wal-Mart a second chance. Read Lee Scott's "Twenty'First Century Leadership" speech from 10/24/2005, especially regarding his environmental goals. (http://walmartstores.com/Files... It reads:
    "Our environmental goals at Wal-Mart are simple and straightforward:
    1. To be supplied 100 percent by renewable energy.
    2. To create zero waste.
    3. To sell products that sustain our resources and environment."

    I have been involved in energy efficiency and sustainability building design for 30 years. The U.S. consumes over 25% of the world's annual production of energy resources in an intensely wasteful, costly and polluting manner. This situation is untenable. This is truly a crisis of epic proportions that affects our economy, environment, and social well-being in negative ways.

    I am thrilled by Lee Scott's environmental epiphany and his commitment and actions to this point. Google "WalMart Goes Green" and read for yourself. Wal-Mart's actions can ultimately have more positive impact on energy and the environment than most any federal regulations.

    I will venture back to Wal-Mart's aisles. I will watch the progress that Lee Scott makes on the environment. And, hopefully, I will someday marvel at the manner in which Wal-Mart helped to transform businesses worldwide to operate more sustainably.

  • John

    Where's the "added value" in this? If government engaged in this form of "redistribution," economic conservatives would be outraged.

    Here's more.