Bigger, Better, Faster

Then again, back when Wal-Mart was one-tenth its current size, the idea of reaching a quarter of a trillion dollars in revenue seemed equally preposterous. In 1991, Jerry Porras and I wrote about Sam Walton's audacious goal in 1977 to reach $1 billion and about his audacious goal in 1990 to double the number of stores by 2000. We thought those were audacious goals -- but then a Wal-Mart director reprimanded us for omitting the other part of the goal: to reach $125 billion, also by 2000. At the time, no company in history had attained that level of sales. "If someone thought [Walton's] original goal in 1977 was audacious," wrote the director, "he or she must be frightened by the present target."

We laughed. At the time, Wal-Mart had about $30 billion in revenue, and we doubted whether it could continue at the same pace -- especially given the fact that Walton had passed the company to a leader who had seemingly undergone a charisma bypass. But under CEO David Glass, Wal-Mart not only reached its $125 billion goal, but it did so two years early.

I don't want to argue whether Wal-Mart will become the first $1 trillion company, or even whether this would be good or bad for society. (There are strong considerations on both sides of that question.) My point is that Wal-Mart teaches us valuable lessons. Not only does the company's story dispel the myth that size is necessarily at odds with speed, but it also illustrates a few of the timeless principles that make a company fast -- and great -- in the first place.

Greatness Is Cumulative.

Sam Walton began with a single dime store in 1945 and did not open his second store for seven years. Seven years! Twenty-five years later, Wal-Mart had only 38 stores. Today, Wal-Mart has about 4,000 stores, building up to that number through a process that has been slow and steady. Albert Einstein once quipped that the greatest mathematical discovery of all time is compound interest. That is the Wal-Mart story. Walton began with $72,000 in annual revenue, grew it at 29% per year for three decades, and then accelerated from there. In recent years, the company has settled into 16% per year average growth -- but off a much, much larger base. That kind of cumulative growth achieved over seven decades turns a $72,000 dime store into a $1 trillion corporation.

You achieve greatness, it turns out, in much the same way that you turn a giant, heavy flywheel: It takes a huge amount of effort to get the thing moving from one turn to two, from two to four, from four to eight. But if you keep pushing in a consistent direction, you'll eventually hit a hundred, then a thousand, then a million RPMs. When you combine a consistent direction with substantial speed, you achieve something greater than either of those elements alone: momentum.

Consistency Enables Change.

The key to change is first to understand what not to change and then to feel free to change everything else. A key factor to Wal-Mart's trajectory is that it has never changed its DNA. Central to this set of core traits is a fanatical adherence to a deeply democratic idea: Wal-Mart exists to enable people of average means to buy more of the same things previously available only to rich folks. The company's whole model of using its power to extract lower prices from suppliers and then passing those savings along to customers derives from that core principle. Wal-Mart has been willing to try all sorts of new things -- from creating supersized grocery stores to selling cars. The company keeps what works and gets rid of what doesn't but always remains guided by its core traits, which have not changed in more than 50 years.

A Vibrant Culture Is Productively Neurotic.

All great companies have cultures that are so tight, they're almost cultlike: Those people who do not share the company's core values find themselves surrounded by corporate antibodies and ejected like a virus. (It is no accident that outsiders refer to Wal-Mart people as "Walmartians.") But effective culture is not just about rock and roll, clanging cowbells, and dancing chickens. It is also about discipline -- disciplined people who engage in disciplined thought and who take disciplined action. And the ultimate form of discipline is this: Never think of your company as great, no matter how successful it becomes. Instead, always stay irrationally worried that it is never really measuring up to its potential. A senior Wal-Mart executive told me, "We're nearly a quarter of a trillion dollars in revenue, and we're still worried about our future. We're the world's largest company with the world's largest inferiority complex."

It's a statement that Sam Walton would have instinctively understood. Munching a burger one day at a diner near Wal-Mart's headquarters in Bentonville, Arkansas, Walton pointed to a man over in another booth. "That's Joe. I really admire Joe," Walton said to a colleague of mine, who witnessed the moment. "He used to be a truck driver and then started his own business raising chickens. Today, he's really successful, and I'd like to learn from him." Walton -- by then worth well over $8 billion -- finished his burger, ambled out to his beat-up old pickup truck, and returned to the pedestrian task of building his chain of discount stores.

Jim Collins is author of Good to Great and coauthor of Built to Last. He is a self-employed professor, operating out of his management- research laboratory in Boulder, Colorado. Learn more about Collins's work on the Web (www.jimcollins.com).