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.