Good ol’ Sam Walton. During my university years, whenever I visit any book store this book will always be in the top 5 books there, if not the 1st. No matter if it’s the biggest Borders (don’t you just miss Borders?) or a tiny airport bookshop. But I always thought what could this book – one that is written by the owner of Wal-Mart – possibly teach me?
And throughout the years this book kept being mentioned by some of the brightest and most successful people as one of their main inspirations, a must read business classic, with the latest one (that I read) referred to by Jeff Bezos. So after more than a decade wondering, I finally decide to read the book. And what could it possibly teach me, someone who isn’t in the retail industry? As it turns out, quite a lot.
This book was written at the last few moments of Sam Walton’s life when he became ill, with him reminiscing about his journey in building his ultimate baby, the merchant giant Wal-Mart. And there’s so much to learn from this humble billionaire. First and foremost, there are many lessons about the business: on supply chain, logistics, accounting stuff, how to size up your competitors, how to expand, all the way to their choice of locations and addressing some of the infamous stigmas, such as the one that claim Wal-Mart kills small mom and pop stores, and provide answers that make perfect sense.
The book also highlight the way he organises the structure of Wal-Mart that benefitted the family and the employees, about the fun company culture that he establishes, how they revamp every small town’s atmosphere, how they still focus on one store at a time even when they’ve become a huge corporation, and the one thing he asks to his grand children and great-grand children NOT to do, or else he will come back and haunt them: selling their Wal-Mart stocks to finance their extravagance, that would leave the family’s controlling stake vulnerable to hostile take over.
Then there are also lessons from their failures, the most expensive mistake he ever made, the tiny details of franchise and lease contracts that can safe you or screw you, how to nurture good business relationships (even with your competitors), what NOT to do through extracting lessons from failed competitors, and most importantly for Wal-Mart’s key to success (which become the core of this book): his many, many lessons on pricing, and controlling the so-called absentee ownership.
In fact, he is not shy to share most (if not all) of his formula to success, as he believed that competition makes everyone better. For example, in describing Wal-Mart’s early strategy on pricing, which became one of the key engines of growth for his stores: “The basic discounter’s idea was to attract customers into the store by pricing these items—toothpaste, mouthwash, headache remedies, soap, shampoo—right down at cost. Those were what the early discounters called your “image” items. That’s what you pushed in your newspaper advertising—like the twenty-seven-cent Crest at Springdale—and you stacked it high in the stores to call attention to what a great deal it was. Word would get around that you had really low prices. Everything else in the store was priced low too, but it had a 30 percent margin. Health and beauty aids were priced to give away.”
Furthermore, this autobiography is also lessons about hard work from early age, and lessons on frugality where despite of his riches he still drives an old pickup truk, buys his clothes at Wal-Mart, and refuses to fly first class even though he can afford to (but then again he also owns a private jet that he flew himself, but one that he purchased only after weighting the cost of travel that would be more efficient if he flew himself).
The book is also part testimonials by his family, friends, partners and associates, even his competitors, with nice little anecdotes along the way. One of my favourite stories is when he was caught taking notes in his competitor’s store, Price Club, and how he dealt with it with such grace and humor (and responded by Price Club’s owner with equal respect and warmth).
Indeed, Sam Walton has this folksy charm and wit that makes him instantly likable, as well as a wise grandfather vibe that is reflected in the way he writes the book. It is as if he is telling about his life’s stories to his grandchildren in one delightful seating, with lessons that are also applicable to any other areas in business and in life. And so, as it turns out, you don’t need to be in the retail industry to appreciate the abundance of knowledge coming out of this book.