Made In America
9780553562835
Sam Walton and John Huey
Notes
Our money was made by controlling expenses…payroll is one of the most important parts of overhead, and overhead is one of the most crucial things you have to fight to maintain your profit margin…Control your expenses better than your competition. This is where you can always find the competitive advantage.
“Hi, I’m Sam Walton from Bentonville, Arkansas. We’ve got a few stores out there, and I’d like to visit with Mr. So-and-So”—whoever the head of the company was—“about his business.”
Each store had to be within a day’s drive of a distribution center. So we would go as far as we could from a warehouse and put in a store. Then we would fill in the map of that territory, state by state, county seat by county seat, until we had saturated that market area.
So my role has been to pick good people and give them the maximum authority and responsibility…you’ve got to give folks responsibility, you’ve got to trust them, and then you’ve got to check on them…one simple thing that puts it all together: appreciation. All of us like praise…The bigger we get as a company, the more important it becomes for us to shift responsibility and authority toward the front lines.
Except for reading my numbers on Saturday morning and going to our regular meetings, I don’t have much of a routine for anything else. I always carry my little tape recorder on trips, to record ideas that come up in my conversations with the associates. I usually have my yellow legal pad with me, with a list of ten or fifteen things we need to be working on as a company. My list drives the executives around here crazy, but it’s probably one of my more important contributions.
Our principles:
- keeping our costs down
- teaching our associates to take care of our customers
- frankly, just working our tails off
At any company, the time comes when some people need to move along, even if they’ve made strong contributions.
I would get in my old Tri-Pacer and fly to those stores once a week to find out what was selling and what wasn’t, what the competition was up to, what kind of job our managers were doing, what the stores were looking like, what the customers had on their minds.
What we guard against around here is people saying, ‘Let’s think about it.’ We make a decision. Then we act on it.
I tried to operate on a 2 percent general office expense structure. In other words, 2 percent of sales should have been enough to carry our buying office, our general office expense, my salary, Bud’s salary—and after we started adding district managers or any other officers—their salaries too.