The Ghost of Walmart Future

It’s Saturday morning and Mrs. N. has a project for me: assembling her new bicycle. It has arrived in an imposing brown box, and I’m attempting to interpret the instructions. Looking over the variety of nuts, bolts, screws, and connectors in a little plastic bag, I’m performing a mental inventory of the tools needed, and I’m up to seven.

I scour the bottom of the box the bike arrived in, wedged head-first in a space as wide as a cereal box, and there are no tools included. I’m thinking I could easily write an efficiency improvement report on this assembly process; however, my client (Mrs. N.) just wants her bike built. I better get it done ASAP. I’m in the man cave and realize I need to buy more hand tools. So I’m off in my car and speed to the nearest Walmart. I need to get a few other things along with the tools, and since I despise shopping, getting it done at a single destination is perfect for me: grab and go.

I like Walmart’s story, beginning in 1962, when Mr. Sam Walton opened his first store in Arkansas. And I like its business model: everything under one roof. Today the company employs 2.2 million people in 11,000 stores in 27 countries, and manages an operating revenue of $474 billion. I’ll put that into context: The total number of Walmart employees is seven—yes seven—times higher than the population of Iceland. If Walmart were a country, it would sit above Argentina in a GDP ranking.

But back to my bicycle tale. It’s Valentine’s season, and Walmart is bedecked in pink. I know where the tools are and make straight for the aisle, my mental checklist chiming: 5, 6, 8, and 10 mm Allen keys; 3/4 in. spanner; 1/4 in. socket; star-headed screwdriver. (See why I mentioned the inefficiencies of this bike assembly process?) But when I get there, I find it is poorly stocked, of any hand tool, of any description. If I want an orbital sander, I’m in luck, but there’s not even a hammer on the shelf, just labels indicating missing tools and their prices.

Not to worry, I tell myself; I’ll find an assistant to ask. But I can’t find a single employee, only confused and befuddled customers like me. This is still not an insurmountable problem, since as an Improvement Ninja, I know how to overcome it: I’ll try the bicycle aisle. I bet there’s a multi-tool there. I hope so.

“Holy macaroni!” I exclaim when I arrive. This is a loud exclamation, and now that I recall, there’s maybe no mention of macaroni, either. Again, there in the bicycle section, I find empty shelves devoid of tools and most items bicycle-related.

At this point I’m starting to wonder if Mrs. N. is playing some prank, and all of this is being recorded for a television show. I glance around for the hidden cameras before giving up and trying another store. Eventually I find all I need at my local car parts retailer, and although later I get into trouble for not buying the much-needed milk, the bike project is successfully completed.

So my local Walmart sucks. I can’t understand why on a Saturday, presumably the busiest retail day of the week, there are missing items and barren shelves. Mrs. N. doesn’t like shopping there because she finds the quality of the fresh fruit and vegetables below her standards. I agree with her that you do have to wait an eon to be served by a stressed employee, and the customer-returns desk is usually obscured by lines of full shopping carts waiting to be processed. Should I blame the local management for letting standards slip? Or is it something else?

I like to read the business sections of newspapers, websites, and blogs. Pondering my shopping experience, I recalled reading a Walmart manager’s whistle-blowing account, which if true, captures a 20-year downward spiral of the company and explains my recent experience there. Anyone with an appreciation of Deming’s 14 Points will read “Decades of Greed: Behind the Scenes With an Angry Walmart Manager” and check the boxes off. Although the article mainly focuses on pay and compensation, there are a few elements that, well, disturbed me. Here are a couple of sections for your review:

“This company is being managed by the quarter,” says the anonymous Walmart manager. “We have executives who have no vested interest in Walmart. All they care about is their salary and bonus. So when they make poor decisions, for example, this Christmas when they had a One Hour Guarantee for multiple items, it was a complete [financial] disaster, yet the executives praise what a big success it was.... You know what direction us managers were given to do in January? (Remember Walmart’s fiscal year ends January 31.) You guessed it: cut hours. For the poor decision made by executives at Walmart who couldn’t care less where the company is at in 10 or 20 years, we had to cut hours. Not only that, but we had to cut all expenses.

“Lee Scott [Walmart’s CEO from 2000–2009] instituted a [culture] where you could not question the company’s direction or offer critical feedback to the leadership. Years ago on our company intranet site, he had something I believe was called ‘Ask Lee.’ It was basically a place you could ask him a question, and he would respond. I remember a store manager asked Scott why Walmart didn’t offer its store associates a pension program so they could have the ability to retire. Scott blasted this manager for asking this question, and I was quite surprised that he even allowed this example to be posted. Nonetheless, ‘Ask Lee’ was eliminated, and I wouldn’t be surprised if the store manager was, too. This mentality extends all the way down to the lowest level of the company.”

Judging from what I read in that article, someone at Walmart’s head office would benefit from an understanding of quality concepts in business. The writing is on the wall for the company, and news items like that one continue to strongly hint that things need to change, drastically. Trade union members march in protest, communities are stopping developments of Walmart superstores in their neighborhoods, and the company’s sales growth remains poor.

As consumers, suppliers, and employees, should we sit on the sideline and watch the fire burn the building down, or should we do something about it? I have absolutely no influence in Walmart’s transformation. None at all. But I do have the power to spend money where I choose, and spending it at a company’s competitor is a great persuader. For my part, I’m taking my money elsewhere and getting better service and products as a result. And if I am doing this, millions of other customers must be, too.

But do I simply leave it there? Shoud I just take my money to the “other” store, or can I make suggestions? Granted, I don’t have access to the “Ask Lee” portal; however, I do have this column that you are now reading. You or I can make recommendations for change, and these are mine:
1. All senior Walmart executives and managers should get a good dose of quality training. The fear emanating from the manager’s account doesn’t bode well for the company’s long-term sustainability. If this doesn’t change, Sam Walton’s story of success will be memorialized by empty and abandoned superstores as employees and customers go elsewhere.
2. Transform the business into something that will drive customers in, not away. If radical transformation is necessary, then I think Walmart should go in a different direction: It should think smaller, and focus on higher-quality, premium products.
3. I would like to see small businesses run the store’s departments. Imagine an artisan bread maker and a handmade greetings-card producer having the benefits of reduced overhead in an existing building, and offering high-quality products, sourced locally, alongside low-cost alternatives. Give customers that personal touch, products made with pride by a talented neighbor, something you’d want to buy again or recommend to others. All of this is not currently an option at my local Walmart, although easily found elsewhere in my town.
4.  Invest in 3D printer technology, and make it another reason to visit the store. Granted, the technology is still a work in progress, but I foresee a time, and not far off, when I will be able to walk into a store and get Mrs. N.’s bicycle printed while I wait. The efficiency of no stock to hold, no shelves to fill, or no devaluation from theft would increase profits. Customers could view a catalogue and select from limitless options, and it would be made for them there and then.

I recognize that I don’t work in the retail sector, and my ideas may never be realized. It’s easy enough for me to sit in my comfortable world and observe poor quality, but can you? Are your customers or employees leaving you? Are you worried about your business, your job, your future? I believe that changing the system by improving customers’ experience of a product or service can ensure a business’s survival.

Looking back and saying, “If only I had done it differently” is a sad statement to make. We should all learn from the mistakes or errors of others; it’s a lot less painful than experiencing it ourselves. Walmart, like any other company, must learn from the mistakes of others and feel the pain of its own, otherwise its survival won’t be guaranteed. Like many others it will end up as just another name on a very long list of defunct retailers.

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