You Must Give Up to Go Up

In the mid-1970s Wal-Mart was only a fraction of the size of K-mart.  K-mart was considered state-of-the-art when it came to discount retailing.  Yet Wal-Mart had something K-mart did not have, the discipline to meet every Saturday morning to report, reflect, and plan.

Wal-Mart executives were living John Maxwell’s Law of Sacrifice.  They were willing to give up their Saturday mornings, so they could go up by out-innovating and out-executing their competition.  The Saturday morning meeting was, for years, the engine that drove the Wal-Mart machine.

According to Sam Walton’s successor and former Wal-Mart CEO David Glass, “The idea of the Saturday morning meeting is very simple.  Nothing very constructive happens in the office. Everybody else had gone to a regional offices system—Sears, K-mart, everybody—but we decided to send everybody from Bentonville out to the stores Monday through Thursday and bring them back Thursday night. On Friday morning we’d have our merchandising meetings. But on Saturday morning we’d have our sales meeting for the week. And we’d have all the information from the people who had been out in the field. They’re telling us what the competitors are doing, and we’d get reports from people in the regions who had been traveling throughout the week.”

With that information in hand, Wal-Mart could move fast, said Glass. “We decided then what corrective action to take. Before noon on Saturday, the regional manager was required to call all his district managers and give them directions as to what we were going to do or change. By noon on Saturday, we had all our corrections in place. Our competitors got their sales results on Monday for the prior week. Now they’re 10 days behind, and we’ve already made corrections.”

How did the team’s discipline pay off?  In 1974 Wal-Mart had 778 stores, Sears had 851 and Kmart dominated with 1,326.  Today Wal-Mart has more than 11,000 stores with more than 2.2 million associates, $480B in revenues and more than $13B in net income.  Not bad, eh?  And what happened to Kmart and Sears?  Well, Kmart went bankrupt and merged with Sears.  Last year, Sears lost about $1.5 Billion on $13.8 Billion in revenue.

What Sam put in place was the discipline to meet every week to 1) gather customer and employee feedback, 2) measure weekly sales data, and 3) adjust the plan based on the feedback and sales data.  Sam Walton and his leaders used this discipline to out-innovate and out-execute their competition.

Has your team fully embraced the discipline it takes to out-innovate and out-execute your competition? 

You may not need to meet on Saturday mornings to reach your true potential.  However, you can bet that you need the discipline to create a cadence of plan, execute, report and reflect.  Success is hard work because you must give up to go up.

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