walmart beijing (Photo credit: galaygobi)
Gawker ran a letter from a Wal-Mart manager lately, well probably, it’s anonymous, but it fits fairly well with what one can see of the corporation. In fact, he sounds like he is a pretty good manager, doing his best to take care of his people and the corporation as well. That’s never easy. The article is here, and recommended, Decades of Greed: Behind the Scenes With An Angry Walmart Manager.
There is one part though that i want to quote and expand on a bit.
This company is being managed by the quarter. 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. This was a complete [financial] disaster but yet the executive 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 31st. You guess it, cut hours. For the poor decision made by executives at Walmart who could care less where the company is at in 10 or 20 years, we had to cut hours. Not only that we had to cut all expenses. Home office put a hold on all our ordering of supplies and try explaining to customers you don’t have toilet paper for the rest rooms. We had to cut all our part-time associates from 32 hours to 25.5 hours. All our full-time associates had their hours cut too. In addition we had to call all the people we had scheduled for orientation and tell them we couldn’t hire them. Imagine you were told to start Walmart on Thursday but then get a call on Wednesday saying nope can’t hire you.
That managing by the quarter thing that he talks about here is endemic in American business, and long-term it is going to kill it. I’ve seen it in every Fortune 1000 business that I’ve dealt with in the last ten years or so. It forces short-term thinking and compromises the long-term health of the company, both physical plant and personnel, to achieve quarterly goals.
It seemed to come about at the time that executive loyalty to their employer went away. I never saw this from the executives that started with a company just out of college and retired from there, they knew that they had to make the company work over the long-term, including repeat customers or it would all go away. That is no longer the case in large companies, it tends to be in smaller, private firms where the entire livelihood of the owner is tied up in the company. It’s one of the reasons that you get pretty good customer service from local companies.
Now do understand, Wal-Mart has problems not of its making. And yes, it changed greatly after Sam Walton died. But Wal-mart add little value to its products, it is essentially a marketing company, and it chosen market is disposable, low-cost items. My guess is that it’s return on investment is quite low. But the thing is, it’s overhead is not all that low. Almost anything I can get from Wal-Mart today, I can have from Amazon tomorrow, usually for less, because they don’t have to maintain the retail store and it’s associates.
The Wal-Mart model goes back through K-Mart to Sears and the other department stores, as well as the higher end stores, the Marshall Fields, and the Strawbridge and Clothiers of the world. Before that, out here we ordered from the wish books of Sears and Roebuck and Montgomery Ward.
Somebody yesterday said that the mall did its best to turn shopping into a spiritual experience, and to an extent I think that is true, but it is at best a very short-term pseudo-spiritual experience. And not really all that fulfilling, because we do not live by material thing alone, and like the Beatles told us, “Money can’t buy you love” and neither can a new wardrobe.
America still knows how to do things better than most, at worst. But we are hurting ourselves very badly by looking only 90 days ahead, I don’t really know how we are going to fix it but, we had better.