Sul Financial Times di ieri Lee Scott ha rilasciato un’intervista sulla situazione del più grande retailer al mondo.
E ammetto che fa effetto leggere che Wal Mart è po’ umano.
I punti saliente sono:
- rinnovare il concetto di “pile ‘em high, sell ‘em cheap” verso un approccio customer focused
- affrontare i propri punti critici, sui temi della gestione del personale diretto e di quello dei propri fornitori
- maggiore attenzione per l’ambiente

Riportiamo qui di seguito tutta l’intervista.

FINANCIAL TIMES: Wal-Mart has been seeking to improve the performance of its US supercenters and discount stores. How is that going?

LEE SCOTT: I think the US business is doing better because fundamentally the leadership team is doing a very good job across a number of areas. If you look at our marketing, it is extraordinarily effective for this particular time. “Save people money, so they can live better” with the general attitude and concerns that consumers have today, what better message to have?

I think our merchants have done a much better job, whether you talk about assorting the store for the community, the [price] roll-backs we’re doing. Working with suppliers to take costs out so the products are more affordable during a time of food inflation. They’ve done an excellent job of being more relevant.

And if you come to the store operation side, we actually have lower out-of-stocks, we have higher in-stocks. Our Wal-Mart stores are neater and cleaner than they were a year ago. Our associate engagement scores higher than they were, so the people in the stores who the consumers have face to face contact with, I think they’re doing a better job. And at same time because of the combination of merchandise and operations we actually have less dollars in inventory in the stores than we had this time last year, so you don’t have congestion in the back room. You are able to get the right products out of the shelf. You’re not trying to sell product that is marked-down because it’s over bought, you’re able to put in front of people what’s fresh and what’s relevant.

And I think it’s the combination of that team that has come together at the right time. And that’s what I say, it’s thank goodness we’re positioned this way with the economy as it is today.

FT: How much of a role have you had in backing-up Eduardo Castro-Wright, CEO of the Wal-Mart Stores (NYSE:WMT) USA division, in the pretty drastic reorganisation that he’s done?

MR SCOTT: I think the results are a reflection of the team. Eduardo has an extraordinarily strong team. Bill Simon is running store operations. Stephen Quinn is doing the marketing and John Fleming who is doing the merchandising in particular. And then Pat Curran who is doing the people side of it. That team has come together and they’re all very talented and in their case the whole is greater than the sum of the parts. They’re just working well together. They are focused not on their individual careers but in getting this business where it can be and where it should be. So I think it is the combination of all of those things.

I think Eduardo displayed tremendous courage in repositioning his division. During that period of time, we are very fortunate as a company that Sam’s Club performed extraordinarily well and international performed well which gave us the latitude to take some the hits we needed to take on the Wal-Mart US side and still be able to have record sales and record earnings.

FT: Over the past two years you yourself were getting flack from Wall Street, over a moribund share price and so on. with people suggesting that you might be under pressure. Were you under any pressure from your board during that period?

MR SCOTT: The pressure I’ve had from board is to build a company that has great values and that is consistent with culture that Sam Walton has established. And the Board has been I think very patient with us, and has recognised that during this period of time when we’ve had very little or no share growth, that we have in fact had record sales and record earnings each and every year….we’ve been able to grow. We’ve been able to sell particular stores, and we’ve been able to enter new countries such as we’re doing with India. They’ve really given us the flexibility to do this thing the right way.

FT: The Walton family is still a big part of the shareholding, and Rob Walton [son of Wal-Mart founder Sam Walton, who died in 1992, is on the board. Do you think you would have survived this period without the support of the Waltons?

MR SCOTT: I think that's a fair question and I don't know the answer to it. I do know that Rob Walton's and his family's interest in creating the right company that lasts for decades is the overwhelming focus. And you have to believe somewhere that that longer term mentality gives management more flexibility in not having to do things on a quarter to quarter basis that long term would be harmful. So I think there is a strength in having a family ownership that demands that management do the right thing for the long term.

FT: Could you tell us a little about the efforts to transform Wal-Mart on environmental sustainability record and how that came about?

MR SCOTT: Wal-Mart's senior team was thinking about our role in sustainability and what society might look back and say why didn't Wal-Mart participate, those kind of things. I was talking to Rob Walton on the phone and saying we are talking about this, we're getting ready to have some people come in and talk to us. And Rob said I've just joined the Conservation International board [a non-profit environmental group whose work includes promoting partnerships with business].

So we’ve ended up as a management team and with Rob at the same place at the same time – which isn’t unusual since we communicate and your sensitivities would be similar. Rob has been a great supporter of this effort and has encouraged the company as well as encouraging the company through his contacts as to what are the right NGOs to deal with and who can be most helpful to us.

FT: Wal-Mart was always a company that focused on getting the lowest possible price from suppliers and now you are talking about incorporating social and environmental costs into the notion of price. And that’s a big shift for your average buyer.

MR SCOTT: It would be misleading to think that everybody is at the same place in embracing sustainability…this is a large company. And so we clearly have momentum. And I think what our people have accomplished is indisputable.

But so far much of what we have done has been really pretty straight-forward. And that is eliminating or reconfiguring packaging, or the elimination of high-gloss printed labels, or recycling at store level, which this first quarter is a $10-11m switch, from a $1.4m in costs to $10m in income. It’s working with Eureka to sell a vacuum cleaner that uses 30 per cent less power. It’s selling compact fluorescent bulbs.

So we’re doing those kind of things. Will there be hard decisions in the future? I think there will be.

When it comes to sourcing and social-responsibility in sourcing, my personal belief and I think the company’s belief is that if a manufacturer in a country is willing to cheat their people in how they pay them or cheat their government in whether they pay taxes, the likelihood is they are going to cheat is in the quality of product and ultimately cheat the consumer.

And as we integrate a more rigorous policy in sourcing I actually believe we will get better quality products for our customers, and ultimately we will pay the same, maybe slightly more, or maybe slightly less. But it is not a big difference. Because I think it all lines up.

FT: Was your speech to Wal-Mart managers in Kansas City in January the first time you had said you would be prepared to pay more for products that met your standards?

MR SCOTT: Historically we have said that. But I’m not sure we’ve practiced it.

FT: You’ve said you want to launch an initiative in China to improve the sustainability of factories in your supply chain. How ambitious are you about that?

MR SCOTT: We’re really ambitious. We have a plan to have meeting in October with 1,000 manufacturers. We already have our networks being established in China. We’re working with an outside group, Blu Skye, that’s helping to add energy to that. And I am very confident that we are going to see in China more progress than any of us has imagined.

And part of it is serendipity, because the Chinese government has just now really gotten on the sustainability process as far as understanding what its going to mean them in the long term, and they’re being really aggressive.

It lines up with what our customers want. It lines up with what businesses are going. And it lines up with where the government is. And I think that combination is going to make this much better, much faster than any of us would have thought.

FT: And have knock on effects for other companies sourcing from China?

MR SCOTT: Absolutely. When we worked with General Mills to change the shape of the Cheerios box so it takes less packaging, everyone who sells Cheerios gets that same advantage. So while we might talk about saving 100 tons of paper by removing something, the reality is the rest of the world gets that same benefit. Regardless of whether they shop at Wal-Mart.

FT: This puts you in the position of a global standards setter. In the Kansas City speech you sort of said that government is not doing very much so business has to step up. Do you worry about the responsibility you’ve now got?

MR SCOTT: We are not trying to usurp government. But there are certain things that society is gong to hold this company responsible for.

I think it is obvious if you look back that because a government does not demand certain things, that does not give you the freedom not to do the things that you know need to be done.

There are going to be controversies, where people want us to move faster or people want us to do things that are much more progressive. We have to do things within the context of what our customer – our core customer, what they can, what they want and what they cannot afford to live with.

You don’t operate in an environment where you can just go out and create the Garden of Eden. You have to deal with real people and real people’s issues and we can’t run in a direction that leaves our customers behind.

We have a responsibility to have sustainable company. And to do that we have to be relevant to our customer.

But it’s like compact fluorescent bulbs. People were concerned about the fact they cost more and would our customer recognise that over the long term they would save an enormous amount of money. There was a lot of debate about that. And we ended up selling 147 million bulbs in a year at a higher price than incandescents. So clearly our customer recognises that kind of value and is willing and has the capacity to make that kind of investment.

FT: You once characterised your management style as leadership by erosion. Is that still how you see it?

MR SCOTT: At the level of people I work with…as a CEO if you have to get up every morning and tell them what to do, then you’ve got the wrong people in the jobs.

They’re all well compensated. They’re very talented. So what we do mostly is we just talk about… where are things, what are you thinking about what are the strengths of your people, what are the changes you need to make. What’s the top competitive set, and why would they be better than us here or there.

And we walk stores. Out of that I think what we have is a common understanding of where we need to accelerate, where maybe we’re spending effort that’s not going to be valuable to us, and kind of what the expectations are.

I can’t run Sam’s Club. I can’t run Walmat Japan. You can’t do that. The people in charge have to do that. What we to have is the fact that number one each of people who report to me has to maintain the culture; they have to have customers and associates up there first; and they have to be building a management team that can work in a much more complex sophisticated environment.

FT: Do you find you get pulled by the consensus in directions you didn’t expect to go? or do you guide the consensus?

MR SCOTT: I think the most difficult thing about my job is having the level of talent we have today, finding yourself disagreeing with them. And allowing them to go the direction they want to go. I find it very difficult…but it does happen and quite honestly it works well.

FT: Do you have any examples?

MR SCOTT: Oh, not that I’d discuss publicly.

At the end of the day if what you’ve done is gone out and hired the best, then why in the world do you think that your general knoweldge supersedes their lifetime of experience within a specific area.

So what you tend to do more than anything, is you tend to maybe round off or resettle a direction, or reshape a little bit. But in general there’s not much of just saying “you’re going the entirely wrong direction. Now you have to go over here to B and that’s where all your effort has to go”. We don’t do that.

But we get into details. We go out to the competition and we buy competition. And we bring them from Sam’s Club and we set them in the office next door and we taste pumpkin pies and we talk about why this one’s different from that one and what goes into it.

FT: Are you spending more time running the company these days as opposed to reputational work?

MR SCOTT: I don’t run the company. But I have been fortunate in the last nine months been able to spend more time walking back into the merchandise area and asking them what’s happening, and what’s selling and what’s happening with inflation and those kind of things. So I’ve spent move time on sustainabilty. I’ve spent less time out trying to defend the company.

FT: At Kansas City, Wal-Mart almost seemed to be claiming victory over the UFCW union in getting Wal-Mart out of the political agenda in the run-up to November’s presidential elections?

MR SCOTT: I don’t think avoiding a negative is a victory. I think we have done a good job as a company in communicating to the people who are in this process that Wal-Mart’s customer base and associate base is important to them and we play an important role in this country. And I think it is their recognition that the very people we serve are the people they would like to vote for them that has really shaped the fact that other than a few times we have not been the centre post of anybody’s election campaign.

FT: What are you’re feeling about the level of debate on healthcare. Both Democrat candidate both seem to be in favour of some form of obligatory payroll contribution which is something you have always been opposed to.

MR SCOTT: What we’ve been opposed to is state-level mandates where you have the issue of the violation of ERISA [the federal US law covering benefit obligations]. We have not as far as I know set out a position on what a national programme might look like and the involvement of private insurance within that.

I am not particularly encouraged about the debate. I think business has been absent in this discussion on healthcare. I’m not sure why. If you look at the global environment we operate in today and you look at our leading exporters, and they tend to have very rich benefit progammes. And the more uninsured we have and the richer their programmes, the more the costs of the uninsured that they are going to be picking up. And we’re going to be competing in this global environment. And I worry about our global competitiveness there.

And the other caution I have is that in some ways its politically expedient to be able to say that everybody who has over a certain number of people should have healthy insurance. And the truth is that most of the people who are not insured are working in places with very small employment bases. So how do you this in a way that is appropriate for society. Because we’re going to provide this to people It’s not that there are 47m people who are not getting health care. It is that there are 47m people who don’t have health insurance. How do we get to that”

And I think business needs to be more involved in the dialogue.

I think government is going to be engaged after this election regardless of who wins, and I think business should be more involved in the discussion. I think it has long-term ramifications for our global competitiveness.

FT: Why has business not been more vocal?

MR SCOTT: I think the business world is complicated enough today that if you are the CEO of a company why do you want to get out and get in the middle of a debate that you don’t have to be in. And in our case we were already in that debate.

FT: What’s been your most difficult time as CEO?

MR SCOTT: The individual discussions that I had with people during the worst of those times when we were getting criticisms that were both fair and unfair, and I had to go out every day and meet with people who just did not like us…the accumulation of that period of time was difficult –

It wasn’t any one thing – because I actually have a childhood that’s given me a great capacity to accept criticism. I wasn’t overly sensitive to that. But it was clear that three or four years of going out each week and talking to another group that doesn’t like you takes its toll.

And we had some unfortunate issues within the company that were hard. That were hard on the organisation and that were hard on us personally that knew people. And of all the things that were difficult, those decisions were not difficult decisions to make, but were difficult to live with the consequences.

FT: Did the criminal case and eventual conviction of Tom Coughlin, Wal-Mart’s former vice chairman, for embezzlement in 2006 mark some kind of historic shift in Wal-Mart’s culture?

MR SCOTT: No.

FT: But the theory would be that his lax ethical behaviour tied in with what you’ve said elsewhere about the old culture under which Sam Walton would reinstate truck drivers that had hot-wired their trucks. The end of a sort of “good-old boy” culture at Wal-Mart?

MR SCOTT: I think it was inevitable. If you go through the S curve that people talk about. The founder creates this idea. Then you get a group of people that replicate, replicate, replicate, and then you reach a point where the world’s changed so much that your model just can’t be replicated and then you start to trail off. I think that conicidentally maybe those things happened at around the same time.

But I think for all of us, when I took this job I didn’t even know about an S curve. I didn’t realise that I was a replicator. I just knew that we had this thing that worked. And if we just kept doing it and doing it well that we had success.

It then became obvious what was happening to us. And that the model itself….not the Every Day Low Price, and not the culture…but how we ran this business and how we dealt with the outside world, that those things we couldn’t just replicate.

It didn’t matter if we said, “Well we’re just from Arkansas”, that it just wasn’t going to play. No matter how much we hoped the attention would go away. And the world was different. And all of us had to grow and change.

And I think that having Mike Duke come in to run Wal-Mart stores and bringing in Eduardo, and laying out a plan…I think you see the results of a management team that through experience and outside hires is now somewhat more sophisticated in how it is able to deal with the outside world.

FT: You were brought up about 70 miles from Bentonville. Do you think the next Wal-Mart CEO will be from the Ozarks?

MR SCOTT: “We’re looking for a person for Booneville [a small town in Arkansas]“…No, I don’t know. I don’t have any idea.

I think ultimately that what we’re seeing is that that international groups – because they operate more on their own – that we actually are developing talent in international that has a greater breadth of experience than what we are developing domestically in the US. And what we’re trying to do now is to try to understand how do we develop the people in the US to a greater extent – giving division leaders more of the complete authority over real estate and capital plans, where we used to do all these things corporately.