Message from our Chairman Sam Walton

Times change; people may change, but there's one variable that remains the same at Wal-Mart and that is the essence of our company – OUR PEOPLE. Our Chairman, Sam Walton, wrote this message a couple of years ago. Although it was written at another time in our company's history, the article is still as timely, pertinent and valuable as it was then. We should all strive to be Servant Leaders

I've just finished a memorandum to all management personnel in Wal-Mart. Effective July 15th we'll all go on a first name basis. (Our distribution centers and Sam's are already there.) To me, as I've often stated, the most important element in establishing a happy prosperous atmosphere is the insistence upon open, free and honest communication up and down the ranks of our management structure and with our associates. I'm totally convinced that by simply taking away Mr. or Mrs. or Miss titles, and all of us being John, Susan, Betty, Sam, Jack or David we can be a better company in time. Our Wal-Mart company must be a partnership, and we must have good communication and a continuous exchange of ideas, suggestions, and constructive criticism if we're going to continue to grow and build a better future for us all. We in management, and our hourly associates, are and should be, a team. We need desperately to support, listen and assist each other with the bottom line. The bottom line is to serve our customers better with quality merchandise at the lowest prices. I'm suggesting we'll communicate better with each other and that we'll find it easier to talk to one another and build that Wal-Mart team spirit if we do away with those titles. I'm also sure that with good leadership we can have even more respect for one another and even better discipline and standards within our company.

I just finished reading a good article that applies to our subject. The title is "The Boss is Dead" and was written by Dr. James G. Carr. These are a few direct quotes that seem to apply.

"And what are your long-range goals, Chuck? Where would you like to think your career is headed?" "Top management"

"Good! But tell me what exactly does 'top management' mean to you?"

"What do you mean?"

"I just want to know what you see yourself doing when you become a top manager?"

"Well, I intend to be the guy in charge … the guy who tells people what to do. I want to run things and I want to run people!"

The goal was conceived in inexperience and expressed in an immature way, but it pinpoints graphically where modern leadership departs from an outmoded "bull of the woods" concept of management. It highlights the difference between "leader" and "boss".

The most critical and often the most devastating assumption is that subordinates are innately inferior to those who have authority over them. It is true that the person in authority usually has more education, more time on the job or more comprehensive grasp on the mission than his helpers do. Whereas the boss chooses to view these differences as marks of superiority, the leader is inclined to treat them simply as differences...but differences which can be used to supplement the equally unique—and equally valuable – talents of other team members. If the "Chucks" of the industry were simply on an ego trip, they would be merely obnoxious. But, when one takes into account that their attitudes (1) affect everything they do, (2) are transparent and easily read by their co-workers, and (3) color every relationship they have on the job, they're dangerous!

When the boss operates on the assumption that his subordinates are genuinely less capable than he is, it is not much of a step to the next assumption that he has to play the role of the watchdog. He has to predict, spot and raise Cain about the errors his helpers are bound to make. He focuses upon the negatives. He becomes a critic rather than a teacher or coach and begins to interpret any mistakes as a reflection upon his own adequacy. The leader, on the other hand, does not relish mistakes; instead he focuses on the positive. He recognizes that the "freedom to fail" is essential to the development of his less-experienced workers. He knows that those who are not making mistakes are not likely to be growing.

The leader is no less conscientious than the boss, nor is he any less accountable for the accomplishments of the team. But where the boss strives for results, the leader strives to develop the people who can deliver the results. He knows that he can add nothing to his own stature by diminishing others; and, should he truly be burdened with the incompetent or untrustworthy helpers, he will either help them or remove them. He will not use them as a vehicle for his own ego trips. The ultimate accolade to the leader is that he will produce more leaders. A boss can only misguide his subordinates and produce more bosses!

So, I say again—The Boss is Dead—Long Live the Leader-Servants in our Great Wal-Mart Company.

Let's do ourselves a favor by not only working together on a first name basis but also dedicating ourselves to a greater involvement with our company as an individual and true partner. Bring on your suggestions and ideas for improvement. Go to your manager, say "John, how about letting me try this idea. I'm sure it will be good for our customers, improve sales, gross margins or whatever." Hopefully, quite often his reply will be "That's a great suggestion. It might very well work. We'll try it. Let's go for it." Thus, through your interest with a creative display or idea, you could be most instrumental in not only helping your store or division, but as you know, we constantly pick up on good suggestions in Wal-Mart and spread them quickly throughout.

I'm sure you're getting the picture. Some of you will find it hard to change, as I've been Mr. Sam or Mr. Walton for all of 40 years now since that first store, to many of you.

Let's try it. Hopefully, by July 15th, you will all have had time to meet, think about it, and will have resolved to make our first name approach work. As almost everything at Wal-Mart, we are flexible – we believe in change. And through the years have proven we can do the "impossible" because of our Wal-Mart teamwork and the positive attitude of our associates.

So good luck my friends. Let's get on with our business of doing more and better things for our customers, and increasing our profits and market share at the same time. They go hand in hand. Thanks for your support and for believing.

Sam