فصل 10

10

Stepping Back

‘Heaaah, Maggie!’ Sam screams from the cab of his truck. ‘Cumoon heaah tuhme!’ Up top, Sam’s friend, Royce Beall, a department store owner from Jacksonville, Texas, chuckles. ‘Listen to Sam a-hollerin’,’ he says. ‘It don’t do no good, but he’ll yell all day like that.’ “

—SOUTHPOINT magazine, February 1990

By the time 1974 rolled around, I have to admit we were feeling pretty good about our accomplishments. By anybody’s standards, we had built a heck of a regional discount chain, with just under 100 Wal-Marts open for business in eight states. We were doing nearly $170 million in sales, with more than $6 million in profits. The stock had split twice, and we were on the New York Stock Exchange. By now, everybody was sharing the profits so the whole company was pumped up. Wall Street was buying into our strategy, and whatever reservations anyone up there might have had about me, they seemed to think pretty highly of Ron Mayer and the rest of the management team we had in place. At fifty-six, I was free and clear of debt. My net worth was far greater than I had ever imagined it could be when I started out in the retail business. Our kids were out of college and starting up their own lives. I really don’t see how I could have reasonably expected much more out of life.

If I’ve given the impression so far that Wal-Mart has occupied most of my competitive energy over the years, that’s not completely accurate. I’ve pursued my other passions all along, too, mostly quail hunting and tennis—and I pursued them both very competitively. A lot of businessmen seem to prefer golf, but I always thought it was a little too country club for me and it took up too much time and wasn’t really competitive in the same way that tennis is, you know, in a give-and-take, head-to-head way.

Helen walton:

“When we first met, Sam played golf, but he would get terribly frustrated when he made mistakes. Once, when he was in the Army, he was out playing with some of the officers, and I think their colonel was along that day. Sam had hit off into the woods. It made him so mad that he broke his club on a tree. So he came home that day, threw his clubs down, and said, ‘I’ve had it with golf.’ After that, it was mostly tennis for him.”

I took my racket with me whenever I was flying, and I had friends to play with when I hit their towns. For some reason, I loved to play around noon—when the sun was hottest—and I guess I was pretty aggressive. I played regularly from the time we got to Bentonville until about two years ago, when my legs just couldn’t cut it anymore.

GEORGE BILLINGSLEY, TENNIS PARTNER:

“For about ten years, Sam and I played tennis at high noon—usually on the court over at his house. I think he liked to play during lunch hour because he wouldn’t dream of taking any of his associates away from their jobs to play. On the court, he was the most competitive player. He studied his opponents’ games, and he knew our strengths and weaknesses as well as his own. If you hit a ball to Sam’s forehand, that point was his. He would hit it crosscourt, and it was over.

“He loved the game. He never gave you a point, and he never quit. But he is a fair man. To him, the rules of tennis, the rules of business, and the rules of life are all the same, and he follows them. As competitive as he is, he was a wonderful tennis opponent—always gracious in losing and in winning. If he lost, he would say, ‘I just didn’t have it today, but you played marvelously.’ “

LORETTA BOSS PARKER, POPULARLY KNOWN AS THE VICE PRESIDENT FOR TENNIS:

“If Mr. Walton was out on a trip, his idea of making a tennis date would be to radio our aviation department when he was a few minutes out from landing and have them phone me with a time. I would get the call at eleven, find him a partner, and he would be playing by noon.”

So tennis became my outlet for organized competitive sport and exercise. But my real passion outside Wal-Mart has always been my bird hunting. I have to say it’s probably my one self-indulgent activity. I loved it so much that I just made it part of my way of doing business from early on.

I never did that much quail hunting growing up, not until I met Helen’s father, who was dead serious about it. Anytime I was around Claremore I loved to go out there and hunt with Mr. Robson, or Helen’s brothers, Frank and Nick. Her dad and I were both much better than average shots, and we got to be pretty competitive over the hunting.

As I mentioned, Bentonville appealed to me because I could hunt quail seasons in four states. So during the season, I usually took off almost every day around three or four in the afternoon and went out to do a couple of hours’ hunting. I had an old hunting car I’d haul my dogs in, and I’d go find a farm or ranch I wanted to hunt. I learned early that the best way to get invited back was to go ask permission and offer the owner a box of chocolate cherries from the store, or, if he preferred it, a take of the game I shot. I’ve hunted all over these hills and valleys around here.

JOHN WALTON:

“Until Dad was in his mid-sixties, I really had to struggle to keep up with him. I thought I was in pretty good shape, but my tendency is to kind of walk along, take it easy, and enjoy the outdoors. I’d look up, and Dad would be out of sight. He hunted like Sherman marched through Georgia.”

When I asked permission to hunt, I always introduced myself as Sam Walton of Sam Walton’s variety store down on the square in Bentonville, and I found that it really helped my business. When these farm folks would come to town to shop, they’d naturally do business with that fellow who hunted their land and brought them candy. I still meet folks today who tell me their father recalls me coming out to hunt their land in those days. As we began to expand, and I flew around more, I would throw the dogs in the plane with me so I could hunt between store visits.

I had some crazy times with those dogs out on the road. Usually I made them sleep in the trunk of the car, but if it was Ol’ Roy, who was really more of a pet than a bird dog, I would let him sleep in my room with me —unbeknownst, I’m afraid, to the Holiday Inn folks. Once he got in a fight with a skunk, and I am ashamed to even think of what the next person to get my rental car must have thought happened in that thing. I held him by his hind legs and half drowned him trying to wash him off in this lake, but we found out you cannot wash skunk off a dog very easily.

Roy was probably the most overrated bird dog in history. He wasn’t much of a hunter at all; he would point rabbits, for example. But the associates and the customers got a kick out of visiting with him in the stores, and once we put his name and picture on our private label dog food, it sold tons. Another thing about Roy that was very unusual: he was a great tennis dog. He would go with me to the tennis court and lay there, and whenever the ball went out of the court, over the fence, or whatever, he would go chasing after it and bring it back to me.

What I really love about hunting is the coordination and the training of the dogs. You have to develop a partnership with them. You have to motivate them, and they have to do their work reasonably well.

FROM SOUTHPOINT MAGAZINE, FEBRUARY 1990:

” ‘George! Cuminheaartuhme! You’re about to get your butt shot, George,’ Sam says. Then, to a companion: ‘I think George might be a good one. He’s hunting. He’s got his nose into the wind, and he’s hunting back and forth. He acts like he knows what he’s doing. He may not, but he acts like he does. He backed the other dogs, and that was just purely instinctive. And a dog with me has to have some instincts.’”

I pride myself on being able to train my own dogs, and I’ve never had a dog handler, like some of these country gentlemen friends of mine. I enjoy picking out ordinary setter or pointer pups and working with them —yanking them around and correcting them and yelling at them and being patient with them. They’ve got to learn to find the birds, and then they’ve got to learn the discipline to hold them and wait for the hunter. I have had some dogs I couldn’t handle, and Mr. Robson made a specialty out of resurrecting my failures. He liked nothing better than to take one of my cast-off dogs and fix it up, then give it back to me.

Aside from training the dogs, I like being outdoors in all kinds of weather. When I’m out there, I’m not thinking about Wal-Mart or Sam’s or anything but where the next covey might be. Also, some of my best friends are people who like to hunt quail. I’m extremely prejudiced, but I feel like quail hunters are generally good sportsmen who’ve got a balanced respect for conservation and wildlife: things that I certainly value.

As good as the quail hunting is around home, Bud and I got really taken with Texas quail hunting a few years back. We each got leases on ranches way down in south Texas scrub country, not too far north of the Rio Grande Valley. My place is about as simple as they come; Bud’s is a good bit fancier. His has a swimming pool.

SOUTHPOINT :

“Sam Walton’s Campo Chapote is a rustic little cluster of trailer homes out in the vast middle of South Texas nowhere. This isn’t the quail hunting of rich Southern gentry, the kind with white-coated servants and engraved Belgian shotguns and matched mules in silver harness hitched to mahogany dog wagons. Sam calls that variety ‘South Georgia quail hunting,’ and he’s tried it, but it isn’t really him. In case the ambiente of Campo Chapote hasn’t sunk in yet, it is, to put it simply: ‘All Things Not Trump.’ This is a camp where your host hands you your towel, points you to a bedroom in the trailer, and explains: ‘Don’t let the noise in the ceiling worry you, it’s just rats.’ “

BUD WALTON:

“One time Sam and I got invited to a fancy quail hunt on one of those south Georgia plantations. They told us they’d pick us up at this landing strip. So we flew in there, and there were all these corporate jets lined up. Well, this guy in a Mercedes pulls up to get us. You should’ve seen the look on his face when Sam opened up the back of that plane, and his five dogs came flyin’ out of there. They weren’t expecting anybody to bring their own dogs. They had to haul them in that Mercedes.”

As you can see, I’m not all work. I like to play as much as the next guy. And I have to admit, back around 1974 I was awfully tempted to take more time for myself, -to step back and let Ron Mayer and the other guys run the company, while I went off to enjoy life. Around that same time, Helen and I went on some of our overseas trips, although I’m sure I spent most of my time over there nosing around stores and doing business.

So for the first time since I had begun retailing in 1945, I was beginning to back off from the business. I was getting slightly less involved in the day-to-day decisions and leaning a bit more on Ron Mayer and Ferold Arend—our two executive vice presidents. I was still chairman and CEO. Ferold, at age forty-five, ran merchandising, while Ron Mayer, who was only forty, ran finance and distribution. To handle the explosive growth, we were bringing on new people in the general office. Ron brought in a lot of people to handle data processing and finance and distribution.

What happened then is the one period in Wal-Mart’s history that I am still the least comfortable talking about today. But everybody else has had their say on the subject so I’m going to explain the events the way I saw them unfold and be done with it.

As I look back on that period now, I realize I had split the company in half, setting up two factions which began to compete fiercely with one another. There was the old guard, including many of the store managers, remaining loyal to Ferold, and the new guard, many of whom owed their jobs to Ron. Pretty soon, everybody began to take sides, lining up behind either Ron or Ferold, who didn’t get along at all. What I did next—which seems totally out of character for me—only compounded the problem tenfold.

Ferold had been valuable in organizing the company as we began to roll out stores, but because of all the technology and sophisticated systems we were needing, I really felt at the time that Ron was absolutely essential to the company’s future. In addition to his ability, he had a lot of ambition. He made it pretty well known that his goal, which I respected, was to run a company, preferably Wal-Mart. He told me one day that if he couldn’t run our company, he wanted to get out and run another one. So I thought about that for a few days, and I really worried that we were going to lose Ron. Then I said to myself, “Well, I’m getting pretty old, and we could probably work together. I’ll let him be chairman and CEO, and I’ll just enjoy myself, step back a little, and, of course, continue to visit stores.”

So I became chairman of the Executive Committee. Ron became chairman and CEO of the company. Ferold became president. I moved out of my office down at the end of what they jokingly call “executive row,” and let Ron have it. I moved into his office. I made up my mind to stay out of his way and let him run the company, telling myself that I would just check to see how he was getting along. Since I had really been letting other people operate the company day to day all along, I thought things would run real well this way.

Well, I was no more ready to retire in 1974 at the age of fifty-six than the Arkansas sun is ready to start rising out of Oklahoma in the morning. But for a while I did step back and take off a little more time. I’m sure to Ron Mayer it must have seemed like I never took off at all. The truth is, I failed at retirement worse than just about anything else I’ve ever tried. Actually, I knew it was a mistake almost right after I resigned the chairmanship. I tried to stay out of Ron’s way. The problem was that I actually just kept doing exactly the same thing I had been doing all the time. I wanted to see my ideas keep flowing around the company, but I wanted Ron to be successful in operating the company and building an organization. Unfortunately, I just couldn’t quite stay away from it to that degree. The situation was quite a burden for Ron, and would have been for any forty-year-old guy wanting to run his own company, I think.

Meanwhile, the house was dividing up against itself. A lot of the newer, younger guys were lining up on Ron’s side, and the older bunch who ran the stores were backing Ferold. When I began to sense how deep this split really was, I got real agitated about it, and then I became even more involved in second-guessing everybody.

AL MILES, RETIRED EXECUTIVE VICE PRESIDENT, WAL-MART:

“There was this thing between Ron and Ferold. I wasn’t too involved personally because I was out in the field then. But even out there it was very apparent that two camps were building up in the company. You know, you almost felt committed to say, Well, I’m on this team, or I’m on that team. We started seeing a looseness in our organization that had never been there, and things none of us liked were starting to happen regularly. The seriousness of running our stores and taking care of our people wasn’t happening. And most of us district managers would get together and talk on the phone on Saturday mornings, and, you know, we thought we were going to hell in a handbasket. I’m not exaggerating. I mean we really did. Also, I remember that when Sam started spending more time in the office, he was very, very intense.”

I kept hoping things would work out. And I should say this: Wal-Mart showed real good numbers during this whole period. It was never a question of mismanagement. What we had was a semiretired founder who didn’t want to go away, on top of an old-line bunch of store managers at war with an ambitious young guy with big ideas of his own.

FEROLD AREND:

“That period right in there was the only negative I ever experienced in my whole time at the company, which is pretty remarkable in itself. Sam always felt the need for his people to compete with one another because he thought it brought out the best in them, and most of the time it did. But this was a situation that just didn’t work. When he stepped aside, it created a tough situation for everybody. Ron’s people were loyal to him, and mine were loyal to me. Sam was saying, I’ll decide the things that need tiebreakers.’ That turned out to be a lot more things than he had intended. So once he realized how badly things were really going, he did something about it.”

I’ve always taken most of the blame for this mess I created. But it’s also true that I didn’t think Ron was handling some things as well as he should. I worried about his people skills, and I felt like the whole clique thing was really hurting our management at the store end, our most unusual strength. And I guess I was pretty unhappy too over some issues of what you’d call personal style—none of them really all that unusual in most corporate environments, but different from the way we had always done things around Wal-Mart.

I agonized over all this. I rarely lose sleep over crises at the office, but this time I did. I didn’t want to disappoint Ron, didn’t want to lose him. But the company was headed in the wrong direction. So finally I called him in one Saturday in June of 1976, thirty months after I had given up the chairman’s job, and just said simply, “Well, Ron, I thought I was ready to step out, but I see that really I wasn’t. I’ve been so involved that in a way it has put you under a real handicap.” I told him I wanted to come back in as chairman and CEO, and have him assume another job—vice chairman and chief financial officer, I believe.

My proposal wasn’t agreeable to Ron, and I can certainly understand why. He wanted to run the company, and when he couldn’t he decided to leave us. Nobody believed it at the time, but although I was unhappy with some of the things going on under Ron’s chairmanship, real unhappy with a few, I tried as hard as I could to convince him to stay and be part of our growth even though he couldn’t be chairman and CEO anymore. I said, “Ron, we are going to miss you, we are going to need you, and I think we’re going to suffer a lot because you’re not here.” I offered him everything to stay, but he felt it was time to go.

As disappointed and unhappy as he was, Ron said, “Sam, I know you’re going to think that things are falling apart, and a lot of other people are going to think they’re falling apart, but you’ve got such a strong field organization here, and such loyalty from the associates and the managers in those stores out there, and such loyal customers, and the company is so sound in its operating philosophies, that I think you’ll just move right down the road.” I appreciated his expressing that confidence in us. I know he meant it, and I’ll never forget it.

In company lore, that incident became known as the “Saturday night massacre.” What followed became known as “the exodus.” First, a whole group of senior managers who had been part of Ron’s team—our financial officer, our data processing manager, the guy who was running our distribution centers—all walked out behind him. You can imagine how Wall Street felt about that. A lot of folks wrote us off immediately. They thought, as they have through the years, that we just didn’t have the management to hold the place together.

They assumed that Ron Mayer and all his folks were the reason we’d done well, and they just ignored all the basics we had in place, all our principles: keeping our costs down, teaching our associates to take care of our customers, and, frankly, just working our tails off.

Throughout all this turmoil, Jack Shewmaker, one of our brighter, brasher young talents, had been making strong contributions to the company, and I thought he might be just what we needed to get us back on track. But when I named him to be executive v.p. of operations, personnel, and merchandise—passing over some folks who were older and had been with us longer—a bunch more of our managers left. It was a real, bona fide exodus, and by the time it was over, I’ll bet one third of our senior management was gone. For the first time in a long time, things looked pretty grim. And at that point, I have to admit I wasn’t sure myself that we could just keep on going like before.

As I said back when we lost that first lease in Newport, most setbacks can be turned into opportunities. And as things turned out, this setback presented us with one of the great opportunities in our company’s history. Ever since David Glass and I had met at that awful Wal-Mart opening in Harrison, Arkansas, I had been trying to somehow persuade him to work for us. He was a big deal at this discount drug chain up in Springfield, and I was convinced he was one of the finest retail talents I had met. For some time, I had been after Ron Mayer to hire David, but he wouldn’t do it. So when Ron left, David was the first person I went to see, and I finally talked him into coming to Wal-Mart. I’m not saying that with David and Jack Shewmaker as executive vice presidents—David for finance and distribution, and Jack for operations and merchandise—we didn’t still have some turf fighting left to do between the two sides of the company. But, man, we had as much retail talent and firepower together under one roof as any company could handle.

These two guys are completely different in personality, but they are both whip smart. And with us up against it like we were, everybody had to head in the same direction. Once again, Wal-Mart proved everybody wrong, and we just blew the doors off our previous performances. David made us a stronger company almost immediately. Ron Mayer may have been the architect of our original distribution systems, but David Glass, frankly, was much better than Ron at distribution, and that was one of the big areas of expertise I had been afraid of losing. David also was much better at fine-tuning and honing our accounting systems. He, along with Jack, was a powerful advocate for much of the high technology that keeps us operating and growing today. And not only did he turn out to be a great chief financial officer, he also proved to be a fine talent with people. This new team was even more talented, more suited for the job at hand than the previous one.

All along, the history of Wal-Mart has been marked by having the right people in the right job when we needed them most. We had Whitaker, straight out of the get-after-it-and-stay-after-it old school, to help us get started; Ferold Arend, a methodical, hardworking German, to get us organized; Ron Mayer, a whiz at computers, to get our systems going; Jack Shewmaker, a brilliant shoot-from-the-hip executive with a store managers mentality, to blow us out of ruts and push us into new ideas we needed to be working with; and David Glass, who could step up in a crisis, keep his cool, and eventually get control of a company that became so big it was hard to comprehend.

From day one, we just always found the folks who had the qualities that neither Bud nor I had. And they fit into the niches as the company grew. Then every so often, we needed even better talents than we sometimes had on board. And that’s when the David Glasses would come along. But there’s a time for all these things. I tried for almost twenty years to hire Don Soderquist away from Ben Franklin. I even offered him the presidency one time, and he didn’t come. But when we really needed him later on, he finally joined up and made a great chief operating officer for David’s team. At any company, the time comes when some people need to move along, even if they’ve made strong contributions. I have occasionally been accused of pitting people against one another, but I don’t really see it that way. I have always cross-pollinated folks and let them assume different roles in the company, and that has bruised some egos from time to time. But I think everyone needs as much exposure to as many areas of the company as they can get, and I think the best executives are those who have touched all the bases and have the best overall concept of the corporation. I hate to see rivalry develop within our company when it becomes a personal thing and our folks aren’t working together and supporting one another. Philosophically, we have always said, Submerge your own ambitions and help whoever you can in the company. Work together as a team.