Millennium Marketing Research®

Tom Schori DBA Millennium Marketing Research®, 808 Ironwood, Normal IL 61761, 309-532-8466

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Leadership: usually the secret ingredient to business success.

By Thomas R. Schori, Ph.D., and Michael L. Garee, Principals,  Millennium Marketing Research, 808 E. Ironwood, Normal, IL 61761-5239. Tel. 309-532-8466 -

What makes one business wildly successful while others in its industry, at best, simply limp along year after year? Many theories have been postulated to explain how business success is attained, but in our opinions, there usually is one simple, very basic explanation for such success: superior leadership. The retail phenomenon known as Wal-Mart provides a classic example.

When Sam Walton founded Wal-Mart over 20 years ago, the folksy, fledgling retailer from (of all places!) Arkansas was greeted with a mixture of humor and deep skepticism by so-called business "experts." Surely no such backwoods operation could possibly hope to effectively compete against the likes of American retail icons like Sears, K-Mart, et al. "Big" business simply wasn’t conducted in the simplistic manner exhibited by upstart Wal-Mart!

Well, by now everyone knows the "experts" were dead wrong in their assessment of Wal-Mart’s marketing potential. By 1988, under the tutelage of the down-home, unprepossessing Walton, the company had reached annual sales of $16 billion¾a phenomenal rate of growth. But the best was yet to come. In that year, a dynamic leader by the name of David Glass, who at the time was the retailer’s Chief Financial Officer, took over the reigns of the company from Walton and the sky literally became the limit for Wal-Mart.

At the time Glass became CEO of Wal-Mart it was widely believed¾again, by the "experts"¾ that no retailer would ever be able to attain $100 billion in annual sales. And, as Glass readily admitted in a recent USA TODAY interview, when he took over the helm, there certainly was no emphasis in the company on shooting for that "unreachable" goal.

"We just wanted to be the dominant retailer and do as well as we could," he said. "We did the $100 billion sort of by accident."

(The company first surpassed the $100 billion mark two years ago, when it generated $105 billion in annual sales.)

Today, with 2,400 discount stores, 450 wholesale Sam’s Clubs and 600 stores outside the U.S., Wal-Mart serves some 90 million customers a week! And, the "upstart" retailer is now three times larger than its nearest competitor, the one-time unassailable Sears, and dwarfs both Target and K-Mart.

Did Wal-Mart’s remarkable ascendancy occur simply by chance? Hardly, it was of course initiated by Sam Walton, who launched (and led) the company with integrity, honesty and a genuine commitment to treating employees (called "associates" at Wal-Mart) with respect and dignity, and equally important, to providing customers with good products at good prices. That leadership legend was continued and significantly expanded by Glass.

Glass, like any successful leader, quickly set a clear, easy-to-understand, precise strategic course for the company to follow. (Remember, the best plan is a simple plan!)

"Our priorities are that we want to dominate North America and then Asia and then Europe," he said recently from the company’s headquarter in Bentonville, AR.

The marketing tactics Glass utilizes are essentially unchanged from those initially established by Walton: carefully listening to customers and associates and then acting on such input. This approach is key to the continued success of the retailer, Glass says.

"We get 15,000 cards, letters, calls a week," he said. "We collect all of that and act on it. Not agonize over it, but act on it."

And that propensity of Glass’s¾to act on important information rather than to agonize over it, as is more characteristic of many CEOs and their staffs today¾is one of the many things that has made him (and keeps him) an effective, dynamic leader. It is also part of what keeps Wal-Mart at the top of its game.

Another distinguishing characteristic of Glass’s is his ability and willingness to "get down in the trenches" with associates to learn first-hand what customers want and expect from the retailer. Recently, for example, Glass joined associates at one of the company’s retail outlets in the well-known Wal-Mart tradition of greeting customers at the door. (Now how many CEOs of other companies would "lower" themselves to that level?!)

To be sure, not everything about Wal-Mart, or Glass’s leadership of the company, is above reproach. After all, it still is an organization composed of people, and like any group of people, there are flaws to be found and imperfections that could be surfaced. Still, on balance, Wal-Mart remains very much a standout, very much an exception to the norm.

"If you (take) the rose-colored glasses off, you still see a good picture," remarked a PaineWebber retail analyst.

Indeed, you do, and we believe a major reason for this is that the company is under the imaginative, dedicated leadership of an executive like David Glass. His clarion call would appear to be "Follow me!" instead of "Follow orders!" It’s too bad that more companies aren’t equally blessed with his style of leadership.