[MUSIC]
We're incredibly excited to have you here,
and
we have a lot of material that we wanna
cover today.
I figure we'll spend about the first third
talking about Walmart's business globally.
The second third, talking a little bit
about your personal leadership experience.
And then we'll save the last third for
question from our audience.
Before we get started though, I'd actually
like to hit on some news from last week.
In a blog post on the Walmart website, you
announced that starting associate store,
sources you pay in the US, was going up to
$9 an hour this year, and
next year to $10 an hour.
Along with the variety of other changes to
the way you manage your associates.
I'm curious why this change and why now?
>> Why not?
[LAUGH] We've, we've been joking, the
leadership at Walmart about how cool it is
to go to work on a day and give 500,000
people a raise.
[LAUGH] I hope you get to do that some
day, it's really, really pretty great.
We, we are just trying to run great
stores.
And for those of you that don't have
experience in retail,
I think you'd probably be surprised at how
many decisions we make,
how many variable there are.
>> Mm-hm.
>> So you just think about a store or
example, you've gotta have engaged
associates,
who've got to care about what they're
doing.
So you need to think about the wage rate,
you need to think about the opportunity
that they have,
you need to think about health care, you
need to think how many hours,
about how many hours you're scheduling and
I could go on, and on, and on.
But the changes we announced last week
here in the US for Walmart and Sam's Club,
are largely aimed at creating a better
store experience.
And, and I'm sure we'll talk some about
the internet, and
about how technology is changing the
business.
But our strategy is to find ways to bring
stores and
technology together in a way that exceed
customer expectations, and excite them.
So to do that, you've gotta have great
people who are very excited about their
opportunity at Walmart and that's, that's
what this is, it's designed to do.
>> Great.
And in your explanation of the changes
that covers for shareholders, you
explained it largely in economic terms,
those are largely the terms you used here,
that better store associate pay leads to a
better store experience and, eventually,
more profit for Walmart.
Now there's another line of argument about
associate pay that focuses on,
in a very different logical tract, focuses
on ethics, that says that.
That Walmart has a moral responsibility to
give a living wage or that there's,
you know, other considerations beyond the,
you know, store experience and
the profit to Walmart.
I'm curious to what extent did those
considerations also enter the decision.
Was it largely driven by economic
reasoning?
>> It's, it's both.
>> Mm-hm.
>> But it's mainly about
running a good business.
Our, our philosophy is if we run a great
business, society will benefit.
Communities will benefit.
Now, we are using the size and scale of
the company to engage in sustainability,
social and environmental sustainability.
In fact, we were here today, having a
milestone meeting with our folks in our
e-commerce business that was broadcast
around the, the, this hemisphere I
suppose, talking about what we're doing as
it relates to the environment.
Because it relates to the obligation we
have from people.
The way we think about it is, we're trying
to design a meritocracy.
So you heard that I started out unloading
trucks.
Eventually got into the buyer training
program, worked as an assistant manager
in a store and then was lucky enough to
move into her home office and
start managing categories, which was a lot
of fun.
More fun than I would've dreamt.
I mean, I just fell into it, I wasn't
planning on being in retail,
didn't have a design to be at Walmart, it
just kind of happened.
But, but what happened for me and what has
happened for many other people.
We, we employ 2.2 million people around
the world.
Is that you get in and
you have an opportunity to exceed your own
expectations about what's possible.
So our design is one where we try to
create the first rung of the ladder to be
one that people can reach.
So you could say Walmart should pay a
living wage to every associate.
And then that first rung would go up, but
there would be many people who couldn't
reach it.
And they might not have jobs.
And they might not have an opportunity.
So if you want to start as a cashier in
Walmart and learn how to work in retail.
Learn what it means to give good customer
service.
Learn what it means to keep a store in
stock, etcetera.
Then you can move on to becoming a
customer service manager, you might become
a department manager, which next year will
pay 15 dollars an hour.
You might become an assistant manager and
start making 50,000 dollars an hour.
You might become store manager and make
150, 180,000 dollars an hour.
And just work your way on up in the
business to do whatever it was that you
dreamt of or you're capable of doing,
let's say.
So we want a meritocracy, we want a ladder
of opportunity and I'm proud of that.
I don't have any issue with explaining
that to people and do all the time and
really, I think it's the American dream.
There, there are people, and I met one the
other day.
We, we had our, what we call our Year
Beginning Meeting, with store managers.
We pulled them all together in Orlando.
And we were talking about this phase
that's
existed in the company way back to 1979
our people make the difference.
That was one of the subjects that we were
covering at that meeting, and
when it was over with, this store manager
walked up to me and she said, Doug,
I just have to tell you thank you for the
opportunity that Walmart's given me.
I live in North Carolina but a few years
ago I was divorced,
my husband took all the money, I literally
became homeless for a while.
But so and so, and she called out the
store manager's name,
gave me a chance to work in the in the
store as an hourly associate.
And now, I think it was four or five years
later,
she's running a super center and making a
great living.
And you know, there's a tear in her eye
and it starts to become a tear in my eye.
[LAUGH] That's, that's what Walmart is
about.
And I'm proud of that.
>> Yeah.
But it's clearly been a,
you now, great platform for you to develop
your career,
and I'd like to delve into that a little
bit later but
right now I'd like to actually focus on
the scope of the business globally.
So before you were CEO, you ran Walmart's
international business and
under your leadership it grew to be more
than 6,000 stores in 26
countries outside of the United States.
Some major acquisitions were the mass mart
acquisition that brought you into many
parts of Southern Africa.
But also some bumps along the way.
Is the re-evaluation of the JB in India,
and pulling out of Korea and Germany.
So I'm curious given lots of experience in
many different countries.
What did you learn about failing at
business globally,
as leader of Wal-Mart International?
>> It can be complicated.
[LAUGH] You learn from experience, and
I think our organization has learned from
experience.
If I, if I started with Germany, which
goes way back
we tried to install our culture too fast
into that organization.
We tried to teach them the Walmart cheer
and hand them the, our technology and say,
let's go, like, all at once and it just
blew up.
We had two companies that we bought, we
tried to put them together.
And the way we were thinking about the
business was not sophisticated and
we didn't listen enough.
>> Hm.
>> And I,
it was just purely out of ignorance.
We had the best of intentions but it
didn't work.
So if you fast forward to the last few
years.
Government rules play a role if you look
at the situation in India, where currently
multi-brand retail isn't allowed from a
foreign direct investment point of view.
You have to have a JV, you have to have a
relationship and
that relationship can be complicated and
the government can shift policies
sometimes in subtle ways that, that change
the, the ground rules.
And our case today, we've got about 20
cash and carry units in India,
they serve the Corona's, the small
business owners.
In India, we would like to have a much
bigger business, but right now,
about all we can do is just grow those
cash and carry units and then, and
then we'll see if the rules change.
In Africa we used a principle that we've
developed over the last few years
which relates to scale.
>> Mm-hm.
Some of the downsides of an acquisition
can be a cultural alignment issue,
you can buy a business that doesn't
believe what you believe and
that'll create all kinds of problems.
In the case of Massmart we found one that
was very culturally aligned to who
we were.
And that scale, buying a business that's
big enough that you can start to do
business the way you want to do business.
So, for example, we like to practice
everyday low price which has a lot
attached to it including how you negotiate
with suppliers, we would like to,
not be paid to run advertisements.
We would like to have a lower cost
everyday,
and pass it on to customers everyday,
which creates supply chain efficiency and
helps our productivity work.
We'll, you can't do that if you have two
stores.
None of the suppliers will listen to you.
So, there are times when we need to grow
through acquisition to achieve some level
of scale.
There are other times where the government
situation or
other requirements prevent us from doing
so.
>> Interesting.
So you mentioned, does,
Walmart's taken a variety of different
strategies to enter these markets.
You mentioned acquisition.
Some are green fields, some are JV's.
So it sounds like you're taking a
portfolio approach in the past,
and your strategy is to continue doing
more of the same.
That there isn't necessarily one dominant
way to enter a new market that you've
learner works best.
>> Yeah, I think the way I would think
about it is on the front end closest
to the customer things need to be unique.
While its true that products are becoming
more common globally, you know,
I'm seeing Pampers everywhere.
You can't go to a country without finding
Colgate.
I mean, that these brands are global in
nature.
But the decisions around what you carry
subtleties around fresh food or
spice or things like that, require us to
have a local relevance, and
that means we've got local buying teams.
So in the country, we have local talent
making decisions about how we go to
market, where we set prices, what items we
carry,
running the stores and all that kind of
stuff.
But on the back end, there are things
we've learned about retail.
>> Mm-hm.
>> Things related to technology or
the supply chain, or the business model
itself, that need to be applied over time.
So what we do is we hire great talent to
run the markets, and
then we give them tools and resources that
over time results in more of a common
culture, and more of a common business
model.
And just one last thing about that, the
internet is changing things dramatically,
and the, the commonality of what people
read, how they consume media,
what they think, what they hear about,
that's pulling people together and
also causing retail to become more alike
in some ways.
The way that, that mobile and stores come
together
is going to be more common around the
country than it is different.
>> Mm, it's interesting, and then you
mentioned culture as part of one of
the things you try to keep relatively
common across your different countries.
And it's been something that you've spoken
quite a bit about as a leader in Walmart.
I'm curious what specifically do you do to
try to ensure consistent global culture?
>> Mm-hm.
>> Cuz it sounds like they'd be difficult
given the, 800,000 employee's abroad in,
you know, 26 different countries.
>> Yeah.
Some of you have a lot of work experience,
some of you may not.
I don't think you can overemphasize the
importance of culture.
And, and what we mean by that is behavior
you can have the most beautiful
image of your values on your website or on
your mobile app and that
means nothing if people don't actually
believe those things and act that way.
And our culture comes from our founder if
you trace it all the way back,
the characteristics of our founder, Sam
Walton were strong and positive.
And then even today, even though he passed
away in 1992,
you can find characteristics of Sam Walton
in our business in Guatemala,
characteristics of him in China.
Things like, a customer-service attitude,
a sense of urgency, listening to your
associates,
those things have caused success, and they
will cause success in the future.
And the way we articulate the things that
we talk about at Walmart is we,
we typically start with our purpose.
I'm not sure I can remember exactly what
year it was but
one of the presidents named Bush came to
Bentonville and
gave an award to to Sam before he passed
away, the presidential medal of freedom.
And he was sick with cancer at the time,
and he passed away fairly shortly after
that, but he stood up out of his
wheelchair and said a number of things.
But one of them was if we work together,
we can help people around the world to
see what it's like to save money and have
a better life.
And that phrase became save money, live
better, and that's our purpose.
So around the world we're proud of that
core deliverable from the company.
Our purpose is important, it's real, it's
meaningful.
And if you click down to values, we have
four core values.
We, we have service to the customer,
striving for excellence, respect for
the individual relates to things like
listening, and acting with integrity, and
I think those are universal truths that
stand the test of time.
And what we're trying to do at Walmart is
to get our every day behaviors of new
associates we hired in a country or those
that had been around for awhile,
to just match up with those values.
And when I go into a Walmart store and
it's not in good shape,
customer's aren't being treated well, it's
not in stock,
maybe the store's not as clean as it needs
to be, it, it, you know, breaks my heart.
And I'm always trying to figure out, okay,
what could we have done better to create
a situation where that store manager and
those associates could have done a better
job so that Walmart lives up to its
potential?
Doing that across 27 countries, now
that we're 52 years old is harder I think
than what it might have been a decade ago.
>> And what about the challenge of
maintaining those core values or
maintaining the same focus on the
customer,
given the e-commerce disruption of
traditional retails.
Walmart's business is changing, and retail
as a whole is changing to be more online.
How do you, how is your business changing
and how do you keep those core values, or
do those values have to change actually-.
>> Yeah.
>> As, as the business changes.
>> I think the, the core values stay the
same.
I think some of the behaviors probably
change and
the way we go to market clearly changes.
I'd tell you a story.
About a few months ago I was talking to a
person from Silicon Valley who's brilliant
and if I said this person's name you would
know their name.
And their interoffice in Bentonville and
they do some contracting with, with us.
And they were writing on the whiteboard
how they run their business and
how they design their algorithms and what
they try to do and
what their purpose is and stuff like that.
And we were talking about the future of,
of business and it dawned on him after
talking about our mutual businesses for
a few minutes that in some ways we've
already done the harder part.
So if, if you wanna reach a large number
of customers, and
grow a business that's almost $500
billion, you've got to be positioned to
add a lot of volume to be able to grow
that company so you've gotta be able
to not only serve customers the way you
used to serve them in stores or clubs, but
you've gotta reach them in new ways.
And so mobile becomes more important, et
cetera.
And his point was, you know, you've
already got 2.2 million people.
You've already got a culture that when it,
when it's
carried out correctly at store level, this
DNA results in good customer service.
You've already got the physical supply
chain.
What you don't have is the code, and the
code's easier to write than it is
to go build all the physical assets that
you already have.
And I think there's a lot of truth in
that.
>> Hm.
>> So I, it will come back to people, the
way people are treated and, and in turn,
how they serve customers, whether it's
through some sort of digital experience or
it's a phone bank or it's the text
response they send back to you or
it's the person, in person contact you
have with someone in a store.
Those things are still gonna matter.
So our culture has got to be even stronger
in the future as we grow than it's
been in the past.
>> There's so much more we could touch on
the future of Walmart, and technology, and
markets abroad.
But I'd actually like to shift a little
bit now and
focus on your career specifically.
And the leadership lessons that you might
have to share with the MBAs
in the audience.
One of the things that Dean Rajan
mentioned is that you spent nearly your
entire career at Walmart, and
I think many of the MBAs in the audience
have already had three or four employers.
So I'm curious, what's kept you at Walmart
for so long?
>> It's challenging.
And I mentioned before I didn't plan on
doing this.
I certainly didn't plan on retail.
When I was 16 my dad moved our family to
northwest Arkansas to start a dental
practice.
And I went to say goodbye to my girlfriend
which I thought was the end of the world
cuz I thought she was it.
And I'm standing in her driveway they're
probably both crying or whatever,
you know and her dad walks out and he says
so what's going on?
And I said we're moving to this little
town called Bentonville.
I've never heard of it.
I don't wanna go there.
My dad's making me.
I'm not happy, I'll be back.
And he said you're gonna end up working
for Sam Walton.
And I said who?
And he said well you shop at Walmart,
don't you?
And I said yeah.
And
he goes well you're gonna end up working
for
that company because that's all their is
in Bentonville.
>> [LAUGH]
>> Turns out that was true.
>> [LAUGH].
>> Literally all there was when I
moved to, when we moved to that town there
was one stoplight, there was a McDonald's,
one pizza joint and Walmart was it.
And so, you start hearing about Sam
Walton, and you, it was a little town so
you'd run into him or run into other
people just, you know, being there.
And I needed a summer job.
So, the warehouse was hiring at 6.50 an
hour and,
and, I took that job because it paid more
than McDonald's.
But I ended up meeting this guy the day
that I started,
it was summertime, it was hot.
And there was this guy named Johnny
unloading trucks with me and
Johnny was bragging about having $200,000
in profit sharing.
And I thought, whoa, this dude unloads
trucks.
He doesn't even have a shirt on [LAUGH].
Maybe I need to pay attention to where I
am, you know.
And you connect all the dots.
What I learned about retail is it's really
hard.
It's really challenging.
It's a narrow margin business, you have
customers to deal with.
You've got to think about marketing,
merchandising, operations, logistics,
finance, legal, real estate, compliance,
ethics,
culture, global business, now technology.
You know, I, I meet young people who are
excited to be in the Valley and
I come out here quite a bit these days and
the start up thing sounds cool to me but
I haven't heard one yet that is more
challenging than what we're trying to do.
I mean if you want hard.
Try to take a 52-year-old business that's
at this size and change it.
That's hard.
And it's worthy.
I mean creating a situation where 2.2
million people stay employed,
and have a life.
That's a big deal.
So, if you wanna work at Walmart, give me
a call.
[LAUGH] I promise you it'll be hard.
>> One of the, you may get some emails
now, be careful.
One of the interesting things about your
career,
is you're the youngest CEO that Walmart's
had since Sam Walton.
And you've risen very quickly through the
ladder.
Starting with unloading trucks to now
being CEO.
To what do you attribute the fact that you
rose so
quickly through the ranks at Walmart?
>> Well I'm not the only one.
I mean I ended up in this job so you know
people pay attention to it.
But if you were inside our company you
would meet many,
many, many people who've had opportunities
and
a lot of people who say I didn't want to
be at Walmart, I just wanted a job.
Or I needed to pay my way through school
or whatever
and they end up being here 20 or more
years.
What was your question?
How did it happen?
[LAUGH]
>> Yeah why?
>> I'm still trying to figure that out.
It was a step at a time, you know?
I loved merchandising, I fell into a
situation where the challenge of the work
was something I really liked, so I ended
up getting together with Sam's Club,
I've actually been at international twice,
then was given the opportunity to lead our
international business and
each one of those steps kind of prepared
me for the next.
But if I had to answer it in one word,
I would say, I think it's just because I
love it.
>> Mm.
>> I really like it, and I'm still
learning a lot.
And so I think that the company needs us,
this current leadership group, to respect
the past.
And to not forget the things that made the
company special.
And to be very selective about what we
carry forward.
So, you know, does that distribution
center the way it works
provide value to society, to our business,
to the customer in the future.
If it does keep it, if it doesn't get rid
of it.
That kind of attitude, forward looking,
willing to change.
I did not work for Sam Walton personally,
I didn't get to know him a lot but
I was around him a few times and got to
talk to him a couple of times and he,
if he were here, would be driving change.
I mentioned earlier, if this were, if
there are a few Walmart people here,
if you say to Walmart people, the only
thing that's constant, they say, change.
That's a great platform to operate off of.
It gives you the freedom to go do things
differently and that keeps it exciting.
>> I mean it's clear your excitement for
working at Walmart, but
one of the things you haven't mentioned
is, kind of surprises me,
is that you haven't talked about the role
of ambition in your career at Walmart.
You know because it wasn't, staying at
Walmart wasn't part of you know,
your calculus when you joined and that,
you know, aiming for
the top job wasn't necessarily something
that you were looking for.
>> I wanted to be chief merchant someday.
That was my aspiration.
I was a buyer and loved merchandising, and
I kind of overshot it.
[LAUGH]
>> When did, when did that change and
what, what caused that change?
Well I was, I was a chief merchant at
Sam's Club and I worked for
a guy named Kevin Turner, who was our
chief information officer and,
and he got promoted to run Sam's.
We were both in our 30s.
And Microsoft recruited him away, and
Kevin's currently the chief operating
officer at Microsoft.
So when he left Lee Scott was our CEO, and
Lee, Lee came over and he said hey, you're
about to hear, in the next day or so, that
Kevin is leaving to go to Microsoft.
We'll, we'll be putting someone new in
Sam's Club.
It probably won't be you.
I'm sure you're good with that.
I said, yeah, I love my job, and whoever
you send over here, I'll help.
And he said okay.
So a few days go by and he comes back and
he says we thought about and
we really don't have anybody else we want
to put over here so
you get to be the CEO of Sam's Club.
[LAUGH] It's true, that's how he said it.
Lee, Lee's [UNKNOWN].
I could tell you a lot of these Scott
stories.
But that's, that's how that happened.
So that forced me to learn a lot about
things other than merchandising.
And if I hadn't been given that
opportunity,
I probably would not have been given the
opportunity to, to lead international.
Which was the most mind-blowing experience
ever.
I mean, yeah, I'm a kid from Arkansas, and
certainly I've traveled a lot.
Sourcing and buying stuff I've traveled
around the world for
a long time now, but to be responsible for
a business in 26 countries that's $140
billion with 700,000 people in it and get
to enter Africa and
get to deal with some of the complexity of
that is just extraordinary.
Really blessed.
>> Actually I'd like to talk a little bit
more about
the role of travel in your career.
You know, one of the core Walmart
management philosophies is CBWA.
Which is Coaching By Walking Around.
The idea that managers need to interact
with associates and
problem solve on the, on the store floor.
But when you're running an international
business.
You have employees, you have associates
all over the, the world.
How did you balance trying to efficiently
run a global organization,
when you led the international business,
with the need to be physically present in
all of those different locations?
>> Yeah.
Well, first of all.
You, you can't be everywhere.
So you have to have great people.
>> Mm-hm.
>> And we have a deep team.
We've got talent in the all the markets.
You know, that, that we're proud of.
But there is no replacement for really
understanding the businesses.
So I traveled for five years, you know, a
lot.
And loved it.
Enjoyed being on the ground.
I've been to places I never really thought
I would have or ever get to go to.
You go into stores in Nigeria that are
ours wow, what an experience.
All over Latin America.
We learned a lot about China.
Don't profess to understand China, but
I've been there a lot and,
and I'm fascinated by it.
So you have, you have to be there.
>> Mm-hm.
>> But my responsibility was,
you know, do we have the right management
talent at the top?
Do we have the right culture within that
organization.
And I do spend a lot of time talking about
culture.
Are we positioned to win?
Are they getting the resources that they
need?
And, and what I ended up doing in the role
that I had is to get our leadership team
to focus on the things that we had in
common.
>> Mm, hm.
>> Maybe this is a good way to
to answer the question.
When I moved into the job everybody told
me,
you really need to understand what's
different.
You got to focus on the local differences,
don't try to run it from here.
I think some of the lessons from Germany
were probably playing out in that,
in that direction.
But after doing it for five years, all I
can tell you is everybody's the same.
People around the world are thinking about
the same things.
They're thinking about their family,
they're thinking about their career,
they're thinking about, you know, the
vacation they're gonna take,
they're reading a lot of the same media.
They're, they're, we are more and more the
same.
Even during the five years that I was
international, I could see a difference
in people and, I mean, I remember one
morning getting up in Japan and
reading the same news story I read the day
before in the US about Angelina Jolie.
I'm like okay, we're all on the same page
here but.
>> [LAUGH].
>> Products are becoming more the same.
And the last year I was international, I
started asking people when I was in
a store, I did it once in Costa Rica for
example,
I would say show me something that is
uniquely Costa Rican in this store.
And they would look at each other and say,
okay.
So they took you over to this bottle that
was labeled salsa.
It looked like A1 sauce.
>> [LAUGH].
>> And when I turned it around,
it said Unilever on the back.
And people just increasingly had a hard
time showing me anything that,
that you need.
Now, local produce, locally grown product,
things that are, you know,
produced really near a store still matter
and we wanna source those things.
But I can see kind of a global wave of
commonality happening and
that was fascinating.
>> Wow.
You mention one of the things that is
common,
people you meet all around the world, is
they're,
everybody's thinking about work and family
and trying to balance these things.
And I'm curious especially cuz you had a
career that involved so
much international travel, and so much
responsibility.
I think that many of the MBAs in the
audience are also thinking about how to
balance their careers with other
obligations they have in their life.
>> Yeah.
>> So, I'm curious, you know,
what have you learned to try and make that
balance work,
cause you have a family and sons in
Denville.
And, you know, how, what advice do you
have to give to MBAs who kind of been
embarking on trying to start that, figure
out that balance after they graduate?
>> Well, I think it's personal, and you
guys have to solve it for
yourselves based on what's important to
you.
For me, life came in phases.
So there's a period of time where my kids
were little.
Shelly and I have two boys, and I did not
want to miss like those little three on
three soccer strums with the six year
olds, you know?
So being there at that age mattered a lot.
By the time I was responsible for
international, my boys were teenagers and
they were like, you've been gone, dad?
I mean, didn't miss me that much.
[LAUGH] It was very different then when
they were in elementary school and stuff.
So, there's probably a time and a place
for everything and
you just need to manage that.
Pay attention to it.
Pay attention to yourself.
You know, are you getting the right rest?
Are you taking care of your body?
Are you right minded in, in,
in the jobs that you're gonna have your
decisions will really matter.
So you've got to be prepared to make
important decisions and
you can't do that if you're exhausted, at
least you won't do it very well.
So I think you need to know yourself and
know what's important to you whether it's
family or faith or whatever it is.
You've got to, you've got to be right.
>> On that note, in making important
decisions as, you know,
CEO of the world's largest company, your
decisions have a lot of weight.
They affect a lot of people.
There's a lot of, just, big dollar amounts
at play here.
Can you tell us a story of a difficult
decision that you've had to make over
the course of your career?
>> Yeah, yeah.
I mean, just the round of decisions we got
through making and announcing last
Thursday are the first things that come to
mind, because they're recent.
The, the importance of having great people
around you,
a good team that can help you think about
an issue,
you will not face very many things where
you have 100% of the knowledge.
And the image that pops into my mind all
the time.
We were having this conversation yesterday
with the leadership team about
the future of our supply chain.
>> Hm.
>> And we had e-commerce leaders and
people who were steeped in logistics in
the room.
And what you literally saw play out, on a
whiteboard,
is people putting pieces of a puzzle
together.
And the people that had been doing it for
a long time said here's what it looks
like.
And the e-commerce people said yes, but
you're missing this piece.
And then another person said, what if we
do this?
And all of the sudden a picture emerged on
the board of the future of our
supply chain that was better than it would
have been with any individual.
So, in this latest reign set of changes
that we've made,
there were different people, people from
within our HR or
people area that contributed to training
in a big way.
There were other people who said, for
us to run great stores we've gotta change
the structure.
There were other people that said you
know, the starting
wage needs to be really thought out and
here's how we should think about it.
And, when people make great decisions, you
just need to let them.
>> Mm-hm.
>> You know,
I don't make every decision in Walmart,
don't wanna make every decision in
Walmart.
If I do my job well,
I'm not making very many decisions because
the team is doing it.
But every once in a while, I've got to
make some and they better be right, and
I need to have listened to others to, to
try and sort it out.
Many of them are unclear.
By the time they get to my desk, if they
were easy,
somebody else would have solved them.
So knowing sometimes this isn't gonna get
any clearer, there's more,
there's no more data that will help me
make this decision.
I'm just gonna have to go with my gut.
You have to do that sometimes.
>> Well.
I have a lot more that I could ask.
A lot more things I'm curious about but
I want to make sure that we give our
audience a chance to ask some questions.
I think we'll start with a question from
Twitter.
>> What do you think the future of the US
grocery market will be in five to ten
years and more specifically,
are you worried about the rise of the
discount stores?
>> Future of grocery, that's a big
question.
I, I think grocery will be more food, will
be more focused on quality.
In some ways, it will be more local,
definitely there's huge trend towards,
you know, organic and gluten-free.
That's where the growth is.
And quality, the way you handle the supply
chain, the way produce is handled all
the way through the process is going to be
increasingly important.
I do think grocery home delivery will play
a role, although I don't think it'll
be in the United States more than 10% of
business anytime soon.
In the UK, we've been doing grocery home
delivery for 15 years and
it's, it's still well under 10% of our
business.
Picking up your groceries in the parking
lot or at an offsite pickup location,
that will happen, and is happening.
We've got experience with that in the UK.
You may have read we recently announced
some pilots here in the US for
grocery pickup and grocery delivery in
Denver and Phoenix, some other places.
So, we've got testing going on.
The way customers will take product will
be different than what they've
done in the past.
We got a a pick up location we opened in
Bentonville last year
where you can't go in the store and shop.
You order on your mobile device ahead of
time and you just go through and drive
into a slot and we put it in your trunk
for you, and that test is going well.
And Dan just reported to me his wife had
an experience today.
And no substitutions and less than a five
minute wait, so
we're making progress on learning how to
do that.
So, grocery is gonna change.
I think we've got the team to help sort it
out.
We don't have the reputation that we want
to have today for quality.
That's a big area of focus but it's
achievable.
>> Okay.
Let's go here first.
[BLANK_AUDIO]
>> Hi.
I'm Ben.
I'm an MBA one here.
First of all, thanks so much for coming
to, to speak with us.
So there was a report released last year
that said US taxpayers subsidized Walmart
to the tune of $6.2 billion in food stamps
Medicaid, welfare.
I guess, how do you respond to the, the
critics who, who are saying, you know,
whether it's 6 billion or 3 billion or
whatever the number is.
Biggest country in the world, the
wealthiest family in the country should be
paying it's workers and not that, that
money doesn't need to be there at all.
>> Yeah, I understand the criticism.
First thing that comes to mind is, we pay
almost 2 percent of the corporate taxes in
the country, so I don't feel very
subsidized, okay?
[LAUGH] But the issue you're raising, it
goes to respect and
it goes to opportunity.
And what I was talking about earlier is
how I feel about it.
We're a company that gives people an
opportunity to go do more.
Now where we put that first rung on the
ladder matters, and
I don't know the statistics about how many
Walmart associates
are currently on government assistance,
but we don't want any of them to be on
government assistance, because we want
them to be able to move up that ladder.
You know, we wanna set that first ladder
in the, in the right.
First rung on the ladder in the right
place.
So we think about things like healthcare
and accessibility to healthcare.
Starting wage rate.
What we do with a 401K program.
So that people who can save have an
opportunity to save.
Helping them with an education.
Helping them get their GED if they don't
have it.
Providing skills for people who are
learning English as their second language.
We're trying to create that meritocracy
that I described.
And I think the decision we made most
recently to put a billion dollars into our
U.S. associates is an indication that we
do care, and that we are listening.
And, you know, we're always gonna have
critics, and
critics have their own agenda.
I don't expect to ever escape that.
But if our associates and our customers
know that we have good hearts and
that we are well intentioned and that we
are taking action in the right direction.
I think we will be in good shape.
>> Hi I'm Daniel.
Is this working?
There we go.
I'm Daniel, I'm an MBA1 as well, I'm
interested to here you talk about
outside scrutiny both from a media
perspective and
also from the Wall Street stock analyst
perspective.
As CEO, you know, you're the steward of
shareholder value obviously.
Over the long term you're probably never
have the New York Times and
you'll always have Fox news in your corner
>> I doubt it,
if they [UNKNOWN] anybody in our corner
that'd be great.
>> So, who, who knows.
But so, in more recent times,
we've obviously seen this incredibly
exciting announcement.
As an avid Wal-Mart customer, you know,
I'm very appreciative of what you've done
for your employees, but every single press
announcement has also said, and
the decision coming after 6 quarters of
same store sales being down.
Right?
What link, you know, is, is this coming
because as a management team you have to
be really sensitive to what the street is
saying, and what the press is saying.
Or at the end of the day do you have to
take a 52 year view or a 152 year view and
say, they'll always be critical to us in
cycles, and
we have to keep our eyes on the prize.
>> That's a.
Keep, keeping your eyes, your eye on the
prize and
thinking a bit longer term is the way we
feel about it.
And you mentioned the Walton family.
One of the benefits of having the Walton
family own as much of the company as
they do, is that you get to take a long
term view.
So this is a family who benefitted greatly
from the creation of Walmart.
Who cares about our culture, cares about
our associate, cares about sustainability.
So we have a Board of Directors including
our Chairman Rob Walton, who asks us to
think about the long term and to do what's
right for the business for the long term.
So sometimes, I will say, something like.
A big part of my job is to help position
the company to be here 50 years from now.
I'll never make it in this job anything
near 50 years.
So, really I'm worried probably about the
next 10, you know, in a more tangible way.
So whether it's the investment in people
or the investments in technology.
I mean we, everybody knows we're losing
money in e-commerce in the short term
to build capabilities that will help us in
the long term.
That mindset is vital.
And it's vital to surviving.
If you look at the history of retail,
you could take a snapshot of the top 10
retailers in the world by decade, and
I carry this around on a PDF on my phone
to remind me-- it changes a lot, and fast.
So you'll see a company like JC Penny or
Sears, or
others who rise to a top spot and then
they fall.
Big challenge at Wal-Mart is to be
relevant in a way for
customers, such that we can grow five
years from now and ten years from now.
Because history is actually against us.
But the advantage that we have is that we
can think long term.
And we have resources.
If you make the right choices, invest in
the right places, you can do it.
But these choices do matter.
>> Hi, Emily, I'm Rose.
Thanks much for coming to speak with us.
I'm really interested in hearing how you
think about Walmart relative to Amazon.
So, what scares you about Amazon?
How do you think Walmart competes with
Amazon?
And, ultimately, how do you think Walmart
beats Amazon?
[BLANK_AUDIO].
>> Is Jeff here?
>> [LAUGH].
>> [LAUGH].
The way that I was taught to think about
competition in Walmart
is that you should do everything you can
to learn from them.
So, you can feel threatened by a great
competitor if you wanted to, but
it's actually more productive to think
about.
What are they doing that the customer
likes that we can learn from.
And I think Amazon and
others have shown us that the customer
wanted access to a broader assortment.
They love being able to do it in an easy
way.
You know, doing it online and increasingly
mobile has much less friction than
getting in your car and driving to a store
when you don't want to.
So we-, we've been thinking about these
four different dimensions.
The first one I might call it as the
breadth of assortment, and when we started
opening super centers Scott, 120,000 SKUs
versus a grocery store or
a category killer, it, it, it out assorted
those competitors.
You could do one-stop shopping more
effectively, so
we're winning on assortment.
But now the Internet's changed what
assortment means, and
assortment looks more like tens of
millions of items than 120,000 items.
Value's different, price transparency's
increased.
Access is different.
You can get more delivered,
you can pick more up in the future than
you did in the past.
And then the experience has changed.
You know,
we have a lot of customers that are using
a home devices on the floor of our store.
They're using it for navigation, they're
using to search, they're using it
to buy an item they couldn't find in the
toy department when they were looking for
it, those kinds of things so the way we
ultimately win against anybody.
Is we work across those four dimensions in
a way that's unique,
leveraging the supply chain and the assets
we have, so that we end up giving
customers a better value across a broader
assortment, and help them save time, and
hopefully surprise and delight them with a
couple of things along the way.
So the investment digital matters and
the way we put it together with stores is
how we'll win.
Next question from Twitter, perhaps.
>> So you mentioned that going into
national is very hard,
one of your biggest investments has been
in [UNKNOWN] which is a UK grocery market.
How successful do you think that
investment has been and
how do you think [UNKNOWN] will fare going
forward?
In the changing retail landscape in the
U.K..
>> Yeah.
I didn't answer the second part of
the discounter question, and, in the U.K.
is, certainly seeing all the unleadle and
the discounters do very well.
So, we feel their presence as it relates
to Asda and our business in the UK.
By the way, if you don't know, we've got.
Over 50 different retail brands around the
world and in the U.K.
where known as, as [UNKNOWN].
So what we have to do in that circumstance
is to make sure that our opening
price points, the entry level price points
into each category, are strong and
the quality is right.
Then we have to offer service,
or assortment with a premium product that,
enables us to win on assortment.
So, going back to those competitive
dimensions that I was just describing,
some combination of those four for applied
in a market delivers the winning formula.
And we may have to tweak it here and there
depending on what customers are,
are offered from competition in a
particular market.
Azda's been a great investment terrific
talent.
Our current Walmart US chief operating
officer is British,
her name is Judith McKenna and she's now
responsible for 1.3 million US associates,
which is fun, because she uses British
phrases that most of us don't understand.
We're teaching a new form of English, but
you know,
this acquisition has been one of our
better ones.
Yeah.
>> Hi my name is Mihay Russ and I'm an MBA
too.
You talked about e-commerce and the
importance of the digital platforms and I
was wondering if you could elaborate a bit
more about your omni-channel strategy and
how do you plan on breaking the
organizational silos
in a 52 year old organization where your
e-commerce department and
your retail branch are so far apart.
>> Yeah.
That's hard.
We've got some members of our e-commerce
team here now.
And if, if you asked, you know, what could
threaten Walmart,
one of the answer I would give you is
internal ways of working.
We have new ideas that may emerge from
California but we have knowledge and
experience in, in our core business a lot
of it in our home office in Bentonville.
And how do you get those people to work
together in such a way that the outcome's
better than it would have been
individually.
That's one of our big challenges.
So, we, we currently have some work
underway to look at incentive alignment
and how strategies are pulled together to
make sure that they are cohesive and
do work together.
A lot of it boils down to trust and
relationships and people being willing,
willing to listen to each other.
So, I was talking to somebody recently,
and.
And they are on one side of the house.
But don't cross both sides.
And I said, you know, you may have 80% of
that figured out.
The problem is, I don't know which 80%.
And neither do you.
The other person in the room may know the
other 20.
Your job is to help communicate what you
think about the 80, but also listen.
So that you can find the other 20.
And, attitudinally, that's kind of what we
need from our leadership team
right now and I think we're generally
getting there, but
there's some things we need to do to make
it easier so that it doesn't feel like it
takes decision by consensus, which can
kill you because speed matters too.
So if you worked inside Walmart today,
this would be one of the hot topics.
There's a phrase that's emerged this year.
Who owns the d?
Which means, ultimately who is the
decision maker,
because people wanna know so they can move
with speed.
And I'm trying to help us figure out how
do we move with speed but
also use the appropriate collective
wisdom.
Marissa Myer is on our board and
we were talking in board meeting about
this a while back.
And she said something like, you know,
within our business there may be,
just making this up, eight people who
should really weigh in on a decision.
And sometimes we seek feedback from 40.
And I'm just gonna quit worrying about the
40.
Worry about the eight, make the decision
and get moving.
And if the other 32 have something to
contribute,
they'll have to jump in front of the bus
and try to stop us.
Because we gotta keep moving.
And it feels like within Walmart too.
We gotta get the right few people in the
room to make the best decision and
then get on with it.
And in a business of our size and our age
that's a challenge.
Great question.
>> Another one up front.
>> Hi.
I'm Nathalie,
I'm a first year medical student.
And I'm really interesting in the rise of
retail health.
Walmart is clearly a big player in this
space.
So I was just wondering if you could
comment
on the future of Walmart with regards to
breaking into the health care industry?
>> Yeah, the healthcare industry looks
complicated from here.
[LAUGH] We are just a retailer,
but the long standing pharmacy and optical
businesses that we've had,
we've got some Sam's Clubs that do a judge
out with hearing and hearing aids.
Clinics we are, are doing.
We've tried several things with clean,
clinics.
Third parties, partnering at hospitals
in some cases doing more of the
infrastructure on our own.
Our customers want it.
Because they want affordable healthcare
that's accessible and easy.
And so I think what you'll see us do is
continue to slowly move into healthcare.
In the appropriate ways and
a way that serves customers and helps us
with traffic, but
I think we should be very thoughtful and
cautious as it relates to what we do
to make sure that what we deliver builds
trust with customers.
If we rushed into clinics and tried to put
them in too many stores too fast,
I'm certain the quality wouldn't be what
we need it to be.
So who we partner with and how we go about
it matters.
And we're learning, and
we'll keep moving that direction because
we think our customers want us to.
>> Healthcare's complicated up close, too.
I think we have time to one more audience
question in the back corner here.
Hi, I'm Nadine, I'm MA1.
You mentioned the Walton family's
commitment to sustainability, and
I was wondering how you thought that has
played out at Walmart.
If it ever doesn't make short term
business sense, and
how some of those decisions might play out
in a company that doesn't have that kind
of family commitment and ability to think
long term.
>> Yeah.
One example would be capital investment.
So if you think about, renewable energy,
I think we're at about 28% renewable
energy globally at the moment.
Around the world, some markets are ahead
of others.
Mexico is actually one of our leaders in
this space.
They do a great job with renewables.
Capital investment in LED lighting in a
store for example, which might have
a higher upfront level of investment, but
pay back over a period of time.
We're very comfortable making that kind of
decision, so.
We were the first retailer to go to China
with LED lighting, for example.
What we invest, related to refrigeration
and
the type of refrigeration that cuts down
on greenhouse gases,
that has a little bit of a short term
negative impact,
maybe more than a little bit, but we do it
for those reasons that you decided.
So I think that's an example of where long
term disposition helps and
that does ultimately flow back to our
board of directors.
>> I'd like to conclude by asking a
question that has become a bit of
a tradition here at Stanford.
All of the MBAs in the audience will have
answered this question as part of their
applications to the GSB.
What matters most to you and why?
>> Oh.
>> [LAUGH]
>> I'm still trying to
please my grandmother.
[LAUGH]
>> [LAUGH]
>> That was a little too
personal, wasn't it?
>> [LAUGH]
>> That's probably true.
And my, you know my family matters a lot.
>> Mm-hm.
>> So the faith, family matter a lot to
me.
I'm also a very competitive person and I
like to win.
And falling into Walmart has just been a,
more than I could have ever dreamt.
So I, you know, I don't know what you guys
are all gonna go do but
I hope you find a place where you know
you're in the right spot.
And if you're not move and go somewhere
else.
We will probably all eventually end up at
Walmart which would be fine.
[LAUGH].
>> Well thank you for ending up at
Stanford.
It has been a pleasure to host you.
Please join me in thanking Doug for
joining us here today.
[APPLAUSE].
>> Thanks.
>> Thank you.
[MUSIC]
