Winds Of
Change At Walmart?
1 December
2013
Copyright
© 2013 – Mark “W” for It’s Not Sam’s Walmart
This past week, Walmart’s Board Of Directors
spoke, and it was loud and clear.
Clearly, the Executive Leadership of Walmart Stores Inc., has lost their
confidence in Mike Duke’s leadership of the world’s largest retailer, and has
picked a proven performer to take the helm to right the ship.
Duke is out on January 31, 2014, the end of a
dismal fiscal year for Walmart Stores Inc., which thus far has consisted as
three quarters of sales declines, with more than likely the last quarter also
showing a decline.
Duke’s reign has been the most disappointing in
Walmart’s history. It has been a reign
of embarrassment, with the scandals in Mexico
and India,
a failed transformation of the retailer, loss of consumer confidence, increased
associate dissatisfaction and turnover, marked increase in union activities,
and Walmart’s image, damaged.
In Duke’s place, a Walmart veteran and leader of
the retailer’s International Division, Mr. Doug McMillon, will take over on
February 1st.
Mr. McMillion has a daunting task ahead of him,
but given the fact he has grown up in Walmart, starting as a teenager in the Bentonville Distribution Center,
may not be as daunting as some state.
Mr. McMillion’s first sixty days will set the
tone for Walmart.
Continuing down the Duke vision of Walmart path
is not an option.
Mr. McMillion will need to address Walmart’s
image, resolve the scandals that have rocked the Duke Dynasty, and turn the
sales around.
Difficult?
Yes.
Impossible?
No.
It is a simple as restoring the beliefs, values, and vision, Mr. Sam
has of his company.
Steps Mr. McMillion will need to take in those
initial days are outlined here in a nutshell.
- Lawaway – One of the things Duke thought was that Layaway was a boat anchor, something of the past that needed to go away. Thus in 2005, Duke got his way. Duke’s thinking was Walmart Layaway customers could qualify for the Walmart branded credit cards issued by GE. Not a good plan. For the few former layaway customers that could qualify, they were met with something layaway did not have, a high interest rate. Duke attempted to revive a version of layaway over the past few holiday seasons, though it was highly restricted. Many have stated that Duke’s decision to squash layaway is one of only reasons K-Mart remains a going concern, especially since the economic depression of 2008 struck.
Restoring layaway
to each Walmart location will bring an immediate benefit of millions of dollars
of added sales, and add additional jobs.
- Stocked Shelves – Another Duke Dynasty failure, the decision to reduce inventory levels in the Distribution Centers.
Walmart is, by
design, a high inventory turn company.
Mr. Sam always
worked in quantity, sell a lot more, for a lot less, and make profits.
Mr. Duke’s
reduction in inventories also does something else that those of us with
business expertise know, free up cash, a signal (that most dismissed) that
there could be a cash flow issue. Was
there? We may never know.
Increasing
inventory levels on hand in the Distribution Centers will insure “outs” as
items not in stock on the shelves are called, will decrease. A decrease in outs, not only begins to
restore Customer Confidence and reduce Customer Defections, it will also
increase sales.
- Staffing Changes – No one doubts that Walmart needs a serious change in staffing.
Not just an
increase in staffing at the hourly levels, but a better quality of
associates. Duke’s Dynasty chased off
hoards of experienced Walmart associates, many with 10, 15, 20, 25, or more
years of service. Experience equals
Sales, lack of experienced staff equals lost sales.
Mr. McMillion needs
to reach out to these former associates and invite them back!
Additionally, during
Duke’s Dynasty, Walmart has become a top heavy company, with more salaried
employees being added, at the cost of hourly employees.
Besides increasing
hourly associates, both at entry and entry level management positions,
Walmart’s so-called “Customer Friendly” scheduling system must be
dismantled. This system makes scheduling
decisions at the corporate level, not store level. Store Management teams should be writing the
schedules, not computers in Bentonville.
Additionally, Walmart must go back to scheduling that meets associate’s
availability.
Lastly, all
associates least favorite application, the “Task Manager” should be retired,
period.
No two associates
work alike, it is wrong for another computer program to determine how much time
it should take to stock a department, especially when the system is
fundamentally flawed.
- Clean Up The House – Those who have conceived and followed in Duke’s vision of Walmart must go. Many will be jumping ship ahead of February 1st, but many others will try to cling on.
This cleaning
process must also reach throughout the company, to entrenched Market District
Managers who’s stores are underperforming.
Store Directors/Managers, Shift Managers, Assistant Managers who are
either underperforming or simply should not be holding the positions they are
in. Hourly employees that are not
Customer Service oriented, need to go.
While cleaning up
the house, we need to return door greeters to the doors, and get rid of the
walmart dress code rules, and get staff back in those namesake vests.
- Renovations – Renovations must resume. Duke’s Dynasty has taken the renovation process from once every four to five years, to just touch up work. Hint, Hint, this is something K-Mart started doing long ago to conserve cash. This move has made some stores look like something barely better than K-Mart, and in a few cases, worse than K-Mart.
- Say Goodbye To The Spark! – The Walmart logo and Spark are perhaps the two items that mark the failures of the Duke Dynasty at Walmart. It is time to return the original Wal-Mart logos to each and every store, and the “Always” slogan.
These initial steps start Walmart down the path
of restoring the beliefs, values, and vision, Mr. Sam has of his company.
In addition, these steps will benefit Walmart, by
increasing Customer Confidence and Sales, Improving Walmart’s Image, and
decrease unwanted union involvement, just to name a few.
“Winds
Of Change At Walmart?” is copyrighted © 2013 by Mark “W” & It’s Not Sam’s
Walmart
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