Winds Of Change At Walmart???

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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