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Self-serving autobio of a truly great entrepreneur
on 28 August 2011
Walton's story is certainly worth reading. He built a business - now the biggest in the world - that can only be described as the work of a genius.
The great virtue of this book is the portrait of his mind: he was utterly obsessed with retailing and bent a truly formidable energy to think about it at almost every working hour of the day. It may sound corny, but he reminds me of Miles Davis, who lived, breathed and ate his music. Walton looked at things from every angle, learning as he worked and unafraid to walk into a competitor's office unannounced with a tennis racket to talk. He was a showman and true believer, but also focused maniacally on operations and implementation. (About this, he pontificates about his competitors enjoying the trappings of success to the detriment of their attention to business - surely this is true in some cases, but repeatedly hearing it gets a bit boring.)
The business model he created is simple: always offer the lowest price possible, depending on higher volume to generate higher profit. The second pillar was to relentlessly pursue logistical superiority, in both a distribution system and computer-aided controls, enabling Wal-Mart to continually enhance its efficiency and speed of delivery. As the company grew, it was able to use its power to force suppliers to sell at ever-lower prices. Its stores spread slowly, oozing out like molasses, always supported by the distribution system. The third pillar, which in my opinion is exaggerated to the point of self-delusion, is the "family" aspect of employees (or "associates"), both as members of a store and in relation to customers. Certainly there is something to that, but it is far more limited than he seems to be aware of. Throughout, Walton offers many invaluable recommendations for business men and entrepreneurs. THere is no question he was one of the best.
The great failure of the book is Walton's inability to reflect on the impact of his company. Rather than taking the arguments of critics to heart honestly in the slightest, he dismisses them as people who moved to cities and are merely nostalgic about their childhoods in rural towns that have changed in no way because of his business practices. He also refuses to contemplate the impact of his company's power to act as a monopsony (sole buyer), forcing conditions on suppliers that can ruin them. That is one of the great changes in 20C capitalism: the shift of power of retailers to the detriment of manufacturers and suppliers, which Wal-Mart pioneered. Finally, he views unions exclusively as divisive influences rather than legitimate players and potential allies. In this, he shows little realistic empathy whatsoever regarding employees who don't appreciate their position or treatment in his stores.
Walton appears to believe in his own myth and he presents it well: his tone is down home, expresses a genuine Christian humility, and believes in small-town values. Fair enough, but there are many who see things differently. I suppose that that self-serving tunnel vision and absolute confidence in the system he created is part of his entrepreneurial genius, but it is also a clear statement on its limits.
Recommended. This is on a par with Ray Kroc's autobio and will interest all students of business.