MW10 • THEEDGE MALAYSIA | MANAGER@WORK | AUGUST 28, 2006

MANAGEMENT BOOKS BESTSELLERS The 10 Rules of Sam : Success AMAZON.COM’S TOP 10 Secrets for Remarkable Results SSamam WWalton’salton’s 1100 rrulesules 1. Good to Great: Why Some Companies Make the Leap... By Michael Bergdahl for entrepreneurial success And Others Don’t — Jim Collins ISBN: 0-4717-4812-9 2. Blink: The Power of Thinking Without Thinking PUBLISHER & YEAR: JOHN & SONS, JUNE 2006 COMMIT to achieving success and always be passionate — Malcolm Gladwell SHARE SUCCESS with those who have helped you 3. The Power of You! How You Can Create Happiness, Balance and Wealth — Scott Martineau S-based Wal-Mart is the most successful retail MOTIVATE yourself and others to achieve your dreams 4. Now, Discover Your Strengths — Marcus Buckingham chain in history. In “Wal-Mart in Asia”, an INSEAD COMMUNICATE with people and show you care case study, authors Philippe Lasserre and Neil 5. The Five Dysfunctions of a Team: A Leadership Fable Jones say that if Wal-Mart were a country, it’d be APPRECIATE and recognise people for their efforts and results — Patrick M. Lencioni ’s eighth largest trading partner, ahead even 6. Getting to Yes: Negotiating Agreement Without Giving In CELEBRATE your own and others’ accomplishments — Roger Fisher of the UK. But with success has come fi erce criticism. U 7. Good to Great and the Social Sectors: A Monograph to Accompany Michael Bergdahl is the former director of people at Wal- LISTEN to others and learn from their ideas Good to Great — Jim Collins Mart’s headquarters in Bentonville, . His fi rst book, EXCEED EXPECTATIONS of customers and others 8. Vital Friends: The People You Can’t Afford to Live Without What I Learned from Sam Walton: How to Compete and Thrive — Tom Rath in a Wal-Mart World, was published by John Wiley and Sons CONTROL EXPENSES and save your way to prosperity 9. Cost Accounting (12th Edition, Charles T Horngren Series in in August 2004. In an e-mail interview with Dorothy Teoh, Accounting) — Charles T Horngren he delves into Wal-Mart’s past — when Sam Walton’s rules SWIM UPSTREAM, be different and challenge the status quo 10. A Guide to the Project Management Body of Knowledge were paramount — and present, and why the retailing behe- (PMBOK Guides, 3rd Edition) — Project Management Institute moth is under fi re — in particular, for its people practices. Note: As at 6.38pm on Aug 21. Amazon.com’s list is updated hourly. goods they sell to Wal-Mart and no more. If a supplier can’t Walton’s 10 Rules must have had strong implications on earn a profi t supplying Wal-Mart, they should either lower MPH’S TOP 10 (AUG 1–15) your role as director of people at Wal-Mart’s corporate their manufacturing costs to become profi table or make 1. Blue Ocean Strategy: How To Create Uncontested Market headquarters. How did they guide you personally during the decision to stop supplying the giant retailer. Supplying Space and Make the Competition Irrelevant your tenure with the company? Wal-Mart can be a manufacturer’s dream come true or its — W Chan Kim & Renee Mauborgne Walton’s high regard for people put a great deal of additional worst nightmare. There are many companies that choose 2. The Rules Of Work — Richard Templar pressure on my role as director of people. At Wal-Mart, not to supply products to Wal-Mart because they cannot Walton called his human resources department the “Peo- achieve their profi t goals. Other companies are too small 3. The Rules of Management — Richard Templar ple Division”. In actuality, Mr Sam (we all called him Mr to supply the insatiable product needs of Wal-Mart. There Sam out of respect) felt that “managing human resources” are companies who choose to supply Wal-Mart whether 4. Secrets of Self-Made Millionaires — Adam Khoo was the responsibility of every manager and supervisor in they make a large profi t or not simply to enhance the vis- the company. He told me that he wouldn’t need a “People ibility of their brand. For those who do supply Wal-Mart, 5. The Toyota Way: 14 Management Principles From the World’s Division” if the management team would use “golden rule” the expectation is that they need to partner with Wal-Mart Greatest Manufacturer — Jeffrey K Liker 6. Freakonomics: A Rogue Economist Explores the Hidden side of values by always treating the employees as business partners to ALWAYS deliver value to the retail customer. In reality, Everything — Steven D Levitt & Stephen J Dubner or “associates”. To this day, Wal-Mart leaders refer to their there are three types of companies that supply products to 7. Trump University Marketing 101: How To Use The Most Powerful employees as associates. While I was there, Walton focused Wal-Mart: those who make a profi t, those who break even Ideas In Marketing to Get More Customers — Don Sexton the “People Division” on staffi ng, training and associate rela- and those who lose money. 8. China CEO — Juan Antonio Fernandez & Laurie Underwood tions. Because he held people in such high regard, it placed a great deal of pressure on everyone in the division to live Six of the 10 Rules are about how to treat people but 9. Execution: The Discipline of Getting Things Done — Larry Bossidy up to his expectations. We focused on three areas: Hiring the among the harshest criticisms that Wal-Mart faces today & Ram Charan with Charles Burck best, providing the best training and being the best place to is that it exploits employees. Why do you think this has 10. Trump University Real Estate 101: Building Wealth with Real Estate work. The cultural mantra at Wal-Mart is “Our People Make happened? Investments — Gary W Eldred the Difference”. This saying was emblazoned across the sides In the US, much of the criticism is brought to the forefront of trucks and posted in the break rooms in the distribution by labour unions and other special interest groups. In the centres and stores. Mr Sam once said, “If you take care of US, union membership has declined from almost 30% of the associates [employees], the associates [employees] will the workforce 30 years ago to 12% today. The labour unions pact Wal-Mart has had on small towns. Adding to the criticism take care of the customers and the business will take care are desperately trying to organise the world’s largest retailer is every retailing sector negatively impacted by Wal-Mart’s of itself.” and failing miserably. In truth, Wal-Mart pays its employees competition. Grocery stores have been unable to compete in a competitive compensation package in retailing, which in- direct competition. Convenience stores have suffered as Wal- Why do you think Wal-Mart is cludes an above-average retail salary, bene- Mart began selling gasoline: Even banks are up in arms over under so much fi re these days? fi ts, annual profi t-sharing, 401K and store Wal-Mart’s announcement that they intend to go into bank- Is it because the current Wal- bonus. When an employee relations ing. Wal-Mart has raised the standard of living for consumers Mart leadership has strayed from issue arises, the unions jump onboard around the globe but in the process, its ‘Every day low prices’ Mr Sam’s 10 Rules? and make a mountain out of a mole (EDLP) strategy has had a devastating impact on high-priced With almost 7,000 stores, 120 distribu- hill! Wal-Mart’s leaders still embrace main-street merchants. For most competitors, competition with tion centres and close to two million em- Mr Sam’s 6 Rules about how people Wal-Mart is like an ant fi ghting an elephant! ployees around the world, maintaining its should be treated. culture is a big challenge. The company will The world is a very different place today from when open over 500 new stores in 14 countries this Why do you think Wal-Mart is so Walton came up with these rules. How applicable are year. It is estimated that 75% of management reviled? Do you think the criticisms they still? A company could follow all these rules but positions today are fi lled via internal promotions, are fair? still not be as successful as Wal-Mart. In fact, we haven’t which leaves 25% of them fi lled with leaders hired In the US, I think much of the seen another Wal-Mart. What could be the missing from outside the company. Many of the negative criticism stems from the im- ingredients? stories in the news media are true. However, Rob Walton, who is chairman of the board of the negative story reported typically repre- Wal-Mart and the son of Sam Walton, wrote sents a single incident in a single store. In the foreword for my book The 10 Rules of Sam these cases, an individual site manager is Walton. He stated, ‘As large as Wal-Mart has be- responsible for a poor decision that has come, we still fi nd ourselves referring to Dad’s led to company-wide media scrutiny. The ‘Rules for a Successful Business’, embodied in way the news is reported, you would think this book.’ The 10 Rules are timeless because the issue reported in the negative story is they are for the most part simple, common systemic across Wal-Mart. Nothing could sense notions. Walton would be the fi rst to tell be further from the truth. you that simple ideas have the best chance of being understood, followed and executed. One criticism of Wal-Mart is that it’s so Walton’s goal was to make Wal-Mart the powerful it forces suppliers to bend to best retailer around, not the biggest. His idea its will or suffer. What would Walton of success was providing the right products have said to this? at the lowest price and providing great serv- Walton was a proponent of the free ice. If the leaders at other companies are enterprise system. The pressure placed willing to focus on running an excellent upon manufacturers and suppliers today operation, treating their people right and is no different than the pressure Walton Bergdahl is holding a baseball serving their customers, they can be just as himself placed on his early suppliers. Wal- bat engraved with his nickname successful. If an ordinary man like Walton Mart’s merchandise buyers expect suppliers — given to him by Sam Walton can achieve the extraordinary, it is possible and manufacturers to earn a fair profi t on the someone else can too. E

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