Heaaah, Maggie!' Sam screams from the cab of his truck. 'Cumoon heaah tuhme!' Up top, Sam'sfriend, Royce Beall, a department store owner from Jacksonville, Texas, chuckles. 'Listen to Sama-hollerin',' he says. 'It don't do no good, but he'll yell all day like that.' "SOUTHPOINT magazine, February 1990By the time 1974 rolled around, I have to admit we were feeling pretty good about ouraccomplishments. By anybody's standards, we had built a heck of a regional discount chain, with justunder 100 Wal-Marts open for business in eight states. We were doing nearly $170 million in sales, withmore than $6 million in profits. The stock had split twice, and we were on the New York StockExchange. By now, everybody was sharing the profits so the whole company was pumped up. WallStreet was buying into our strategy, and whatever reservations anyone up there might have had about me,they seemed to think pretty highly of Ron Mayer and the rest of the management team we had in place.
At fifty-six, I was free and clear of debt. My net worth was far greater than I had ever imagined it couldbe when I started out in the retail business. Our kids were out of college and starting up their own lives. Ireally don't see how I could have reasonably expected much more out of life.
If I've given the impression so far that Wal-Mart has occupied most of my competitive energy over theyears, that's not completely accurate. I've pursued my other passions all along, too, mostly quail huntingand tennisand I pursued them both very competitively. A lot of businessmen seem to prefer golf, but Ialways thought it was a little too country club for me and it took up too much time and wasn't reallycompetitive in the same way that tennis is, you know, in a give-and-take, head-to-head way.
Helen walton:
"When we first met, Sam played golf, but he would get terribly frustrated when he made mistakes. Once,when he was in the Army, he was out playing with some of the officers, and I think their colonel wasalong that day. Sam had hit off into the woods. It made him so mad that he broke his club on a tree. Sohe came home that day, threw his clubs down, and said, 'I've had it with golf.' After that, it was mostlytennis for him."I took my racket with me whenever I was flying, and I had friends to play with when I hit their towns.
For some reason, I loved to play around noonwhen the sun was hottestand I guess I was prettyaggressive. I played regularly from the time we got to Bentonville until about two years ago, when mylegs just couldn't cut it anymore.
GEORGE BILLINGSLEY, TENNIS PARTNER:
"For about ten years, Sam and I played tennis at high noonusually on the court over at his house. I thinkhe liked to play during lunch hour because he wouldn't dream of taking any of his associates away fromtheir jobs to play. On the court, he was the most competitive player. He studied his opponents' games,and he knew our strengths and weaknesses as well as his own. If you hit a ball to Sam's forehand, thatpoint was his. He would hit it crosscourt, and it was over.
"He loved the game. He never gave you a point, and he never quit. But he is a fair man. To him, the rulesof tennis, the rules of business, and the rules of life are all the same, and he follows them. As competitiveas he is, he was a wonderful tennis opponentalways gracious in losing and in winning. If he lost, hewould say, 'I just didn't have it today, but you played marvelously.' "LORETTA BOSS PARKER, POPULARLY KNOWN AS THE VICE PRESIDENT FOR TENNIS:
"If Mr. Walton was out on a trip, his idea of making a tennis date would be to radio our aviationdepartment when he was a few minutes out from landing and have them phone me with a time. I wouldget the call at eleven, find him a partner, and he would be playing by noon."So tennis became my outlet for organized competitive sport and exercise. But my real passion outsideWal-Mart has always been my bird hunting. I have to say it's probably my one self-indulgent activity. Iloved it so much that I just made it part of my way of doing business from early on.
I never did that much quail hunting growing up, not until I met Helen's father, who was dead seriousabout it. Anytime I was around Claremore I loved to go out there and hunt with Mr. Robson, or Helen'sbrothers, Frank and Nick. Her dad and I were both much better than average shots, and we got to bepretty competitive over the hunting.
As I mentioned, Bentonville appealed to me because I could hunt quail seasons in four states. So duringthe season, I usually took off almost every day around three or four in the afternoon and went out to do acouple of hours' hunting. I had an old hunting car I'd haul my dogs in, and I'd go find a farm or ranch Iwanted to hunt. I learned early that the best way to get invited back was to go ask permission and offerthe owner a box of chocolate cherries from the store, or, if he preferred it, a take of the game I shot. I'vehunted all over these hills and valleys around here.
JOHN WALTON:
"Until Dad was in his mid-sixties, I really had to struggle to keep up with him. I thought I was in prettygood shape, but my tendency is to kind of walk along, take it easy, and enjoy the outdoors. I'd look up,and Dad would be out of sight. He hunted like Sherman marched through Georgia."When I asked permission to hunt, I always introduced myself as Sam Walton of Sam Walton's varietystore down on the square in Bentonville, and I found that it really helped my business. When these farmfolks would come to town to shop, they'd naturally do business with that fellow who hunted their landand brought them candy. I still meet folks today who tell me their father recalls me coming out to hunttheir land in those days. As we began to expand, and I flew around more, I would throw the dogs in theplane with me so I could hunt between store visits.
I had some crazy times with those dogs out on the road. Usually I made them sleep in the trunk of thecar, but if it was Ol' Roy, who was really more of a pet than a bird dog, I would let him sleep in my roomwith me unbeknownst, I'm afraid, to the Holiday Inn folks. Once he got in a fight with a skunk, and I amashamed to even think of what the next person to get my rental car must have thought happened in thatthing. I held him by his hind legs and half drowned him trying to wash him off in this lake, but we foundout you cannot wash skunk off a dog very easily.
Roy was probably the most overrated bird dog in history. He wasn't much of a hunter at all; he wouldpoint rabbits, for example. But the associates and the customers got a kick out of visiting with him in thestores, and once we put his name and picture on our private label dog food, it sold tons. Another thingabout Roy that was very unusual: he was a great tennis dog. He would go with me to the tennis court andlay there, and whenever the ball went out of the court, over the fence, or whatever, he would go chasingafter it and bring it back to me.
What I really love about hunting is the coordination and the training of the dogs. You have to develop apartnership with them. You have to motivate them, and they have to do their work reasonably well.
FROMSOUTHPOINT MAGAZINE, FEBRUARY 1990:
" 'George! Cuminheaartuhme! You're about to get your butt shot, George,' Sam says. Then, to acompanion: 'I think George might be a good one. He's hunting. He's got his nose into the wind, and he'shunting back and forth. He acts like he knows what he's doing. He may not, but he acts like he does. Hebacked the other dogs, and that was just purely instinctive. And a dog with me has to have someinstincts.'"I pride myself on being able to train my own dogs, and I've never had a dog handler, like some of thesecountry gentlemen friends of mine. I enjoy picking out ordinary setter or pointer pups and working withthem yanking them around and correcting them and yelling at them and being patient with them. They'vegot to learn to find the birds, and then they've got to learn the discipline to hold them and wait for thehunter. I have had some dogs I couldn't handle, and Mr. Robson made a specialty out of resurrecting myfailures. He liked nothing better than to take one of my cast-off dogs and fix it up, then give it back to me.
Aside from training the dogs, I like being outdoors in all kinds of weather. When I'm out there, I'm notthinking about Wal-Mart or Sam's or anything but where the next covey might be. Also, some of my bestfriends are people who like to hunt quail. I'm extremely prejudiced, but I feel like quail hunters aregenerally good sportsmen who've got a balanced respect for conservation and wildlife: things that Icertainly value.
As good as the quail hunting is around home, Bud and I got really taken with Texas quail hunting a fewyears back. We each got leases on ranches way down in south Texas scrub country, not too far north ofthe Rio Grande Valley. My place is about as simple as they come; Bud's is a good bit fancier. His has aswimming pool.
SOUTHPOINT :
"Sam Walton's Campo Chapote is a rustic little cluster of trailer homes out in the vast middle of SouthTexas nowhere. This isn't the quail hunting of rich Southern gentry, the kind with white-coated servantsand engraved Belgian shotguns and matched mules in silver harness hitched to mahogany dog wagons.
Sam calls that variety 'South Georgia quail hunting,' and he's tried it, but it isn't reallyhim. In case theambiente of Campo Chapote hasn't sunk in yet, it is, to put it simply: 'All Things Not Trump.' This is acamp where your host hands you your towel, points you to a bedroom in the trailer, and explains: 'Don'tlet the noise in the ceiling worry you, it's just rats.' "BUD WALTON:
"One time Sam and I got invited to a fancy quail hunt on one of those south Georgia plantations. Theytold us they'd pick us up at this landing strip. So we flew in there, and there were all these corporate jetslined up. Well, this guy in a Mercedes pulls up to get us. You should've seen the look on his face whenSam opened up the back of that plane, and his five dogs came flyin' out of there. They weren't expectinganybody to bring their own dogs. They had to haul them in that Mercedes."As you can see, I'm not all work. I like to play as much as the next guy. And I have to admit, backaround 1974 I was awfully tempted to take more time for myself, -to step back and let Ron Mayer andthe other guys run the company, while I went off to enjoy life. Around that same time, Helen and I wenton some of our overseas trips, although I'm sure I spent most of my time over there nosing around storesand doing business.
So for the first time since I had begun retailing in 1945, I was beginning to back off from the business. Iwas getting slightly less involved in the day-to-day decisions and leaning a bit more on Ron Mayer andFerold Arendour two executive vice presidents. I was still chairman and CEO. Ferold, at age forty-five,ran merchandising, while Ron Mayer, who was only forty, ran finance and distribution. To handle theexplosive growth, we were bringing on new people in the general office. Ron brought in a lot of people tohandle data processing and finance and distribution.
What happened then is the one period in Wal-Mart's history that I am still the least comfortable talkingabout today. But everybody else has had their say on the subject so I'm going to explain the events theway I saw them unfold and be done with it.
As I look back on that period now, I realize I had split the company in half, setting up two factionswhich began to compete fiercely with one another. There was the old guard, including many of the storemanagers, remaining loyal to Ferold, and the new guard, many of whom owed their jobs to Ron. Prettysoon, everybody began to take sides, lining up behind either Ron or Ferold, who didn't get along at all.
What I did nextwhich seems totally out of character for meonly compounded the problem tenfold.
Ferold had been valuable in organizing the company as we began to roll out stores, but because of all thetechnology and sophisticated systems we were needing, I really felt at the time that Ron was absolutelyessential to the company's future. In addition to his ability, he had a lot of ambition. He made it pretty wellknown that his goal, which I respected, was to run a company, preferably Wal-Mart. He told me oneday that if he couldn't run our company, he wanted to get out and run another one. So I thought aboutthat for a few days, and I really worried that we were going to lose Ron. Then I said to myself, "Well, I'mgetting pretty old, and we could probably work together. I'll let him be chairman and CEO, and I'll justenjoy myself, step back a little, and, of course, continue to visit stores."So I became chairman of the Executive Committee. Ron became chairman and CEO of the company.
Ferold became president. I moved out of my office down at the end of what they jokingly call "executiverow," and let Ron have it. I moved into his office. I made up my mind to stay out of his way and let himrun the company, telling myself that I would just check to see how he was getting along. Since I hadreally been letting other people operate the company day to day all along, I thought things would run realwell this way.
Well, I was no more ready to retire in 1974 at the age of fifty-six than the Arkansas sun is ready to startrising out of Oklahoma in the morning. But for a while I did step back and take off a little more time. I'msure to Ron Mayer it must have seemed like I never took off at all. The truth is, I failed at retirementworse than just about anything else I've ever tried. Actually, I knew it was a mistake almost right after Iresigned the chairmanship. I tried to stay out of Ron's way. The problem was that I actually just keptdoing exactly the same thing I had been doing all the time. I wanted to see my ideas keep flowing aroundthe company, but I wanted Ron to be successful in operating the company and building an organization.
Unfortunately, I just couldn't quite stay away from it to that degree. The situation was quite a burden forRon, and would have been for any forty-year-old guy wanting to run his own company, I think.
Meanwhile, the house was dividing up against itself. A lot of the newer, younger guys were lining up onRon's side, and the older bunch who ran the stores were backing Ferold. When I began to sense howdeep this split really was, I got real agitated about it, and then I became even more involved insecond-guessing everybody.
AL MILES, RETIRED EXECUTIVE VICE PRESIDENT, WAL-MART:
"There was this thing between Ron and Ferold. I wasn't too involved personally because I was out in thefield then. But even out there it was very apparent that two camps were building up in the company. Youknow, you almost felt committed to say, Well, I'm on this team, or I'm on that team. We started seeing alooseness in our organization that had never been there, and things none of us liked were starting tohappen regularly. The seriousness of running our stores and taking care of our people wasn't happening.
And most of us district managers would get together and talk on the phone on Saturday mornings, and,you know, we thought we were going to hell in a handbasket. I'm not exaggerating. I mean we really did.
Also, I remember that when Sam started spending more time in the office, he was very, very intense."I kept hoping things would work out. And I should say this: Wal-Mart showed real good numbersduring this whole period. It was never a question of mismanagement. What we had was a semiretiredfounder who didn't want to go away, on top of an old-line bunch of store managers at war with anambitious young guy with big ideas of his own.
FEROLD AREND:
"That period right in there was the only negative I ever experienced in my whole time at the company,which is pretty remarkable in itself. Sam always felt the need for his people to compete with one anotherbecause he thought it brought out the best in them, and most of the time it did. But this was a situationthat just didn't work. When he stepped aside, it created a tough situation for everybody. Ron's peoplewere loyal to him, and mine were loyal to me. Sam was saying, I'll decide the things that needtiebreakers.' That turned out to be a lot more things than he had intended. So once he realized how badlythings were really going, he did something about it."I've always taken most of the blame for this mess I created. But it's also true that I didn't think Ron washandling some things as well as he should. I worried about his people skills, and I felt like the wholeclique thing was really hurting our management at the store end, our most unusual strength. And I guess Iwas pretty unhappy too over some issues of what you'd call personal stylenone of them really all thatunusual in most corporate environments, but different from the way we had always done things aroundWal-Mart.
I agonized over all this. I rarely lose sleep over crises at the office, but this time I did. I didn't want todisappoint Ron, didn't want to lose him. But the company was headed in the wrong direction. So finally Icalled him in one Saturday in June of 1976, thirty months after I had given up the chairman's job, and justsaid simply, "Well, Ron, I thought I was ready to step out, but I see that really I wasn't. I've been soinvolved that in a way it has put you under a real handicap." I told him I wanted to come back in aschairman and CEO, and have him assume another jobvice chairman and chief financial officer, I believe.
My proposal wasn't agreeable to Ron, and I can certainly understand why. He wanted to run thecompany, and when he couldn't he decided to leave us. Nobody believed it at the time, but although Iwas unhappy with some of the things going on under Ron's chairmanship,real unhappy with a few, I triedas hard as I could to convince him to stay and be part of our growth even though he couldn't be chairmanand CEO anymore. I said, "Ron, we are going to miss you, we are going to need you, and I think we'regoing to suffer a lot because you're not here." I offered him everything to stay, but he felt it was time togo.
As disappointed and unhappy as he was, Ron said, "Sam, I know you're going to think that things arefalling apart, and a lot of other people are going to think they're falling apart, but you've got such a strongfield organization here, and such loyalty from the associates and the managers in those stores out there,and such loyal customers, and the company is so sound in its operating philosophies, that I think you'lljust move right down the road." I appreciated his expressing that confidence in us. I know he meant it,and I'll never forget it.
In company lore, that incident became known as the "Saturday night massacre." What followed becameknown as "the exodus." First, a whole group of senior managers who had been part of Ron's teamourfinancial officer, our data processing manager, the guy who was running our distribution centersallwalked out behind him. You can imagine how Wall Street felt about that. A lot of folks wrote us offimmediately. They thought, as they have through the years, that we just didn't have the management tohold the place together.
They assumed that Ron Mayer and all his folks were the reason we'd done well, and they just ignored allthe basics we had in place, all our principles: keeping our costs down, teaching our associates to takecare of our customers, and, frankly, just working our tails off.
Throughout all this turmoil, Jack Shewmaker, one of our brighter, brasher young talents, had beenmaking strong contributions to the company, and I thought he might be just what we needed to get usback on track. But when I named him to be executive v.p. of operations, personnel, andmerchandisepassing over some folks who were older and had been with us longera bunch more of ourmanagers left. It was a real, bona fide exodus, and by the time it was over, I'll bet one third of our seniormanagement was gone. For the first time in a long time, things looked pretty grim. And at that point, Ihave to admit I wasn't sure myself that we could just keep on going like before.
As I said back when we lost that first lease in Newport, most setbacks can be turned into opportunities.
And as things turned out, this setback presented us with one of the great opportunities in our company'shistory. Ever since David Glass and I had met at that awful Wal-Mart opening in Harrison, Arkansas, Ihad been trying to somehow persuade him to work for us. He was a big deal at this discount drug chainup in Springfield, and I was convinced he was one of the finest retail talents I had met. For some time, Ihad been after Ron Mayer to hire David, but he wouldn't do it. So when Ron left, David was the firstperson I went to see, and I finally talked him into coming to Wal-Mart. I'm not saying that with Davidand Jack Shewmaker as executive vice presidentsDavid for finance and distribution, and Jack foroperations and merchandisewe didn't still have some turf fighting left to do between the two sides of thecompany. But, man, we had as much retail talent and firepower together under one roof as any companycould handle.
These two guys are completely different in personality, but they are both whip smart. And with us upagainst it like we were, everybody had to head in the same direction. Once again, Wal-Mart provedeverybody wrong, and we just blew the doors off our previous performances. David made us a strongercompany almost immediately. Ron Mayer may have been the architect of our original distributionsystems, but David Glass, frankly, was much better than Ron at distribution, and that was one of the bigareas of expertise I had been afraid of losing. David also was much better at fine-tuning and honing ouraccounting systems. He, along with Jack, was a powerful advocate for much of the high technology thatkeeps us operating and growing today. And not only did he turn out to be a great chief financial officer,he also proved to be a fine talent with people. This new team was even more talented, more suited forthe job at hand than the previous one.
All along, the history of Wal-Mart has been marked by having the right people in the right job when weneeded them most. We had Whitaker, straight out of the get-after-it-and-stay-after-it old school, to helpus get started; Ferold Arend, a methodical, hardworking German, to get us organized; Ron Mayer, awhiz at computers, to get our systems going; Jack Shewmaker, a brilliant shoot-from-the-hip executivewith a store managers mentality, to blow us out of ruts and push us into new ideas we needed to beworking with; and David Glass, who could step up in a crisis, keep his cool, and eventually get control ofa company that became so big it was hard to comprehend.
From day one, we just always found the folks who had the qualities that neither Bud nor I had. And theyfit into the niches as the company grew. Then every so often, we needed even better talents than wesometimes had on board. And that's when the David Glasses would come along. But there's a time for allthese things. I tried for almost twenty years to hire Don Soderquist away from Ben Franklin. I evenoffered him the presidency one time, and he didn't come. But when we really needed him later on, hefinally joined up and made a great chief operating officer for David's team. At any company, the timecomes when some people need to move along, even if they've made strong contributions. I haveoccasionally been accused of pitting people against one another, but I don't really see it that way. I havealways cross-pollinated folks and let them assume different roles in the company, and that has bruisedsome egos from time to time. But I think everyone needs as much exposure to as many areas of thecompany as they can get, and I think the best executives are those who have touched all the bases andhave the best overall concept of the corporation. I hate to see rivalry develop within our company when itbecomes a personal thing and our folks aren't working together and supporting one another.
Philosophically, we have always said, Submerge your own ambitions and help whoever you can in thecompany. Work together as a team.
At fifty-six, I was free and clear of debt. My net worth was far greater than I had ever imagined it couldbe when I started out in the retail business. Our kids were out of college and starting up their own lives. Ireally don't see how I could have reasonably expected much more out of life.
If I've given the impression so far that Wal-Mart has occupied most of my competitive energy over theyears, that's not completely accurate. I've pursued my other passions all along, too, mostly quail huntingand tennisand I pursued them both very competitively. A lot of businessmen seem to prefer golf, but Ialways thought it was a little too country club for me and it took up too much time and wasn't reallycompetitive in the same way that tennis is, you know, in a give-and-take, head-to-head way.
Helen walton:
"When we first met, Sam played golf, but he would get terribly frustrated when he made mistakes. Once,when he was in the Army, he was out playing with some of the officers, and I think their colonel wasalong that day. Sam had hit off into the woods. It made him so mad that he broke his club on a tree. Sohe came home that day, threw his clubs down, and said, 'I've had it with golf.' After that, it was mostlytennis for him."I took my racket with me whenever I was flying, and I had friends to play with when I hit their towns.
For some reason, I loved to play around noonwhen the sun was hottestand I guess I was prettyaggressive. I played regularly from the time we got to Bentonville until about two years ago, when mylegs just couldn't cut it anymore.
GEORGE BILLINGSLEY, TENNIS PARTNER:
"For about ten years, Sam and I played tennis at high noonusually on the court over at his house. I thinkhe liked to play during lunch hour because he wouldn't dream of taking any of his associates away fromtheir jobs to play. On the court, he was the most competitive player. He studied his opponents' games,and he knew our strengths and weaknesses as well as his own. If you hit a ball to Sam's forehand, thatpoint was his. He would hit it crosscourt, and it was over.
"He loved the game. He never gave you a point, and he never quit. But he is a fair man. To him, the rulesof tennis, the rules of business, and the rules of life are all the same, and he follows them. As competitiveas he is, he was a wonderful tennis opponentalways gracious in losing and in winning. If he lost, hewould say, 'I just didn't have it today, but you played marvelously.' "LORETTA BOSS PARKER, POPULARLY KNOWN AS THE VICE PRESIDENT FOR TENNIS:
"If Mr. Walton was out on a trip, his idea of making a tennis date would be to radio our aviationdepartment when he was a few minutes out from landing and have them phone me with a time. I wouldget the call at eleven, find him a partner, and he would be playing by noon."So tennis became my outlet for organized competitive sport and exercise. But my real passion outsideWal-Mart has always been my bird hunting. I have to say it's probably my one self-indulgent activity. Iloved it so much that I just made it part of my way of doing business from early on.
I never did that much quail hunting growing up, not until I met Helen's father, who was dead seriousabout it. Anytime I was around Claremore I loved to go out there and hunt with Mr. Robson, or Helen'sbrothers, Frank and Nick. Her dad and I were both much better than average shots, and we got to bepretty competitive over the hunting.
As I mentioned, Bentonville appealed to me because I could hunt quail seasons in four states. So duringthe season, I usually took off almost every day around three or four in the afternoon and went out to do acouple of hours' hunting. I had an old hunting car I'd haul my dogs in, and I'd go find a farm or ranch Iwanted to hunt. I learned early that the best way to get invited back was to go ask permission and offerthe owner a box of chocolate cherries from the store, or, if he preferred it, a take of the game I shot. I'vehunted all over these hills and valleys around here.
JOHN WALTON:
"Until Dad was in his mid-sixties, I really had to struggle to keep up with him. I thought I was in prettygood shape, but my tendency is to kind of walk along, take it easy, and enjoy the outdoors. I'd look up,and Dad would be out of sight. He hunted like Sherman marched through Georgia."When I asked permission to hunt, I always introduced myself as Sam Walton of Sam Walton's varietystore down on the square in Bentonville, and I found that it really helped my business. When these farmfolks would come to town to shop, they'd naturally do business with that fellow who hunted their landand brought them candy. I still meet folks today who tell me their father recalls me coming out to hunttheir land in those days. As we began to expand, and I flew around more, I would throw the dogs in theplane with me so I could hunt between store visits.
I had some crazy times with those dogs out on the road. Usually I made them sleep in the trunk of thecar, but if it was Ol' Roy, who was really more of a pet than a bird dog, I would let him sleep in my roomwith me unbeknownst, I'm afraid, to the Holiday Inn folks. Once he got in a fight with a skunk, and I amashamed to even think of what the next person to get my rental car must have thought happened in thatthing. I held him by his hind legs and half drowned him trying to wash him off in this lake, but we foundout you cannot wash skunk off a dog very easily.
Roy was probably the most overrated bird dog in history. He wasn't much of a hunter at all; he wouldpoint rabbits, for example. But the associates and the customers got a kick out of visiting with him in thestores, and once we put his name and picture on our private label dog food, it sold tons. Another thingabout Roy that was very unusual: he was a great tennis dog. He would go with me to the tennis court andlay there, and whenever the ball went out of the court, over the fence, or whatever, he would go chasingafter it and bring it back to me.
What I really love about hunting is the coordination and the training of the dogs. You have to develop apartnership with them. You have to motivate them, and they have to do their work reasonably well.
FROMSOUTHPOINT MAGAZINE, FEBRUARY 1990:
" 'George! Cuminheaartuhme! You're about to get your butt shot, George,' Sam says. Then, to acompanion: 'I think George might be a good one. He's hunting. He's got his nose into the wind, and he'shunting back and forth. He acts like he knows what he's doing. He may not, but he acts like he does. Hebacked the other dogs, and that was just purely instinctive. And a dog with me has to have someinstincts.'"I pride myself on being able to train my own dogs, and I've never had a dog handler, like some of thesecountry gentlemen friends of mine. I enjoy picking out ordinary setter or pointer pups and working withthem yanking them around and correcting them and yelling at them and being patient with them. They'vegot to learn to find the birds, and then they've got to learn the discipline to hold them and wait for thehunter. I have had some dogs I couldn't handle, and Mr. Robson made a specialty out of resurrecting myfailures. He liked nothing better than to take one of my cast-off dogs and fix it up, then give it back to me.
Aside from training the dogs, I like being outdoors in all kinds of weather. When I'm out there, I'm notthinking about Wal-Mart or Sam's or anything but where the next covey might be. Also, some of my bestfriends are people who like to hunt quail. I'm extremely prejudiced, but I feel like quail hunters aregenerally good sportsmen who've got a balanced respect for conservation and wildlife: things that Icertainly value.
As good as the quail hunting is around home, Bud and I got really taken with Texas quail hunting a fewyears back. We each got leases on ranches way down in south Texas scrub country, not too far north ofthe Rio Grande Valley. My place is about as simple as they come; Bud's is a good bit fancier. His has aswimming pool.
SOUTHPOINT :
"Sam Walton's Campo Chapote is a rustic little cluster of trailer homes out in the vast middle of SouthTexas nowhere. This isn't the quail hunting of rich Southern gentry, the kind with white-coated servantsand engraved Belgian shotguns and matched mules in silver harness hitched to mahogany dog wagons.
Sam calls that variety 'South Georgia quail hunting,' and he's tried it, but it isn't reallyhim. In case theambiente of Campo Chapote hasn't sunk in yet, it is, to put it simply: 'All Things Not Trump.' This is acamp where your host hands you your towel, points you to a bedroom in the trailer, and explains: 'Don'tlet the noise in the ceiling worry you, it's just rats.' "BUD WALTON:
"One time Sam and I got invited to a fancy quail hunt on one of those south Georgia plantations. Theytold us they'd pick us up at this landing strip. So we flew in there, and there were all these corporate jetslined up. Well, this guy in a Mercedes pulls up to get us. You should've seen the look on his face whenSam opened up the back of that plane, and his five dogs came flyin' out of there. They weren't expectinganybody to bring their own dogs. They had to haul them in that Mercedes."As you can see, I'm not all work. I like to play as much as the next guy. And I have to admit, backaround 1974 I was awfully tempted to take more time for myself, -to step back and let Ron Mayer andthe other guys run the company, while I went off to enjoy life. Around that same time, Helen and I wenton some of our overseas trips, although I'm sure I spent most of my time over there nosing around storesand doing business.
So for the first time since I had begun retailing in 1945, I was beginning to back off from the business. Iwas getting slightly less involved in the day-to-day decisions and leaning a bit more on Ron Mayer andFerold Arendour two executive vice presidents. I was still chairman and CEO. Ferold, at age forty-five,ran merchandising, while Ron Mayer, who was only forty, ran finance and distribution. To handle theexplosive growth, we were bringing on new people in the general office. Ron brought in a lot of people tohandle data processing and finance and distribution.
What happened then is the one period in Wal-Mart's history that I am still the least comfortable talkingabout today. But everybody else has had their say on the subject so I'm going to explain the events theway I saw them unfold and be done with it.
As I look back on that period now, I realize I had split the company in half, setting up two factionswhich began to compete fiercely with one another. There was the old guard, including many of the storemanagers, remaining loyal to Ferold, and the new guard, many of whom owed their jobs to Ron. Prettysoon, everybody began to take sides, lining up behind either Ron or Ferold, who didn't get along at all.
What I did nextwhich seems totally out of character for meonly compounded the problem tenfold.
Ferold had been valuable in organizing the company as we began to roll out stores, but because of all thetechnology and sophisticated systems we were needing, I really felt at the time that Ron was absolutelyessential to the company's future. In addition to his ability, he had a lot of ambition. He made it pretty wellknown that his goal, which I respected, was to run a company, preferably Wal-Mart. He told me oneday that if he couldn't run our company, he wanted to get out and run another one. So I thought aboutthat for a few days, and I really worried that we were going to lose Ron. Then I said to myself, "Well, I'mgetting pretty old, and we could probably work together. I'll let him be chairman and CEO, and I'll justenjoy myself, step back a little, and, of course, continue to visit stores."So I became chairman of the Executive Committee. Ron became chairman and CEO of the company.
Ferold became president. I moved out of my office down at the end of what they jokingly call "executiverow," and let Ron have it. I moved into his office. I made up my mind to stay out of his way and let himrun the company, telling myself that I would just check to see how he was getting along. Since I hadreally been letting other people operate the company day to day all along, I thought things would run realwell this way.
Well, I was no more ready to retire in 1974 at the age of fifty-six than the Arkansas sun is ready to startrising out of Oklahoma in the morning. But for a while I did step back and take off a little more time. I'msure to Ron Mayer it must have seemed like I never took off at all. The truth is, I failed at retirementworse than just about anything else I've ever tried. Actually, I knew it was a mistake almost right after Iresigned the chairmanship. I tried to stay out of Ron's way. The problem was that I actually just keptdoing exactly the same thing I had been doing all the time. I wanted to see my ideas keep flowing aroundthe company, but I wanted Ron to be successful in operating the company and building an organization.
Unfortunately, I just couldn't quite stay away from it to that degree. The situation was quite a burden forRon, and would have been for any forty-year-old guy wanting to run his own company, I think.
Meanwhile, the house was dividing up against itself. A lot of the newer, younger guys were lining up onRon's side, and the older bunch who ran the stores were backing Ferold. When I began to sense howdeep this split really was, I got real agitated about it, and then I became even more involved insecond-guessing everybody.
AL MILES, RETIRED EXECUTIVE VICE PRESIDENT, WAL-MART:
"There was this thing between Ron and Ferold. I wasn't too involved personally because I was out in thefield then. But even out there it was very apparent that two camps were building up in the company. Youknow, you almost felt committed to say, Well, I'm on this team, or I'm on that team. We started seeing alooseness in our organization that had never been there, and things none of us liked were starting tohappen regularly. The seriousness of running our stores and taking care of our people wasn't happening.
And most of us district managers would get together and talk on the phone on Saturday mornings, and,you know, we thought we were going to hell in a handbasket. I'm not exaggerating. I mean we really did.
Also, I remember that when Sam started spending more time in the office, he was very, very intense."I kept hoping things would work out. And I should say this: Wal-Mart showed real good numbersduring this whole period. It was never a question of mismanagement. What we had was a semiretiredfounder who didn't want to go away, on top of an old-line bunch of store managers at war with anambitious young guy with big ideas of his own.
FEROLD AREND:
"That period right in there was the only negative I ever experienced in my whole time at the company,which is pretty remarkable in itself. Sam always felt the need for his people to compete with one anotherbecause he thought it brought out the best in them, and most of the time it did. But this was a situationthat just didn't work. When he stepped aside, it created a tough situation for everybody. Ron's peoplewere loyal to him, and mine were loyal to me. Sam was saying, I'll decide the things that needtiebreakers.' That turned out to be a lot more things than he had intended. So once he realized how badlythings were really going, he did something about it."I've always taken most of the blame for this mess I created. But it's also true that I didn't think Ron washandling some things as well as he should. I worried about his people skills, and I felt like the wholeclique thing was really hurting our management at the store end, our most unusual strength. And I guess Iwas pretty unhappy too over some issues of what you'd call personal stylenone of them really all thatunusual in most corporate environments, but different from the way we had always done things aroundWal-Mart.
I agonized over all this. I rarely lose sleep over crises at the office, but this time I did. I didn't want todisappoint Ron, didn't want to lose him. But the company was headed in the wrong direction. So finally Icalled him in one Saturday in June of 1976, thirty months after I had given up the chairman's job, and justsaid simply, "Well, Ron, I thought I was ready to step out, but I see that really I wasn't. I've been soinvolved that in a way it has put you under a real handicap." I told him I wanted to come back in aschairman and CEO, and have him assume another jobvice chairman and chief financial officer, I believe.
My proposal wasn't agreeable to Ron, and I can certainly understand why. He wanted to run thecompany, and when he couldn't he decided to leave us. Nobody believed it at the time, but although Iwas unhappy with some of the things going on under Ron's chairmanship,real unhappy with a few, I triedas hard as I could to convince him to stay and be part of our growth even though he couldn't be chairmanand CEO anymore. I said, "Ron, we are going to miss you, we are going to need you, and I think we'regoing to suffer a lot because you're not here." I offered him everything to stay, but he felt it was time togo.
As disappointed and unhappy as he was, Ron said, "Sam, I know you're going to think that things arefalling apart, and a lot of other people are going to think they're falling apart, but you've got such a strongfield organization here, and such loyalty from the associates and the managers in those stores out there,and such loyal customers, and the company is so sound in its operating philosophies, that I think you'lljust move right down the road." I appreciated his expressing that confidence in us. I know he meant it,and I'll never forget it.
In company lore, that incident became known as the "Saturday night massacre." What followed becameknown as "the exodus." First, a whole group of senior managers who had been part of Ron's teamourfinancial officer, our data processing manager, the guy who was running our distribution centersallwalked out behind him. You can imagine how Wall Street felt about that. A lot of folks wrote us offimmediately. They thought, as they have through the years, that we just didn't have the management tohold the place together.
They assumed that Ron Mayer and all his folks were the reason we'd done well, and they just ignored allthe basics we had in place, all our principles: keeping our costs down, teaching our associates to takecare of our customers, and, frankly, just working our tails off.
Throughout all this turmoil, Jack Shewmaker, one of our brighter, brasher young talents, had beenmaking strong contributions to the company, and I thought he might be just what we needed to get usback on track. But when I named him to be executive v.p. of operations, personnel, andmerchandisepassing over some folks who were older and had been with us longera bunch more of ourmanagers left. It was a real, bona fide exodus, and by the time it was over, I'll bet one third of our seniormanagement was gone. For the first time in a long time, things looked pretty grim. And at that point, Ihave to admit I wasn't sure myself that we could just keep on going like before.
As I said back when we lost that first lease in Newport, most setbacks can be turned into opportunities.
And as things turned out, this setback presented us with one of the great opportunities in our company'shistory. Ever since David Glass and I had met at that awful Wal-Mart opening in Harrison, Arkansas, Ihad been trying to somehow persuade him to work for us. He was a big deal at this discount drug chainup in Springfield, and I was convinced he was one of the finest retail talents I had met. For some time, Ihad been after Ron Mayer to hire David, but he wouldn't do it. So when Ron left, David was the firstperson I went to see, and I finally talked him into coming to Wal-Mart. I'm not saying that with Davidand Jack Shewmaker as executive vice presidentsDavid for finance and distribution, and Jack foroperations and merchandisewe didn't still have some turf fighting left to do between the two sides of thecompany. But, man, we had as much retail talent and firepower together under one roof as any companycould handle.
These two guys are completely different in personality, but they are both whip smart. And with us upagainst it like we were, everybody had to head in the same direction. Once again, Wal-Mart provedeverybody wrong, and we just blew the doors off our previous performances. David made us a strongercompany almost immediately. Ron Mayer may have been the architect of our original distributionsystems, but David Glass, frankly, was much better than Ron at distribution, and that was one of the bigareas of expertise I had been afraid of losing. David also was much better at fine-tuning and honing ouraccounting systems. He, along with Jack, was a powerful advocate for much of the high technology thatkeeps us operating and growing today. And not only did he turn out to be a great chief financial officer,he also proved to be a fine talent with people. This new team was even more talented, more suited forthe job at hand than the previous one.
All along, the history of Wal-Mart has been marked by having the right people in the right job when weneeded them most. We had Whitaker, straight out of the get-after-it-and-stay-after-it old school, to helpus get started; Ferold Arend, a methodical, hardworking German, to get us organized; Ron Mayer, awhiz at computers, to get our systems going; Jack Shewmaker, a brilliant shoot-from-the-hip executivewith a store managers mentality, to blow us out of ruts and push us into new ideas we needed to beworking with; and David Glass, who could step up in a crisis, keep his cool, and eventually get control ofa company that became so big it was hard to comprehend.
From day one, we just always found the folks who had the qualities that neither Bud nor I had. And theyfit into the niches as the company grew. Then every so often, we needed even better talents than wesometimes had on board. And that's when the David Glasses would come along. But there's a time for allthese things. I tried for almost twenty years to hire Don Soderquist away from Ben Franklin. I evenoffered him the presidency one time, and he didn't come. But when we really needed him later on, hefinally joined up and made a great chief operating officer for David's team. At any company, the timecomes when some people need to move along, even if they've made strong contributions. I haveoccasionally been accused of pitting people against one another, but I don't really see it that way. I havealways cross-pollinated folks and let them assume different roles in the company, and that has bruisedsome egos from time to time. But I think everyone needs as much exposure to as many areas of thecompany as they can get, and I think the best executives are those who have touched all the bases andhave the best overall concept of the corporation. I hate to see rivalry develop within our company when itbecomes a personal thing and our folks aren't working together and supporting one another.
Philosophically, we have always said, Submerge your own ambitions and help whoever you can in thecompany. Work together as a team.