Doug McMillon Was Raised to Run Walmart
During my time at Walmart, we often said that the only thing that is consistent is change. Change is coming in February, as Doug McMillon will take over as CEO. In my opinion, he is the perfect candidate for the job and will bring a positive future of innovation and growth to Walmart.
Doug, quite literally, grew up at Walmart. His dad was an associate with the company. He worked his way up from loading trucks in a distribution center, in stores, as a buyer and even as general merchandise manager. He is someone who fully understands not only where the company is headed, but where it has been. Most importantly, he knows Walmart’s customers.
Doug has the leadership abilities needed for the job and has the experience to know what it takes to drive sales and be a leader on price. In addition, he has strong relationships with former Walmart executives to whom he can turn for counsel.
His experience as a buyer may pose a challenge for suppliers. I think he will be tough, expecting them to focus on EDLP offers and work with Walmart to improve trips and baskets. When things typically got difficult in years past, Walmart won by "focusing on the basics." I believe that Doug knows the "basics" as well as anyone.
The question becomes what will happen to Bill Simon, the head of Walmart’s U.S. business. He has done a great job and it would a loss for Walmart to do without his skills and leadership. Will he be moved to International or will he decide to move on from Walmart?
If Bill stays in his current job, will Walmart turn to Rosalind Brewer, current president and CEO of Sam’s Club, to lead its international business? If Bill goes to International, will Walmart U.S. name it current chief operating officer Gisel Ruiz to run that business?
This next year will be interesting to watch. Doug will have plenty of challenges to address, including better managing inventory to improve on-shelf availability, adding labor in-store to raise performance standards while reducing dependence on service providers in keeping shelves stocked. I believe he’s up to the challenge, but only time will tell.
Discussion Questions
What do you think are the biggest challenges facing Doug McMillon as he prepares to take over as CEO of Walmart? Do you see Mr. McMillon as a caretaker choice to follow Mike Duke or do you think he will reinvent Walmart’s business in significant ways?
Certainly there are challenges for Walmart. Over the past few years, Walmart has tried many new initiatives, veered in a number of new directions, and returned to basics. As someone who understands Walmart’s roots, Doug McMillon is uniquely positioned to center the organization. How he decides to fill leadership positions and the direction he chooses to champion will set a course for Walmart that will be well grounded in its core values. For Walmart, this could mean adhering to core values and centering its strategy.
On the surface, it appears as though Mr. McMillon will just continue the same strategy as Walmart has generally followed for decades: Open new stores, whether the community wants them or not, continue lowering prices to bring business into the stores, and blame everything but a saturated market for lack of positive comps.
I really hope I’m wrong. But I think Walmart is way too inbred. It’s also too big to fail at this point.
I share the author’s enthusiasm for Mr. McMillon, considering his built-in empathy and understanding of the workings and the culture of Walmart. Given his relatively young age of 47, McMillon should also be in good position to continue to relate to and accentuate the digital initiatives at Walmart as they continue to compete against Amazon and others in that space.
Challenges that he will face will be formidable, however. Walmart’s current store strategy, involving the proliferation of Neighborhood stores remains an unknown. Of course assortment, in-stock issues, and pricing will continue to be vital points of competitive differentiation that will require his attention. Internationally, Walmart will continue to face competitive and regulatory issues that will impede their growth. Amazon will continue to pressure the online side of Walmart’s business and resources and innovation will be the order of the day in order to continue online growth.
But like all CEOs, McMillon’s most important decisions will involve the people he puts around him. At the very least, McMillon appears to have the right DNA to be successful for a very long time in Bentonville.
Bypassing Mr. Simon signals that Walmart is not as happy with its U.S. business as the article suggests. Mr. McMillon’s challenges include continuing to grow the company’s e-commerce and international businesses, but he also needs to figure out how to restart the domestic volume beyond its food and commodity categories, heavily dependent on its most economically stressed customers. It sounds like the new CEO is well prepared for the job, especially having the “home-grown” credibility so important to the Walmart culture.
From my view, Doug has to take on the global challenges of price, channels, customer satisfaction, and the competition. Price is always the #1 issue with the Walmart shopper and fortunately, Doug knows how to work the vendors to drive the best prices.
The channels issue will be ongoing. If he can beat the ship-to-store issues and the mobile shopping challenges then Walmart will really crank. Customer satisfaction is more critical than ever as more and more people are becoming Walmart shoppers. Here in AZ we have as many Mercedes, BMWs, and Caddy CTS in the Walmart parting lot as we do pick-ups. This means there are new shoppers saying why pay more and thus shopper SAT is key to keeping them coming back.
Last, the competitors. Walmart knows this issue well. They have fought for the right to lead the retail industry, but that was when the market changed slower. With the retail space changing faster than any other industry, the competitors can move even faster and strike harder. Doug and team needs to think this through and ignite a plan that keeps Walmart #1.
Crank it up Doug!
Tom…a dedicated and proud Walmart shopper!
Congratulations to Doug, and I am excited and looking forward to continuing to have an amazing working relationship with the company. Walmart gets a bad rap for being so big, and so dominant, but I can tell you first hand that in actuality, Walmart is one of the most vendor-friendly and best partnering retailers in the industry to work with. There are no games in dealing with Walmart. The rules are pretty simple, easy to follow, and there are very few surprises. Frankly, I love working with Walmart.
As someone close to the retail mass markets business, perhaps more on the vendor side rather than inside retail, I would love to see Walmart and other retailers reduce the number of boxes on the organizational chart, while realizing that today, technology, marketing, procurement, category management, and vendor relations, are all pretty much one of the same.
It sounds to me like Doug McMillon has a wonderfully integrated background inside Walmart for this position. From afar, I would not necessarily expect a lot of “reinvention” from someone that “grew up” in the Walmart environment, however, time will tell, and I am hopeful that Doug will use his vast Walmart knowledge to preserve what makes Walmart elite, while also having a very special vision to make refinements and improvements.
Biggest challenge: Amazon, Amazon and Amazon. If he’s simply a caretaker, Walmart’s business will suffer.
The biggest challenge facing Doug McMillon as WM’s new CEO will be preventing it from become a future Kmart, once the top dog in discount retailing.
Doug has a plate full of specific challenges: softer sales, keeping shelves stocked, wage and pricing pressures, etc.
Growth in the USA is more limited than international expansion. So McMillon will put emphasis on the sector. He already knows that potential customers in other countries are generally more likely to be receptive to WM’s reputation for having low prices but the world’s retail marketplaces are in transition.
With his savvy, McMillon will try to hard to try to make Walmart the world’s best retailer, then sustain that position, and that will demand innovative skills that may not have been birthed in a long WM career.
If Doug is to reinvent Walmart’s business in significant ways, it will come from whatever vision is chomping at the bit in his brain, heart and soul.
The appearance is Doug McMillon is the logical and best choice for Walmart at this time. He knows the business, which is a plus and minus. Plus: he knows what the company is about and can take it to the next level. Minus: he is too inbred and will not be able to think outside Walmart. My hope is he remembers where he came from and keeps Walmart moving forward aggressively to combat both Target and Amazon.
The choice of Doug McMillon is in line with the objective to follow Mike Duke. Duke’s objective and clearly that of the choice of McMillon is to continue to focus on the businesses other than the historical Walmart U.S. core. Walmart will look not to reinvent itself, but to broaden its business by geography and channel.
The future is in the international business where 95% of the world’s commercial growth will occur. The future is in online, which will continue to grow at double-digit rates. The future is in unique formats that may not yet exist. McMillon seems to be the man to do this.
I’m not as focused on the leadership personnel as I am the seismic shifting going on in the retail industry. The changing of the guard at Walmart is a pip in comparison to two “recent” developments:
1. The advance of Costco up to the #3 position in global retailing rank and,
2. The alignment of Google with Costco to create a new retail juggernaut.
OK, I think Amazon and Costco would have made more sense, but I couldn’t see Bezos playing nice in such a collaboration. As my recent Views, “Selling Like Amazon… in Bricks & Mortar Stores!” documents, Costco is already selling like Amazon. I’m afraid that Walmart may not even understand what their real vulnerability is.
I realize a lot of really bright people have said, Huh? to my assertion that Amazon is the premier selling organization in the world. Never mind — people marinated for 100 years in self-service retail are so far removed from any actually selling activity that they can’t recognize it when it is pointed out.
The question in my mind is whether Google can pick up on what Costco has already done, and more seriously impact Costco sales with long-tail attractiveness. It helps to understand what the real problems are, rather than being stuck in history.
I find it interesting that Walmart’s board of directors are so connected to a business plan that is showing signs of weakness in the past few quarterly reports. The CEO selection story described in this discussion brings into question the effectiveness of several in-house candidates including the winner. What is most noteworthy is that all of the candidates are staunch followers of the Walmart business plan.
What the company wants us to believe is that the faithful just can’t get it done. The simple truth is that Walmart is unable to address the e-commerce side of retail with a winning plan. It is this market that confounds the ingenuity of their top guns to the extent that they have once again failed to perform. Add to that some eight to ten thousand dollar something or other establishments and you have a bump in the road to success that they just can’t get over or around.
Back in the day there were others that insisted they were fully aware of how to drive the market simply because they were the biggest and of course the best. And now they are gone, or as in the case of Sears, maybe almost gone.
No business, domestically or internationally, can have a CEO as a mere caretaker. Don’t look to see Doug McMillon even thinking of that role.
The culture of Walmart is to see themselves as either growing and innovating, or taking a long slow path to decline. Walmart doesn’t have that in their DNA.
Look for McMillon to place a strong focus on the consumer first in the U.S. markets. He’ll have merchandisers and marketers listening to and watching consumer sentiment, behavior and future purchasing plans. Then, he’ll lead an attack from that position.
Secondly, McMillon will build on international markets to strategically build share and profitability.
Third, Walmart will fight the battle successfully on multiple channels and formats – supercenters, local stores, online, etc.
Walmart will not sit idly by and let competitors out-maneuver them. Duke will leave the company in good shape, and will insist that Walmart continue to grow and evolve. Doug McMillon is the right individual to take the reigns.