Wal-Mart’s Scott Delivers Swansong Speech at NRF

Discussion
Jan 13, 2009

By Ron Margulis

Outgoing Wal-Mart CEO
Lee Scott gave his final public speech at the NRF’s Annual
Conference Monday, starting out on a depressing note and only getting marginally
more cheery as he went on. “We have all had a tough Christmas. We
have all just lived through it. And we all know what it is like out there
for retailers, for our suppliers and our customers,” he began.

Mr. Scott
asked for the gathered audience of several thousand to indulge him and
said he was not going to talk about Wal-Mart, but rather address the country’s
current challenges. Almost as if he was lobbying the Obama administration
for a job as business czar, he identified the big issues facing our country,
such as the economy, the healthcare
“embarrassment,” energy dependence, educating the next generation
and immigration.

“Above all … we
need to change how we bring about change in America. Over the last few
years, a problem-solving vacuum has existed in Washington. There has been
too much partisanship … too much gamesmanship … too much selfishness.
And the American people are tired of it,” he said.

“They are tired
of Republican versus Democrat and liberal versus conservative. They are
tired of business versus labor and NGOs versus business. They are tired
of one side insisting on everything they want versus reasonable compromise
to move the country forward. The American people want their leaders to set
aside their differences, find common ground and work together.”

He also called for closer
collaboration between the government, business and non-governmental organizations
as the only way for the country to get back on the right path to a prolonged
recovery.

During the Q&A session that followed his speach,
Scott remembered that he was at a retail convention and addressed his legacy
at Wal-Mart and in the industry. Calling himself just an old logistician,
his advice to retailers in the audience was straightforward, “You
better understand your customer now, and you better understand your inventory.
You have to manage the business in much more detail.”

Discussion Question:
What will
Lee Scott most be remembered for? As he leaves the company, how good
a role model is Wal-Mart for progressive retailing and responsible business
practices?

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15 Comments on "Wal-Mart’s Scott Delivers Swansong Speech at NRF"


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Gene Detroyer
Guest
13 years 4 months ago
These are extraordinary comments from a leader of a company that was once thought of as the reincarnation of the devil. It is a shame he is stepping down. Perhaps, there is a place for him in the new administration? During Lee Scott’s reign, Wal-Mart has done just about everything right. That includes the broad span from operations to knowing their customer. As a CEO selling to Wal-Mart, I watched them grow from a customer to be feared to become the best customer in the country. They are fair and carry on their business at the highest levels of ethics in an industry known for taking advantage of a supplier at every turn. There is one more point that comes through loud and clear in Lee Scott’s comments. It is unsaid, but he is on target. This country can’t fix its problems until it recognizes its problems. The United States can not afford to have its citizens and politicians waving flags and pounding chests that everything in America is the greatest. Politicians and citizens alike… Read more »
Pradip V. Mehta, P.E.
Guest
Pradip V. Mehta, P.E.
13 years 4 months ago

Lee Scott will mostly be remembered for logistics prowess that Wal-Mart has as well as paying attention to the environment through reduced packaging, recycling, etc.

Vahe Katros
Guest
Vahe Katros
13 years 4 months ago

Hey Ron–nice write-up, thanks for saving me the airfare!

In classic Wal-Mart fashion, what Lee is pushing is something they’ve been quietly perfecting over the last decade.

Lee is changing the business model towards green just like Sam had the wisdom to stop fighting and start collaborating (of course collaboration could only happen with trust and trust came from verification (EDI and RetailLink–but I digress and thanks Bill Doran, a great historian of the formative years of WM).

Back to the point–Ron, you ask about his legacy? How about setting into motion the future of retail? (In the same spirit of Sam, Lee didn’t fight GreenPeace–he joined them!)

James Tenser
Guest
13 years 4 months ago
Well as much as we all love to take shots at the behemoth from Bentonville, on balance I must admit that Lee Scott did a pretty good job at the helm. On his watch Walmart has evolved from an amoral juggernaut to a vital player in the broader economy that at least incorporates some enlightened self interest into its operating style. We can rightly snipe about how late it got into the game on some issues, but let’s give credit where it is due: Under Scott, Walmart has innovated on sustainability; made progress on labor and healthcare issues; set a decently high ethical bar for its business practices; and managed to continue to post the best performance numbers in the industry. Does that make Walmart or Lee Scott role models? The answer to that probably depends on your ideology. Walmart seems more respected than loved, and its scale and working class ambiance makes it an easy target for some critics. It seems to me that Mr. Scott can stand by his record as he transitions… Read more »
Sam Gil
Guest
Sam Gil
13 years 4 months ago

I think he carried his legacy quite well. Wal-Mart has been able to rise above the current economy in a very good way. I especially agree with what he says here: “You better understand your customer now, and you better understand your inventory. You have to manage the business in much more detail.”

Can’t tell you how true that is for retailers!

John Crossman
Guest
John Crossman
13 years 4 months ago

He took Wal-Mart to the next level. Expanded their global presence. They are well positioned for the next market upturn.

John Gaffney
Guest
John Gaffney
13 years 4 months ago

Lee Scott’s comments at NRF are completely hypocritical.

He calls for more action from Washington but he has presided over one of the most aggressive lobbying efforts in DC. That lobby has enabled WM to avoid healthcare benefits and more importantly, take the teeth out of the Robinson Patman act that ensures price competition.

He calls for retail unity. Retailing is an amoral business and no one has been a more cutthroat competitor than Scott. Witness the recent bailout on Nielsen product tracking, as well as various hammerlocks on suppliers.

Marc Gordon
Guest
Marc Gordon
13 years 4 months ago

Unlike many CEOs, this guy actually left the company in better shape than it was when he came in. So what if he wants to rant? If what he says makes sense and can make a positive change in more areas of business and government, then why not.

Now if only he would discuss the topic of why Walmart’s magazine racks are always so disorganized.

Dick Seesel
Guest
13 years 4 months ago

A mixed but overall positive legacy. On the plus side, Scott really focused Walmart on logistics, execution and cost efficiency even more than his predecessors. He expanded the company internationally with mixed success, and took some deserved flak on “social enlightenment” issues–and here he has made a nice recovery, letting Walmart take a forward position on energy efficiency and so on. Most importantly, he made an important midcourse correction a couple of years ago when the company got overly “aspirational,” returning its core brand image to value while improving execution in the stores.

Len Lewis
Guest
Len Lewis
13 years 4 months ago

I was there listening to his speech yesterday. There were some points where he sounded like a candidate. Who knows?

Whatever happens, I think Lee Scott has too much to offer in terms of business acumen to just disappear from the scene. I’m not sure Secretary of Commerce would be the right gig. But he should play a key role in any executive coalition that might help this country, and others, get back on track. Aside from that, he’d be a great asset as a lecturer at any business school.

I agree. He’s taken Wal-Mart to a new level. But he’s still part of the old guard and it will be interesting to see where they go from here.

Mark Lilien
Guest
13 years 4 months ago

Five years ago Walmart stock was $54. Today it’s $52. Five years ago Costco was $37. Today it’s $53. Both companies pay their bills. Both companies are profitable. Costco shareholders and employees are better compensated than Walmart folks. A lot better.

Charles P. Walsh
Guest
Charles P. Walsh
13 years 4 months ago

All that can be said about Lee and his accomplishments at Walmart have been said by those panelists above.

Lee’s legacy will serve him in his next endeavor which is obviously pointing towards a role within the new administration or at the head of some coalition between business and government. Lee, in my opinion, has his eye on using his experience to serve the country within the public sector.

Carol Spieckerman
Guest
Carol Spieckerman
13 years 4 months ago

I’m not sure how the industry and individuals will choose to remember Lee’s legacy. For me, Wal-Mart’s aggressive push for sustainability on a (literally) massive level and its newfound and very un-mass nimbleness (in-store merchandising ala its Game Time sections, localization, limited distribution brand plays) and forward-looking forays into emerging media (social media, Smart Network, proximity marketing) are remarkable and precedent-setting. In general, Lee led Wal-Mart out of the insular shadows and into the light of collaboration, communication and experimentation.

Mel Kleiman
Guest
13 years 4 months ago

As I look at Lee Scott’s record I see a couple of high points. Willingness to change. Willingness to listen to others, willingness to admit when he has made a mistake and then take corrective action. Willingness to have open communication. Willingness to see the big picture.

Brian Kelly
Guest
13 years 4 months ago

I like a quote from Mr Scott: “I was lucky to work with people smarter than me.” I think it fits nicely with a Sam Walton quote: “I know what I know, I want to know what you know.”

Wal-Mart went to places no one cared to go. There is a bizarre bias against their store experience. Despite that it recently reinvented itself and took share from Target.

Whether it is ‘eating others lunch’ or ‘drinking others milkshakes’, congrats to all the “dumb hicks” in Bentonville that dance on the graves of hundreds of dinosaur retailers who were too lazy to listen to the majority of Americans.

Wal-Mart gets the fundamental premise of retail: it ain’t for sissies.

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