Walmart CEO: ‘Retail is about change’
In a keynote presentation at NRF’s Retail’s Big Show, Doug McMillon, Walmart’s CEO, highlighted the importance of fostering a culture that supports change in an increasingly tech-driven marketplace.
Much of the change, he said, is occurring around the shopper experience as digital and in-store elements are combined.
Part of that effort to encourage embracing change involves an increased emphasis on training. During the prior week, Walmart earned praise for expanding its minimum wage and benefits for employees as a result of the new tax reform. That came on top of significant workforce investments that began in 2015.
But Mr. McMillon, who was interviewed by NRF’s CEO Matthew Shay, said the part of those investments that “doesn’t get talked about enough” is skills development. Said Mr. McMillon, “The tools we’re using today are different than the tools we used to use, and the tools coming tomorrow will also be different.”
Generally, Mr. McMillon said, associates are eager to use the tools because they make their jobs easier. “The tasks we’re able to automate or digitize are not tasks that they really enjoy doing anyway and we’re freeing them up to do things that are more fun,” he said.
While some training in selling floor environments and in warehouses is conducted with the help of handheld devices and communications, 225,000 associates completed classes at one of its in-store academies over the last year to learn specific skillsets. Mr. McMillon added, “What we’re learning is that the people that are able to get through the academy are staying longer and people that report to them are staying longer.”
But beyond training, establishing a culture of change was one of founder Sam Walton’s mantras. Change is a rallying cry still often heard at Walmart associate meetings.
“That gives us a shot,” Mr. McMillon said of the emphasis on change. “What we’ve tried to do in recent times is to say the purpose is the purpose, the values are the values, everything else is open to debate and may change. And we’ll try to always explain why, but we’ve got to be ready to go because retail is about change.”
- CEO Doug Mcmillon On The Future Of Walmart – National Retail Federation
DISCUSSION QUESTIONS: What advice would you have for retailers looking to create a culture of change? What hurdles do retailers face when encouraging associates to embrace many of the new or soon-to-arrive digital tools?
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23 Comments on "Walmart CEO: ‘Retail is about change’"
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Managing Director, GlobalData
Change involves risk. Where there is risk, there is sometimes failure. Retailers need to be less risk-averse. Amazon loves risk. It also embraces failure and learns from it. We need more of this attitude in retail.
Fostering a culture of innovation is also critical. Being nimble, learning from outside the organization and listening to employees at all levels are all important components of this.
As Walmart has shown, the above is not just the preserve of small new startups.
President, Global Collaborations, Inc.
I agree. In addition, change does not need to be applied wholesale to the whole organization at once. Try the proposed change at a few stores, identify the organizational changes that need to occur to make change work and provide the employees training needed to fully implement the change. This approach mitigates the risk and enhances successful change.
Chief Executive Officer, The TSi Company
Walmart is a massive company with deep pockets, and they can afford to experiment and invest in new ideas. However, the average retailer cannot do so as quickly. So the most crucial factor is that ALL retailers still need to invest in training because without the skilled associate able to engage and assist the customer, sales will be lost, and that will prevent those retailers from succeeding and investing in the technology they will need to remain in the game.
Retailers need to spend dollars carefully and slowly in the technology they feel is right for their business and, most importantly, no matter what methods they choose, they must invest in store level training because without the associates “wowing” the customers, nothing else will matter.
Chairman & CEO, H2O+Beauty
Constant change is tough on an organization and it will require a lot of communication from the management as to why and how. It will also lead to different skill sets required by the associates, leading to more resource planning and recruiting.
Principal, Retailing In Focus LLC
Technology and the growth of e-commerce have accelerated the pace, but retailing has always needed to attract talent who are comfortable with change. An attitude of “we’ve always done it this way” or “this worked last year” is the kiss of death when most retailers’ fate is in the hands of their customers. While retailers don’t want to be purely reactive and tactical, they do need to attract associates with the sense of urgency needed to move quickly.
This won’t happen at Walmart. Their labor model will remain the same regardless of what a CEO says at a conference not attended by front line employees. Privately held and employee owned companies will always have a huge advantage in the USA, such as Wegmans, Publix, Trader Joe’s, HEB and Hy-Vee, to name a few.
Managing Director, RAM Communications
The most striking point I took away from the session with McMillon this week was his statement that the feeling shoppers have after they’ve left the store, website or app is what determines how quickly they’ll be back. He added that Walmart is now focusing on that moment, which seems like a big departure from the retailer’s traditional demand creation approach.
Content Marketing Manager, Surefront
Im glad to see that Mr. McMillon didn’t neglect the human component when talking about retail’s evolution. So often retailers pin their focus on new technology, without following through to adequately train and incentivize their staff in its implementation.
My advice for retailers? Two things: 1.) Tech is just an obstacle without an integrated platform on which to access it. 2.) Your front-facing employees are equally, if not more, important than any back-of-house processes. They’re still the ones interfacing with your customers and representing your brand!
Strategy & Operations Transformation Leader
As traditional retailers such as Walmart have proven, organizational change stems from the top. When you are competing with the Amazon Goliath, which is always operating as though its “Day 1,” being risk averse and avoiding change will simply not work.
A culture of change is not easy to develop, especially in retail, where you are in a constant state of planning, forecasting and running your businesses. The key to thriving and surviving in today’s complex retail environment is to not only preserve the culture that makes you unique, but also take on a more proactive, agile and flexible approach to innovation.
Fundamentally, retail is still all about providing an outstanding customer experience and having the right product, at the right place and at the right time. However, the tools and solutions available to drive that change have to be evangelized across the retail organization as the way forward.
Chief Amazement Officer, Shepard Presentations, LLC
The title states: “Retail is about to change.” That same title could have been used every year since retail became a noun. Okay, maybe change happened slower back in the early days of retail but, for the last 20 years, technology has continued to shape and change the industry. So if you don’t already have a culture that embraces change, it’s time. The key is to communicate it to everyone and to train properly. As the change takes place, there might be a little “pain” involved in adopting something new. What makes the change palatable is knowing the benefit. This should be clear to employees. If the change is going to be difficult, they should see light at the end of the tunnel. One final comment: If you’re hiring new people, be sure they have the personality that accepts and embraces change.
Strategy Architect – Digital Place-based Media
Change is the constant, so capabilities in change management are the critical success factor. The constant challenges posed by inertia and the inclination toward locking in processes can suck the vitality from businesses that want, and crave, innovation and improvement.
Retail management is increasingly about supporting critical thinking and new ideas, which too often appear to work against each other and constantly frighten nervous professionals who find it easier to just keep their head down to avoid being noticed. The recognition of innovations by shareholders, executives, managers and customers reinforce positive behaviors and instill a culture of innovations upon which new industry elements are born and grow.
VP Marketing, PebblePost
If you want to change your culture, start from the bottom up. Culture is not dictated or handed down from management. It has to start with your people creating the kind of environment/company that they want to show up for. The best example I’ve heard is that Stripe’s co-founder empowered its employees to come up with the values. They workshopped them, talked about what’s important and took the lead in defining what the company stood for.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
If you want real change and a change culture, you must reward failure. Only when people are not afraid and try new things will progress be made.
Principal, Anne Howe Associates
Woven into all the “change and tech” were two major concepts: a focus on how shoppers feel after their entire experience, and the human aspect of empowering associates to give them skills to help shoppers and influence sales. These human concepts get back to the very roots of successful retail. The oldest of skills — human understanding — now rises to the top of the radar for Walmart’s CEO. What’s old is new again!
Founder, CEO, Black Monk Consulting
My advice is that there is no option. Over 40 years ago in “Future Shock” Alvin Toffler said that the thing that distinguishes and defines the modern era is change in the rate of change. That assessment was made by looking at what we now know was the tip of the iceberg. So creating a culture of change is an imperative. The first step is to find ways of communicating that nothing good happens without change rather than focusing on the downside risk. As to hurdles, there are lots of them but two of the biggest are: slavish adherence to conventional wisdom and the fact that, in many cases, employees come to the job with more sophisticated technological skills than the people that manage them. It’s hard to “teach” someone how to use — and optimize — a tool if you yourself have no idea of its potential.
President, Ipsos Retail Performance
Tech needs to be positioned in a non-threatening manner. Technology should be there to help the staff, by taking away the lesser-value routine tasks and allowing the individual to blossom in delivering excellence in differentiated services to their customers. This should lead to an enhanced job satisfaction and a greater pride in the service offered by the business.
President, founder and CEO Interactive Edge
Most companies are indeed risk averse or change averse so the challenge is always around educating the retailer or supplier that it will be worth it. The technology needs to be implemented correctly and the users need to be trained appropriately so that it becomes sticky and the benefits are realized. Too often, everyone is so busy with their day jobs that there simply is no time to get off the merry-go-round to make the effort to learn a new skill and technology — but if they do, the time and resources saved will be significant. It will lead to happier employees/associates and, in turn, happier customers.
Some technologies that help to automate tasks that are time consuming and cumbersome help to prevent burn-out and departures of key staff. When there is a culture of change along with a plan for adopting new skills, it allows your people to be more strategic which leads to business growth.
Strategic Market Communications, Upstream Commerce
Retailers looking to foster an atmosphere of change can use and emulate Walmart as an example. Of course internal workings will be different for each retailer, but listen to what Doug McMillon says retailers have to do to form a solid foundation for change, meeting those challenges and preparing for those challenges and changes in the future.
Managing Director, Regency Analysis
Independent Board Member, Investor and Startup Advisor
Retail is about change because our lifestyles are changing faster than the rate of change of business models. In a technology infused world, the consumerization of everything is creating massive opportunities for retailers to reinvent the retail experience.
It takes people using technology to create new models of interactions and processes. How you organize your teams, how you manage decision-making and demonstrable risk-taking will go a long way to building a culture of change in an organization. Having a stated purpose and values are a first step, but they must be married to concrete actions that show commitment by the company from the board on to the first line managers. It also requires a commitment borne out in the budgeting process and how new ideas are nurtured and funded — that is where you keep your promises and earn the trust of your stakeholders.
A culture of change happens only when the CEO with the board and the C-suite are fully behind the changes and are focused on new future-oriented models of operation.
Co-Founder and CMO, Seeonic, Inc.
Set a vision for the retail chain and educate all of the employees. One of the elements of the vision must be that change is ongoing and the retailer must continue to evolve in the direction of its vision.
The challenges that retailers will face with new tools is getting acceptance by its associates to use the tools. Issues that employees will struggle with are fear of the unknown, how to use the new tools in their every day tasks, and worrying about being watched and tracked by the new tools. This is why it is so important for the employees to understand and accept the new retailer vision.
Embracing change goes hand in hand with embracing failure. Stepping out to create something new is inherently risky where there may not be answers readily available. Supporting change,with all the failures and successes that go with it, requires adjustments to comp structures, etc. as well as an evolution of culture.
Get close to your customers Know and understand what is important in their lives so that the selling model will “surprise and delight” the shopper.
Retail associates vary by store. Hopefully store runners hire folks who hold the brand in high esteem. That way they are the best brand ambassadors. Most retail associates tend to not be STEM graduates, so tools to improve their ability to “wow” customers have to come with the training necessary to achieve the objective of the digital tool. Without the training, the brand experience can be dysfunctional.
As we like to say, “Retail ain’t for sissies!”