The Value of Values with Walmart CEO Doug McMillon

Published Dec 5, 2023, 8:00 AM

All business leaders want to make a lasting impact, but very few have the scale and tools to change the entire planet.  

Doug McMillon has the scale and the tools. He is the CEO of Walmart and employs over 2 million people across the world. But it is Doug's commitment to leading Walmart based on its core values that makes him so important.

So I sat down with him to talk about his 33-year career, in which he went from packing trucks in the loading bay to becoming the chief executive, to discuss the value of values and how Walmart can have an impact on the whole world.

This is...A Bit of Optimism.

For more on Doug and his work check out: 

https://corporate.walmart.com/about/leadership/doug-mcmillon

https://corporate.walmart.com/about/history 

 

Doug McMillan might be the most important CEO in the world. That's because he is the CEO of Walmart, which is the largest company in the world both by revenue and the sheer number of people they employ. They have over two million employees. But it's because of Doug's commitment to leading Walmart into the future based on its values that makes him so important. So I sat down with him to talk about his thirty three year career in which he went from packing trucks in the loading bay to becoming the chief executive, to discuss the value of values and how Walmart can have an impact on the whole world. This is a bit of optimism. Doug, thank you so much for sitting down with me. This is really exciting for me. I honestly believe that Walmart is one of the most important companies in your one of the most important CEOs in America today because the scale that you work at and you're so values based as a company. I think you absolutely represent an image of what our nation could be like. Again, A, Am I wrong? And B? How does that feel.

Like a lot of pressure? We'd be real for a second.

I think that Walmart is and as we strive to fulfill our potential can be a really positive force in the world.

It's two point one million people.

We're in nineteen countries with retail operations, but we have operations and other places where we source and things like that. This is my thirty third year here. I started as a teenager. These people are for real and they are hard working, well intentioned people, driven by purpose with values and yeah, we have imperfections and things we need to get better at, but it's inspiring to be part of this and try to make a difference in the world by serving people in effective and broader way.

How would you articulate what Walmart stands for now?

Our current definition, which I still am displeased with two a degree, but it's been helpful, is that we're a people led, tech powered, omni channel retailer dedicated to helping people save money and live better. So what I like is it starts with we and people led, and we are proud of what we're doing with technology today and what we will do with technology. It's very exciting and I like that it says we're dedicated to a purpose. But if you simplify that a bit, it's a team dedicated to serving others. That's basically the essence of the place. And if I could boil Walmart down to one word, if I had to, and we've been talking about this for a while now, so there's some thought behind this. If I had, in my experience to boil Walmart down to one word, it'd be served And if you gave me two words, it'd be serving leadership, because that's what I see and that's who I think we are.

Warmot's had a bumpy road over the years. Some of us can remember it in the news. There were some scandals and in terms of healthcare and sort of not keeping people just below employees so they had to use public healthcare systems, welfare systems. There was a time where everybody wanted Walmart in their towns, and then we went to this weird period where people wanted Walmart not in their towns. Ay, what happened then, and how are you bringing Walmart away from that? Out of that, because it seems like the brand has made a turn. You become highly attractive again for talent and for the community.

It's a long story, and I'll try to be brief, but if it goes on too long, just interrupt me. But you know, the company started like a startup. It was a startup, and we were focused, and Sam was focused on serving customers and partnering with associates, all being in it together. And then eventually shareholders will benefit if those two stakeholders are pleased and happy and excited. As you grow, when you get big and people start criticizing you for harming mom and pops, we're not paying people enough for other things come up that are imperfect, and Sam Walton passes away. The American dream story of an entrepreneur fades in time and now you're a big company instead of being that startup. There's this natural societal pressure that comes with that. We were winning and we had a really good model that worked, but we weren't mature. We didn't see the whole thing. We didn't think about systems. We didn't think about our impact on the whole system. We thought about what we were good at. So when the criticism started and I was here in close enough to leadership to know what the conversations were like. It wasn't in one of the biggest jobs, but I was around. It started with well, we're great people, we are well intentioned, ignore it. We'd already been taught. Even Sam would say, ignore the newspapers because generally they were saying good things about us. That's not really helpful. We need to be humble and hungry, So ignore the paper because then the paper starts saying bad things and we're still in that kind of they don't understand us. They don't know how good hearted we are. They don't know. They just don't know. So that phase of ignoring them didn't work. The criticism builds, so then we went through a phase of well, just tell them the truth, so fight back. So if they say this, you tell them the truth. Well that was a later news cycle and nobody cared about the good news and the damage has already done. So that phase lasted for a while. And then you've got to give Lee Scott a lot of credit. Lee was our CEO at the time and I was reporting to him. He started a conversation with us about we are imperfect and we know that and we can do things better. So instead of fighting back with facts, let's take a period of time and go see the people that think they hate us and hear the harshest criticism we can find. And what has merit let's apply it, let's actually focus on making the company better. And there's a weird moment for us where there's a speech Lee gives because we don't normally give speeches.

We just talk to each other.

But two thousand and five, shortly before Hurricane Katrina hit in New Orleans, he made a very aspirational set of commitments for us that were related to people and the planet. And it felt very uncomfortable for a lot of people around here because it was so aspirational, but it's actually what we needed, and it was informed by all the criticism we had been hearing. Some environmentalists and others that didn't want to meet with us met with us secretly because they didn't want to be seen with us, and gave us that harsh criticism. And once we started seeing the merit of some of those things, we actually started changing. Then Katrina hits Walmart helps in New Orleans in a way that the country sees it, which feels good. For a minute there, people thought good things about the company. Lee then turned to the rest of us and said, did you like that? And we're like yeah. He said, okay, what would it take for us to be that company? Every day? And things started to change. But then other things happened down the road. The Internet happened, and we were slow to embrace it, and we were under pressure financially and otherwise. So it's taken a while for us to kind of get back on our feet and understand that we need to change a lot all the time. The thing that happened when I first moved into this role is that the leaders paused for a minute to say, wow, it looks like we need a lot of change. Our sales weren't declining in some areas, we didn't have much of any commerce business. We could see where the customer wanted to go, and we weren't there. After a period of discussion and reflection, we realized we really just need to focus on what won't change and shouldn't change, and then be open to changing everything else and tell people that. So we solid fied on purpose and values the culture to serve those values, and then said things like if we don't need stores, we won't have stores. If customers don't want them, we won't have them, which gives you a real license and a kind of a breadth to drive change.

You connect with and talk to a lot of the CEOs from the biggest companies in the country. Do you have an opinion about how they speak behind the scenes versus what the direction of American businesses? I know sometimes there's two narratives. You know, the number of times that I've had conversations with CEOs where they will happily admit that Wall Street is a frustration and the pressures that they feel that they are making decisions that they know aren't necessarily good for the long term value of their businesses, but they make them anyway. And it's kind of amazing that they will talk about those things behind the scenes, but they'll never obviously talk about those things publicly. I'm very curious because you a have been at the company for a long time. I think you're able to take risks that a lot of them probably envy that they wish they could take some of the risks that you're taking, make the changes that you're making to adapt your company for a new world. Do you have an opinion of sort of like what the direction of American business is going and what we need our leaders to do.

To take it there. I have a big advantage.

We at Walmart have a big advantage in that we have a Walton family that still owns about half the company. They have a long term view. They care about things like values and purpose. When I meet with them, they ask me about things like becoming a regenerative company, working on sustainability. How are our as sociate's doing, Are we paying enough? Talk to me about healthcare? Good stuff I do, and we do have the opportunity to make longer term decisions. So we've taken hits for investing in wages. We've taken hits for investing an e commerce and technology that are short term painful in mid to long term beneficial, and so I'm grateful for that. If I was in a different situation, I can totally understand how this short term pressure can create an imbalance. Boards need to have some guts, CEOs need to have some guts, and the people that are short term investors don't need to be focused on into heavily weighted. I got tickled one time we were talking to an investor and they were asking me about the long term, long term, long term, and then they defined long term and it was less than a year, and I was like, dude, your definition is so different than mine. I look at this as we want to make decisions now that help us to be here for the next generation. I believe this company has some really good characteristics. It tries to figure out how to give people a good value. We don't try to figure out how to charge more. We've tried to figure out how to charge less. We work on the environment, We do things that I would like the next generation to have access to. So my an our view is we're trying to make decisions that will help us be there for the next generation of retail. But I do talk to a lot of CEOs who want to do that, but they can't because of all the pressures. It's just it's hard in some circumstances.

Are you optimistic that we will get to a time where those CEOs can be more long term focused, can be more like Walmart?

I think some do.

So I don't mean to throw everybody in one bucket, and I don't think you do either.

It's a continuum, but the balance for a lot of years has been tipped to short term.

Yeah, you know.

I mean, even when the Business round Table came out and said we have a view that we should serve all stakeholders, that was really a time horizon issue. Some people really criticize that and said, no, business should just focus on profit. Well, you can have profit if you don't have a planet. It's just a question of time horizon, and we just have a longer term horizon. So that was the business community trying to say to the world, we want to have a longer term horizon and think about systems and think about these various stakeholders. And some of the pressure we got back was stay in your lane. So I do think it's a continuum to change it. I'm not sure what we have to go through to get there. It's hard for me to imagine something changing quickly. There's so much volatility in the world. We were talking about this recently. Just processing the volatility and the direction of things as difficult, and to resist that and make good long term decisions takes leadership.

And you knew Sam, right, you knew Sam will I got to meet Sam. We got to meet Samuel. What was it about what he stood for that inspired you to want to have a career. You spent, as you said, thirty three years here. I mean you could have gone off and had other jobs and done other things, and yet you've worked your way through this organization done so many things? What kept you here?

When I was sixteen, my dad, who was a dentist, decided to move us to northwest Arkansas. I open a practice here, and shortly after he said, you're going to pay your own way through school, so you'd better.

Get to work to make some money.

And so I went to McDonald's and the Craft Cheese plant, and there weren't that many employers in Bennville, and the Walmart warehouse and the walmrt warehouse paid six to fifty an hour, which was more than the three thirty five at McDonald's. So I took the Walmart job, and I started unloading trucks during the summer while I was in high school. And immediately the people that I was around in that warehouse were infectious in terms of their love of their work and the company, and the stories they told about their career, their life and about Sam and about what the leaders at that time were doing. There was this one guy named Johnny that I was unloading trucks with that was talking about how he had two hundred thousand dollars in profit sharing in a new truck in the parking lot, and Walmart had changed his life and it's a great place to build the future. And so I'm sixteen years old thinking I don't really love unloading trailers when this heat, but wow, there's something going on here. And every step along the way. I went to school and went to graduate school, and worked for Walmart or the Walton owned bank group during that period of time, and then I came back here as a buyer after completing my MBA program started nineteen ninety one in the home office. All the way through, including that moment, the people that I came into contact with were the people I wanted to be around, and I loved how they thought, and I could see a really broad future.

We'll be right back.

What was the biggest surprise? I mean, you lead the largest company in America. Both sides of the coin, which is one is like, Wow, I have the ability to do this that I want to get done, and why can't I get this thing done that I want to get done.

I think the surprises that went through my mind was just I thought, I loved this company and fell a lot of ownership. But when you move into that job, there's a whole other level of that. Yeah, but the other thing is risk taking. Yeah, I'm not a person who gambles or take risks. I'm a pretty conservative person. But it became clear that for the company to be here in the future, we had to do some more dramatic things, and that was tough for me because I'm more conservative, and I've had to learn to be part of taking some really big risks, whether it's the wage investment or the acquisitions we made. Without change, you can't succeed with change comes risk, and on a platform like this, it's visible to everybody, so that creates a lot of personal risk and I had to learn to get comfortable with that.

Was the company open to change prior to you coming in or was it trying to sort of just stay the course?

Mixed bag?

Mixed bag.

We have so many people in so many different circumstances. Almost anything you want to say about Walmart's true somewhere fair. So I think generally we had to take some bigger risks and the bo our Chairman Greg Pinner, the management team that I was a part of, was up for those buying jet dot Com, buying flip cart and phone pay in India, investing in the modernization of our tech stack. We had a lot of tech debt. We've largely dealt with that now. The wage investments twenty fourteen, twenty fifteen, we'd made some big wage decisions, and we had one day when we went to New York and our market cap went down twenty billion dollars because of our wage investment. That was a tough day in one way, but it's also like the best day. Those are the best days I've had in my career, is when we've been able to announce big wage investments for our associates, and Wall Street doesn't like that at times.

It's so funny, though. The companies that I admire are the ones that are willing to take risks to do the right thing cvs taking cigarettes off their shelves because it's the right thing to do. It plays to their purpose. They get punished by Wall Street. American Airlines making a mid contract decision to pay their flight attendants and their pilots more have to and ask for nothing in return. Wall Street punishes them, and yet in every circumstance, the stock price in the EBITA come back higher than they were before because they were the right decisions to make. It must be very satisfying knowing that when you make the right decision, it pays off for the long term holders. And what's something specific that you've been a part of at Walmart that if every project or everything was like this one thing that you were part of, you'd be the happiest personal life.

It's probably the experience that we went through before we set our sustainability goals. So the introspection around how are we impacting the environment with products and waste and things like that, and learning together what sustainability meant, and realizing that you can make decisions to remove packaging, change packaging, of reading, going on field trips, experiencing things differently, listening to the critics. That was a real sweet time and it culminated in what it described earlier, which is a mindset shift for the company that's now been in place since that mid two thousands period. A few of us had time to go and meet with Paul Hawkin. He's a famous environmentalist, and what I was expecting and was prepared for a discussion about the environment. And before we could talk about the environment, Paul asked us questions about our people. Tell me about your wage rate, talk to me about healthcare. It was people people. I later learned I read a book I think it's called the Natural Step that describes as system conditions for sustainability, and one of the principles is if you don't take care of people, they will kill the last animal and harvest the last plant to take care of their family. So people in the environment are obviously light. And so when I think about our footprint internal and our relationship with suppliers, designing this in a way that people are taken care of through the process, our people paid over time in the factories that make products for us, regardless of the country or company they work for, in addition to our own associates. Right, that is so woven in. And that was a really meaningful conversation.

And it's so obvious when you think about it, which is when somebody's in a survival mode, the environment is the last thing there. The hierarchy of needs, hierarchy of needs. As long as somebody feels taken care of, then they can do the thing to take care of the people in the environment around them. That makes so much sense. That's so good. Can you tell me an early specific, happy childhood.

Memory my dad coming home from Vietnam?

Tell me what happened?

I always went very young, But I remember a mom telling me we're going to the airport to get him.

Walk me through that whole at whole.

I'd rather not get too emotional.

But and how how old were you? Oh?

It's probably four, really really young.

Of all the amazing things that happened in your life, where you could have immediately said, here's something that stands out for my childhood, what was it about that memory that it's the first thing that you said immediately that you gave no.

Thoughn we need our parents.

My dad passed in twenty twenty, but I had this combination of a dad with really high expectations, unconditional love, but really high expectations, and a mom that was an effective encourager, whispering a mayor, you can do it, and she is super competitive. So that combination of characteristics was really, you know, a great environment to grow up in.

So what specifically was it about that memory that you went to their.

First Just the safety and the joy. I think being in a home where one of your parents is away in a place that's dangerous, you feel that with your remaining parent, So that reunification meant everything was going to be okay.

What would your dad say about the work that you do.

Now, do a good job, don't let anybody down, and take care of yourself.

He was worried about me.

The thing that I love about that answer the fact that you went there, but even the story about the environmental that that stands out as a pinnacle point in your career is they're all reminders to take care of people, and they're all reminders that you keep people safe, and then everything else sort of falls into place. I think this is poetic. I think it's beautiful. I think in a really magical way, you've become your father. I hear the way that you speak, and I hear the way you talk about your people, and you do have high expectations for your people, yourself, your organization, but not at any cost that taking care of people and pushing harder. It's in that order that is your job now for the people in your charge, which I think is a beautiful thing.

Can we be back to business?

Will be right back after a word from some of our sponsors. I just learned something about Walmart recently that I didn't know, so I've railed very public that GE used to be the leadership factory for America and that many of the standard normalized ways in which we run American business today. If not global businesses, so goes American business, so goes the world. You know, where you have mass layouts and an annualized basis. It's a go to strategy to make the numbers work. Where we pit our people against each other, quarterly results become king in short termism is the name of the game. And you said, you know, somebody asked you about your long term plans and it was less than a year. Where that's so normal. I've been saying that we need a new leadership factory where it used to be that if you worked at GE, you could go run any company. But look what's happened to American business. They've all become ges and we need a new model. One thing that I learned about this recently, seventy companies are run by alumni from Walmart. Walmart has become the leadership factory for America. I don't understand why more people don't know that when you're preaching these values of people first, you're preaching these values of keeping people safe. I think more people need to know that those values are starting to spread to American businesses and it is entirely possible that the way that you try to lead could actually become the future of American business. Making change and doing the right thing, even if you get punished in the short term by Wall Street, actually will become more of the model. I think people need to know that. Why don't Maybe Jack Welch is really good at preaching, and I don't know. Sometimes you guys are too humble.

We're not writing books.

You're not writing books.

We're focused on something else.

Right, He wrote a book on leadership and put his own face on the cover. That should tell you everything. Yeah, I guess that's what it is. But I want people to know that that's happening. Yeah, that must make you proud.

It does.

Yeah, we have so many people, we have so many leadership jobs, and there's so much breadth and complexity in our business that it's a really good training school for CEOs. And there are people that have left to go run big companies and also people that have left to go do their own startups. So we cheer for all of them. We're able to retain talent and we're not worried about those departures. And I hope that what they take with them is a purpose driven, values based approach, and that's what I see. I'm excited about what that'll mean long term. Many of them are in ownership situations where they've got this short term pressure that we talked about earlier. But a lot of great people out there doing good work, and when I run into them in places, it's always wonderful to see them.

So let's have a real long term question. So what is your vision for twenty years for Walmart, thirty years for Walmart, fifty years for Walmart? Like what is Walmart's role in our nation and around the world.

We just need to achieve full potential. It's a lot of people and there's a lot going on, and we're not as good as we can be. And if we are, we will help people in ways that we've yet to help them, and it'll be more than just saving them money, of course, it'll be surprising, delight, saving them time. People are so busy and they need less stress. And one of the reasons why e commerce has done so well is because it can save you time, produce new items to them that surprise and delight. But then there's healthcare, and there's financial services, and there's the impact on communities in the planet, and I think we've got an opportunity. And today we around the world are learning about healthcare. We're in an exploration phase.

In the US.

We've got a little over forty healthcare clinics. We operate a large pharmacy business, a vision business, optical hearing, OTC, over the counter drugs, but we haven't been in the care business. So learning about how the US healthcare system works and the role of value based care and taking on risk for someone's life with the incentives being to keep them healthier, not to send them the hospital. We're working on all of that. Financial services people need to save more. Too many people don't have the financial literacy skills that they need. My grandfather took me to the bank when I was a really young guy, I was probably ten or eleven years old and talk to me about compound interest and helped open a savings account. Not a lot of kids are getting that opportunity. So if we can design financial products that help them learn and help them manage whatever they make. You can make a little or a lot and still blow it. You know, we need to help people manage their money better. And then with communities, you know, creating jobs, paying taxes, all the stuff we always do, but volunteerism and other things that we can do to help strengthen local communities. I'm much more optimistic about the world, by the way, when I think locally. I travel all the time, and I go to stores and communities where diverse people like each other and they're working together.

Well, there's love and warmth.

And then I read the news nationally globally and it just sounds like, you know, everything is broken, but when you experience it firsthand, it's communities can be part of the solution. And then there's the work on the planet and not just stopping harm or declining how much harm is done by consumerism, but finding ways to make it regenerative and have the campsite be better than the way we found it, not just the same as the way we found it. That's part of the agenda to cause people to live better. So if walmart fulfills its full potential, will show people what it's like to act ethically, have good intentions, be servant leaders, and make a difference in their lives. And it's driven by purpose, Like you know, when you and I first met, that power of the why and purpose is the big motivator to me.

This is so magical and it's the reason why I was excited to talk to you, and it's the reason why I so admire Walmart. It's a company that believes in something bigger than itself. It believes in community, it believes in service. It's a company that is driven to keep people safe, to feel safe. It also taken care of as you talk about your heavier investments and looking into healthcare and how you can literally protect people's lives, how you can help people's paychecks go further, whether it's them save money when they're shopping, but also how to manage the money and look after their money and offering them financial services in terms that they can understand. Even that's appealing to me when I talk to financial advisors that they make me feel like an idiot and they make me not want to do things because I feel dumb. And the fact that Walmart is willing to help me sort of understand how to make my paycheck go further is an amazing thing. And all of that in the context of the world we live in. All of those things can happen if we don't protect the world we live in. And as you said, it's not just about reducing damage, but leaving the campsite in better shape than we found it is. I don't think being talked about by anybody. People keep talking about preventing something rather than actually rebuilding.

Even our own associates. We've got two point one million associates around the world. Just think about the impact we can have with them if we can help them with health care more effectively, or financial services. We've got hundreds of thousands of them that own Walmart shares. How do we help them understand everything about their money, including a longer term equity investment, so that they have wealth when they're like Johnny the guy was unloading trucks where they had two hundred thousand dollars in profit sharing and his job was unloading trucks.

That's amazing.

How do we create more and more of those stories in today's environment is part of our aspiration.

Doug. I wish you nothing but God's speed and good fortune. I think that what you were doing and the impact that this company can have on American business and on the world is not only profound but well needed. And I for one am a huge fan. So thank you, so so much for helping.

You've been an inspiration.

Thank you and continually appreciate it so good. If you enjoyed this podcast and would like to hear more, please subscribe wherever you like to listen to podcasts, and if you'd like even more optimism, check out my website simonsinek dot com for classes, videos and more. Until then, take care of yourself, take care of each other.

A Bit of Optimism

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