Walmart is by far the largest company in the world. It is the Fortune №1 company. Being in such a big corporation had led me to see how the retail giant manages a $500 billion business and stays on top of the world.
I am currently working at Walmart as a Strategy & Innovation Manager. This means that my job is to move quickly across business divisions, build initiatives that solve problems, test them, and move on to the next challenge. In this role, I have the opportunity to craft strategies that underpin multi-billion dollar projects at Walmart. With such scale and dynamic range of workstream, I learned some great lessons that apply not only in the retail industry but life as a whole.
Here are the key takeaways if you don’t have 3 minutes reading this:
- When the size of the prize is amongst billions ($), there’s a bigger fish to fry.
- You’ll never hit 100%, so don’t even try to be a perfectionist.
- Users never respond the way you want them to.
It’s been six months since I joined Walmart’s Strategy & Innovation team here in its headquarters. I’ll admit — that six months is a bit early to start writing what you’ve learned and should take away from experience. Still, I am learning so much so fast that even such short experience from 6 months of tenure, it is still valuable to share with the public.
Here’s what I learned.
1. When the size of the prize is amongst billions, you have a bigger fish to fry.
Focus on the most impactful actions and choices. At Walmart, everything is big. Each Walmart store generates about $70 to $100 million in revenue* every year. When you multiply that by 5,000 stores, well, you really have to start thinking about what actions and choices will lead to the maximized benefit for the whole chain.
The principles of 80/20 have always been at the center of our team’s thinking. Where to focus and where to deploy resources to bring the greatest amount of benefit to the greatest amount of stakeholders, is key to this thinking.
This principle is really about what to focus on. If you have an option to do X or Y, then you really have to evaluate the projected return on investment (which is your time and resource). Strategic thinking is about making good choices, so it’s about “what to do”. But strategic thinking is also about not making bad choices as well. Hence it’s also about “what not to do”.
2. You’ll never hit 100%, so don’t even try to be a perfectionist.
Even if you plan on a project for months and you get into every single granular detail and go full amount on capital allocation and deploy resources, there is a ceiling point where you’ll start seeing diminishing returns. You will never be able to achieve 100% of the intended benefit because of this. Why? because in every activity that you do, there’s always an optimal point where you’re spending just the right amount of time/resources and the results are just the right amount as well. It’s extremely important for you to identify this optimal point. Otherwise, you are spending your time/resource more than you need to. Hence, decreased productivity.
Walking away with ~80% of the intended return and moving on to the next project is better than getting 95~98% and spending months (again, there’s no such thing as 100%). You’re also missing out on additional projects that you could be working on to maximize your contribution to the team.
Move fast and break things (thanks Mr. Zuck). (1) Identify a project that it will yield the greatest amount of returns, (2) put your effort in, and (3) achieve satisfactory results (~80%). Once you do that, don’t go over 80%; conclude and find a new project to work on.
Don’t hold onto a plan for months, even years for some people. It’s not good.
But again, with Walmart’s standards, even a small benefit leads to billion-dollar opportunities. Saving a store $200,000 a year isn’t that much if the store earns $70 million per year. But if you multiply $200,000 by 5,000 stores, well, it’s now a billion-dollar cost reduction project.
3. Your users will NEVER respond the way you want them to.
This one is the most significant takeaway that I’ve learned so far working at Walmart. Crafting a thoughtful and sound strategy is one thing, but making sure that they work in the real world is another.
Even if my product (often, it’s a strategy) is good from our team’s perspective, it might not be the case from the eyes of the operators. The store associates. The customers. That is why you have to stay close to your users. For me, my users are often store associates and vendors for Walmart. I try to think like a store associate and vendors that come into the store for whatever service that they provide. I visit the local stores and talk to the end users. I ask them good questions and they are happy to give me good feedback (most of the time).
If you have a new strategy or even just an idea for improvement, you need to get out your comfort zone (office) and start talking to real users. You need to visit the local stores. Hear out the users’ pain points. What are they saying? What do they think of the change you’re considering to bring in?
Again, I’ve only been with Walmart for 6 months, so I’m definitely going to have more lessons learned from Walmart. I’m planning to write them in a series of articles so that there is some continuity to it. As I progress through my career at Walmart, I’ll be updating this from time to time as well.
*Here I’m only using public data and I’m using it to create a ballpark range of $70M to $100M. Actual per store sales data is confidential, so I am not publishing the actual range. Note that $500B/5,000 stores is $100M.
I’m an employee of Walmart and this post is NOT written on behalf of Walmart Inc. This is entirely my (Christopher Chae) opinion and perspective. This article does NOT contain any proprietary/confidential information to Walmart. I intentionally did not name or explain any initiative or strategy that involves Walmart to protect Walmart Inc.