Do you want to learn the failures, successes, and journey of the founder of Wal-Mart?
Want to know what drove Sam Walton to business greatness?
In this article, you’ll discover the 12 lessons that I’ve learned after reading Sam Walton: Made In America and how you also can learn from Sam’s failures, successes, and journey to wealth.
Sam Walton: The Person
Sam Walton single-handedly built Wal-Mart into the largest retailer company in the world transforming the way America shopped for goods all the while making himself one of the wealthiest men in America.
Sam Walton was born in Oklahoma in 1918 and his family moved to Missouri at the age of five. He grew up during the age of the Great Depression and learned the value of a dollar at a very young age from the hardships of that era.
He got his first taste of the retail business in 1940 at the age of 22 as a trainee at JC Penny in Iowa while earning a salary at $75 a month. This happened shortly after graduation from college from the University of Missouri. In 1942 Sam resigned from JC Penny and joined the military during World War II. Nobody imagined that just over 40 more years he would be named ‘wealthiest man in America’ earning billions.
After leaving the military he bought his first retail store in 1945. He decided to take over a Ben Franklin and bought it for $25,000 (approximately $330,000 today). He borrowed $20,000 from his father-in-law and $5,000 from his own savings. Although, he ended up losing his first retail store from a bad lease agreement he still pursued the retail business.
Sam Walton: Made In America, is an autobiography about the successes, failures, and journey of the Wal-Mart story in its earliest developments. Mr. Walton goes into detail on personal occasions, family responsibilities, and commitment to his associates, customers, and investors as the Wal-Mart company and brand grew.
After reading this book, you will not go into a Wal-Mart store without having a sense of pride, accomplishment, and motivation knowing the ups and downs of the Sam Walton journey.
Sam Walton: Made In America
Sam Walton: Made In America, is a book that Sam wrote on his deathbed. He wanted to leave his legacy. Understanding the pressure and commitment in writing this book makes you realize the immense value that was put into this book.
Perhaps one the most successful businessman in the world during his time. Whether you like Walmart or not. The story of Sam Walton is a true and genuine rags to riches story. Who far extended many of the top wealthiest people in the world at that time (1982).
During Sam’s business endeavors, he fundamentally changed and innovated in how retail stores operated constantly challenging the retail industry for many decades, e.g. implementing discount stores, establishing Supercenters with groceries, and even producing wholesale outlets like Sam’s Club.
Sam Walton: Made In America, is a book that is rarely read. Possibly due to the bad marketing or even the title, which probably alienates half the world that doesn’t like America. Nevertheless, this is a book that is a true gem within the business arena and needs not to be overlooked. In fact, it needs to be studied.
To consider the value of this book. It’s even been said of Jeff Bezos, founder of Amazon, who walked around with this book, he studied it and read it hundreds of times before implementing Sam Walton’s principles into his own business. He used it as his guideline to build Amazon. And the truth is, if it is good enough for Jeff Bezos, it must be good enough for anyone who really is serious about business success.
12 Gold Nuggets To Learn From Sam Walton: Made In America
I personally find biographies or autobiographies in of itself to be interesting and I enjoy reading them. But when you have an autobiography, about not only possibly the wealthiest man in modern history, but a true man of strong character and one that can actually impact and change the way you look at business and life. It makes you stop, and ponder not necessarily because of the history associated with the largest retail chain in the world but because of the immense dedication to work, family, and people.
People are worried about all the wrong things. You and I probably worry about the wrong things. We are reading the wrong things. We are doing the wrong things. And we are constantly pressured to follow everyone else.
What I mean by wrong, not that it is immoral but that it is inefficient. There are so many books, lectures, media, etc. and we can’t possibly read or view them all. But what we can do is not relearn what somebody already learned.
In other words, scientist generally agrees that the earth is round. We don’t need to test, experiment, or go to space to get a visual just to prove to ourselves that the earth is round (I suppose if you truly want to or believe that you have been lied to, then you could, hint flat-earthers). However, we can continue where they left off. We can continue to search the universe and build off of what others have already learned.
Sam Walton spent a lifetime researching, studying, and implementing his successes. We would be wise to build off of his lessons in these golden nuggets.
Gold Nugget 1 – Passionately Commit to Achieve Success
Sam Walton states, “commit to your business. Believe in it more than anybody else. I think I overcame every single one of my personal shortcomings by the sheer passion I brought to my work. I don’t know if you’re born with this kind of passion, or if you can learn it. But I do know you need it. If you love your work, you’ll be out there every day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion from you like a fever.”
This lesson may sound too simple. However, the reality is most do not act out this rule. We simply do not commit for the long-term. We give up or skip off to the latest and greatest trend or fad. You must learn to commit! You must learn to passionately stay focused.
It may sound strange knowing that Sam Walton was 66 years old when he was named the richest man in America in 1984. It may even seem, stranger, that it took him nearly twenty years in the retail business before he launched his first Wal-Mart. And it took him 8 more years to build up to 38 stores, 1,500 employees, and sales of $44.2 million before going public. Then it took another 17 years to grow to 1,198 stores.
Moreover, if you look at others who committed in their life-long work you will see the truth of this principle. Warren Buffett bought his first stock when he was 11 years old and many decades later he became a billionaire at the age of 55. It took Thomas Edison 1,000 unsuccessful attempts before finally succeeding at inventing the lightbulb.
There is a pattern and the concept is simple. Commitment cannot be overlooked, overstated or undervalued. Commitment is the single most important principle, not just in business but in all aspects of life.
Once you commit you will produce energy, you will become a visionary. You will embrace the outcome before the actual result. As you push your commitment, your passion will increase.
Your passion will produce a natural flowing attitude towards work. This work becomes hard work but doesn’t feel like hard work because the passion becomes the natural energy to produce. To Sam Walton and all the hard work he put in, it didn’t feel like work to him at all. To him, it was his passion that made him lead so others may follow.
Also, passion is an important ingredient of true leadership. Sam Walton developed a mission. To Sam, money was not the issue;
“Here’s the thing: money never has meant that much to me, not even in the sense of keeping score. If we had enough groceries, and a nice place to live, plenty of room to keep and feed my bird dogs, a place to hunt, a place to play tennis, and the means to get the kids good educations — that’s rich. No question about it. And we have it. We’re not crazy. We don’t live like paupers, the way some people depict us. We all love to fly, and we have nice airplanes, but I’ve owned about eighteen airplanes over the years and I never bought one of them new.”
His attitude, passion, and commitment to his mission in business lead many people to help push the growth and scale the business to where it is today, even after his death.
Gold Nugget 2 – Share The Profits And The Success With Those Who Helped You
Sam Walton states, “share your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations. Remain a corporation and retain control if you like, but behave as a servant leader in a partnership. Encourage your associates to hold a stake in the company. Offer discounted stock, and grant them stock for their retirement. It’s the single best thing we ever did.”
One of the interesting experiments that I’ve heard is when a group of scientist took monkeys to grow and nurture them in a cage. They would, of course, pass food through a small door opening. They would later take the same monkeys and free them in the jungle. Many of the monkeys would not survive even though they were now free and have plenty of food
Whether the experiment is true or not. I believe the concept is real in our understanding of how people’s psychology work. We are a product of habit and complacency. We like the security that our hourly wages or salary provides. We are taught that we must be on an hourly wage. Our parents, grandparents were on an hourly wage. However, we are limited when we become salary minded, that is, like a W-2 employee we get told how much to make, when to take off, how long to take off, when promotions are available, etc. Being limited hinders our minds in innovation, experimenting, and growth.
However, many don’t think about becoming entrepreneurs and those who do think may find it difficult or hard to start. This is because it is not natural to us. We are not taught this in school. When we escape the W-2 mindset we have to learn how to survive, learn the rules, learn how to succeed in the same way those monkeys would need to learn how to survive in the jungle.
Sam developed a system that allowed his managers and associates to share the profits of the company, a.k.a. profit sharing. Profit sharing allows employees to become partners instead of the company looking at their employees as subordinates. Sam Walton made a lot of money but he made a lot of people wealthy through his profit-sharing strategy.
When employees become actual partners they evolve differently, the mindset changes, knowing that they are part of the business and not simply an expendable subordinate.
Sam says, “if you take care of your people, it is our people who will take care of your customers and the business will take care of itself.”
Gold Nugget 3 – Motivation Is The Fuel To Achieve
Sam Walton states, “ motivate your partners. Money and ownership alone aren’t enough. Constantly, day by day, think of new and more interesting ways to motivate and challenge your partners. Set high goals, encourage competition, and then keep score. Make bets with outrageous payoffs. If things get stale, cross-pollinate; have managers switch jobs with one another to stay challenged. Keep everybody guessing as to what your next trick is going to be. Don’t become too predictable.”
Sam Walton believed in people, he believed that teams and partnership wins. No one becomes successful without the help of others. Sam’s motivation and dedication to the retail business fueled everyone that worked for him or around him. Call it an obsession, call it passion, but call it a must to thrive.
“Two things about Sam Walton distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction,” says David Glass, former CEO of Walmart Stores and current owner and CEO of the Kansas City Royals.
Gold Nugget 4 – Communication
Sam Walton states, “communicate everything you possibly can to your partners. The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there’s no stopping them. If you don’t trust your associates to know what’s going on, they’ll know you don’t really consider them partners. Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors.”
Sam’s commitment flows from his trust to his partners and associates. This commitment relies on true communication. There can be no true partnership if communication is not there.
On a side note, it is interesting to know that one of the top skills that hiring managers seek out is communication skills. It is one thing to have the know-how but it is entirely different when you don’t know how to communicate the know-how.
Communication skills go along with sales, networking, and building relationships. You will not have any business or any successful business without communication skills.
Sam writes, “you can’t merchandise the world by sitting at your desk. The folks on the front line – the ones who actually talk to customers – are the only ones who really know what’s going on. You’d better find out what they know.”
Gold Nugget 5 – Recognizing and Appreciating People
Sam Walton states, “appreciate everything your associates do for the business. A paycheck and a stock option will buy one kind of loyalty. But all of us like to be told how much somebody appreciates what we do for them. We like to hear it often, and especially when we have done something we’re really proud of. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.”
It’s been said that the best way to motivate is to compensate. Although there is much truth in that. Appreciating and recognizing people for their work and efforts will go a long way. When an organization recognizes their associates or partners loyalty will follow. And Sam knew this.
Sam says, “treat people the way you would want to be treated. You should set high expectations in everything that you do. It’s your people who make the difference.”
Gold Nugget 6 – Celebrate Accomplishments
Sam Walton states, “celebrate your successes. Find some humor in your failures. Don’t take yourself so seriously. Loosen up, and everybody around you will loosen up. Have fun. Show enthusiasm always. When all else fails, put on a costume and sing a silly song. Then make everybody else sing with you. Don’t do the hula on Wall Street. It’s been done. Think up your own stunt. All of this is more important, and more fun, than you think, and it really fools the competition. “Why should we take those cornballs at Walmart seriously?”
One key attribute that Sam Walton had was with his people’s skills. He even admits that he had this special charisma with people. Sam states, “now, I’m a friendly fellow by nature. I always speak to folks in the street and such.”
Sam’s genuine and affectional personality carried over to his celebrations to his team members. He’s been known to go crazy and have his managers go all out when a goal is reached. It’s been said that managers would dress up as clowns and greet customers for a day and even shave their heads. The enthusiasm was alive and well lived at the Wal-Mart Stores.
Gold Nugget 7 – Listen and Learn From Others
Sam Walton states, “listen to everyone in your company. And figure out ways to get them talking. The folks on the front lines the ones who actually talk to the customer are the only ones who really know what’s going on out there. You’d better find out what they know. This really is what total quality is all about. To push responsibility down in your organization, and to force good ideas to bubble up within it, you must listen to what your associates are trying to tell you.”
Author Jim Collins writes about a story about Sam Walton;
“A Brazilian businessman once told me how he’d sent letters to the heads of ten U.S. retailers in the 1980s, asking to visit to see how they ran a retail operation. Most didn’t bother to reply, and those who did send a polite “No, thank you.” All except Sam Walton.
When the Brazilian and his colleagues stepped off the plane in Bentonville, Arkansas, a white-haired man asked if he could help. “We’re looking for Sam Walton,” they said, to which the man replied, “That’s me.” Walton led them to his truck and introduced his dog, Roy. As they rumbled around the front cab of Walton’s pickup, the Brazilian billionaires were pummeled with questions. Eventually, it dawned on them: Walton had invited them to Bentonville so that he could learn about South America. Later Walton visited his friends in Sao Paulo. Late one afternoon there was a phone call from the police. Walton had been crawling around in stores on his hands and knees measuring aisle widths and had been arrested.”
Sam Walton wanted to know what they knew or see if they knew something that he didn’t. Sam humbled himself enough to took time out to listen to others.
It is also interesting that Sam Walton read every single book that he can find on retailing and running a store.
Sam says, “I learned a lesson which has stuck with me all through the years: you can learn from everybody. I didn’t just learn from reading every retail publication I could get my hands on, I probably learned the most from studying what John Dunham (Sam’s competitor) was doing across the street.”
Even after Sam was one of the wealthiest men in America. There is another story that Sam talks about how he got caught walking around his competitor’s store, The Price Club, with a pocket recorder.
Sam writes, “Once I was in the big Price Club on Marino Avenue in San Diego, and I had my little tape recorder with me like I always do, and I was making notes to myself about prices and merchandising ideas.”
A security guard noticed what he was doing and confiscated the pocket recorder. Sam later wrote to his friend who owned The Price Club to get his recorder back and promise not to spy on him again.
Sam was so committed to listen and learn about his competitors that he would go to great lengths. In fact, his own daughter (Alice) states about the many trips they made all over the country so Sam can go look at stores.
Alice says, “He would drop me off, and I would show my horses, while he would go look at stores. The store thing was always a part of it. It wasn’t that he wasn’t supportive or fair. It was just something he had to do, and we understood it.”
Helen, his wife says, “You know, we would go through a good town, and he knew about some store there. I would sit in the car with the kids, who, of course, would say, ‘Oh no, Daddy, not another store…’ We just got used to it. Later on, Sam never went by a Kmart that he didn’t stop and look at it.”
Sam was a devout listener, not what his competitors were doing wrong but what they were doing right.
Gold Nugget 8 – Exceed
Sam Walton states, “exceed your customers’ expectations. If you do, they’ll come back over and over. Give them what they want and a little more. Let them know you appreciate them. Make good on all your mistakes, and don’t make excuses, apologize. Stand behind everything you do. The two most important words I ever wrote were on that first Wal-Mart sign: “Satisfaction Guaranteed.” They’re still up there, and they have made all the difference.”
If you ever go to a Wal-Mart store you will notice that they have greeters and the greeters are genuinely nice people. In all honesty, they kind of lift my spirit a bit. But this all started when Sam created the 10-foot rule, that requires all associates when they come within 10-feet of a customer to look them in the eye and greet them.
Sam says, “there is only one boss. The customer. And he or she can fire everybody in the company from the chairman on down, simply by spending his or her money somewhere else.” Sam was the inventor of the cliche, “customers are always right.”
Gold Nugget 9 – Leverage and Control Your Expenses and Save
Sam Walton states, “control your expenses better than your competition. This is where you can always find the competitive advantage. For twenty-five years running long before Walmart was known as the nation’s largest retailer, we ranked number one in our industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.”
Sam Walton was known to drive an old red pick up truck well into his billionaire years.
Bud Walton (Sam ’s brother) writes, “People can’t understand why we’re still so conservative. They make a big deal about Sam being a billionaire and driving an old pickup truck or buying his clothes at Wal-Mart or refusing to fly first class…When a penny is lying out there on the street, how many people would go out there and pick it up? I’ll be I would. And I know Sam would.”
Sam indeed was probably as frugal as they come. But there is a characteristic in the mindset of the wealthy. It is not the luxury cars, huge houses, and fast lifestyles. According to the authors of the Millionaire Next Door, many wealthy people live life in frugality and do not look like anything that Hollywood wants you to believe.
In reality, it is because of this frugality that Sam and many wealthy become wealthy.
Gold Nugget 10 – Swim Upstream
Sam Walton states, “swim upstream. Go the other way. Ignore conventional wisdom. If everybody else is doing it one way, there’s a good chance you can find your niche by going in exactly the opposite direction. But be prepared for a lot of folks to wave you down and tell you, you’re headed the wrong way. I guess in all my years, what I heard more often than anything was: a town of less than 50,000 population cannot support a discount store for very long.”
Sam lays out his formula in chapter 8. He went against where everyone else was going and he credits this for his success. He wanted extremely discounted items and the wave caught on quickly.
Gold Nugget 11 – Hire Consultants
Sam Walton states, “something else happened in late 1976 which really helped us gear up for competition…Guys like Herb Fisher of Jamesway, and Herb Gillman of Ames, and Dale Worman of Fred Meyer all came down here and went through our stores to give us their opinion of how they thought we were doing. And, man, what they had to say really shocked us”
Any business owner or entrepreneur that doesn’t consider outside advice and expertise from others is greatly hindering their business growth and success. This is because our minds really fall in love with our own ideas and it hinders our thinking. This is the entire reason that the average CEO reads 50 books a year. There is value in constant learning.
I remember a while back that the CEO of Microsoft, Satya Nadella, considers himself a life-long learner. People who become CEOs of mega-corporations don’t just become the CEO because it is their turn. They bring value to the company and prove they deserve it.
Charlie Munger once wrote, “I never allow myself to have an opinion on anything that I don’t know the other side’s arguments better than they do.” We also learn from Proverbs 18:17 (ESV), “the one who states his case first seems right until the other comes and examines him.”
The point is clear. Always seek consultants and opinions of others to enhance your growth.
Gold Nugget 12 – Patience
Probably the most beneficial and encouraging of Sam Walton’s journey is his patience to pursue.
Sam found a big success in Newport over the course of five years. But the business turned sour after the landlord refused to renew the lease. Sam learned his lesson and always made sure to understand and read his lease agreements more carefully.
Sam Walton states, “it was the low point of my business life. I felt sick to my stomach. I couldn’t believe it was happening to me. It really was like a nightmare. I had built the best variety store in the whole region and worked hard in the community, done everything right, and now I was being kicked out of town. It didn’t seem fair. I blamed myself forever getting suckered into such an awful lease, and I was furious at the landlord.”
Sam patiently persevered continuing his drive in retail. He started again, almost twenty years later opened his first Wal-Mart. And the rest is history.
Conclusion
Sam Walton became the wealthiest man during his time not because of share luck, but because he bought immense value to the world. Practically everyone benefited from the discounted prices Wal-Mart stores has bought to us over the years with the exception of other merchants or Wal-Mart’s competitors.
Moreover, Sam is a genuine rags to riches story that took practically his entire life to reach the successes he did. Understanding the value and the character of the journey and life of Sam Walton we can bring value to our own businesses and personal lives.
Meet Maurice, a staff editor at Bigger Investing. He’s an accomplished entrepreneur who owns multiple successful websites and a thriving merch shop. When he’s not busy with work, Maurice indulges in his passion for kayaking, climbing, and his family. As a savvy investor, Maurice loves putting his money to work and seeking out new opportunities. With his expertise and passion for finance, he’s dedicated to helping readers achieve their financial goals through Bigger Investing.
