Start With Why

from Sol Price, the founder of Fed-Mart, a retail discounter founded in Southern California during the 1950s.
    Wal-Mart was not the only retail establishment capable of offering low prices either. Price, as we’ve already established, is a highly effective manipulation. But it alone does not inspire people to root for you and give you the undying loyalty needed to create a tipping point to grow to massive proportions. Being cheap does not inspire employees to give their blood, sweat and tears. Wal-Mart did not have a lock on cheap prices and cheap prices are not what made it so beloved and ultimately so successful.
    For Sam Walton, there was something else, a deeper purpose, cause or belief that drove him. More than anything else, Walton believed in people. He believed that if he looked after people, people would look after him. The more Wal-Mart could give to employees, customers and the community, the more that employees, customers and the community would give back to Wal-Mart. “We’re all working together; that’s the secret,” said Walton.
    This was a much bigger concept than simply “passing on the savings.” To Walton, the inspiration came not simply from customer service but from service itself. Wal-Mart was WHAT Walton built to serve his fellow human beings. To serve the community, to serve employees and to serve customers. Service was a higher cause.
    The problem was that his cause was not clearly handed down after he died. In the post-Sam era, Wal-Mart slowly started to confuse WHY it existed—to serve people—with HOW it did business—to offer low prices. They traded the inspiring cause of serving people for a manipulation. They forgot Walton’s WHY and their driving motivation became all about “cheap.” In stark contrast to the founding cause that Wal-Mart originally embodied, efficiency and margins became the name of the game. “A computer can tell you down to the dime what you’ve sold, but it can never tell you how much you could have sold,” said Walton. There is always a price to pay for the money you make, and given Wal-Mart’s sheer size, that cost wasn’t paid in dollars and cents alone. In Wal-Mart’s case, forgetting their founder’s WHY has come at a very high human cost. Ironic, considering the company’s founding cause.
    The company once renowned for how it treated employees and customers has been scandal-ridden for nearly a decade. Nearly every scandal has centered on how poorly they treat their customers and their employees. As of December 2008, Wal-Mart faced seventy-three class-action lawsuits related to wage violations and has already paid hundreds of millions of dollars in past judgments and settlements. A company that believed in the symbiotic relationship between corporation and community managed to drive a wedge between themselves and so many of the communities in which they operate. There was a time when legislators would help pass laws to allow Wal-Mart into new communities; now lawmakers rally to keep them out. Fights to block Wal-Mart from opening new stores have erupted across the country. In New York, for example, city representatives in Brooklyn joined forces with labor unions to block the store because of Wal-Mart’s reputation for unfair labor practices.
    In one of the more ironic violations of Walton’s founding beliefs, Wal-Mart has been unable to laugh at itself or learn from its scandals. “Celebrate your successes,” said Walton. “Find some humor in your failures. Don’t take yourself so seriously. Loosen up and everybody around you will loosen up.” Instead of admitting that things aren’t what they used to be, Wal-Mart has done the opposite.
    The way Wal-Mart thinks, acts and communicates since the passing of their inspired leader is not a result of their competitors outsmarting them either. Kmart filed for Chapter 11 bankruptcy protection in 2002, and then merged with Sears three years later. With about $400 billion in annual sales, Wal-Mart still sells more than six times as much as Target each year. In fact, looking beyond discount retailing, Wal-Mart is now the largest supermarket in the world and sells more DVDs, bicycles and toys than any other company in America. Outside competition is not what’s hurting the company. The greatest challenge Wal-Mart has faced over the years comes from one place: itself.
    For Wal-Mart, WHAT they do and HOW they are doing it hasn’t changed. And it has nothing to do with Wal-Mart being a