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Doug McMillon, CEO: Board Level Learning at Walmart

Doug McMillon is President and Chief Executive Officer of Walmart, a company that, if it were a country, would be the 25th largest economy in the world. Walmart serves 265 million customers weekly in 27 countries across more than 11,000 stores and online, and the company employs roughly 2.2 million associates worldwide, which would equate to the second largest army in the world (behind China) if it were tasked with defending that 25th largest economy.

75 percent of Walmart’s store management team began as hourly associates, and Doug McMillon is no exception. He started out in 1984 as a summer associate in the Walmart distribution center, and in 1990 while pursuing his MBA, he rejoined the company as an assistant manager before moving to merchandising as a buyer trainee. He worked his way up, and from 2005 to 2009 he served as president and CEO of Sam’s Club (owned and operated by Walmart) with sales of more than $46 billion annually during his tenure.

From February of 2009 to 2014, Doug served as president and CEO of Walmart International, a fast-growing segment of Walmart’s overall operations. He has served on the board of directors for Walmart since 2013 and became the Walmart CEO in 2014.

Doug, once you started out as a buyer trainee at Walmart – were there any particular approaches, techniques, or types of training that you received?

– Most of the learning that you had as a merchant – especially back then – came from the people around you, so it’s really learning on the job and principles coming out like – back then, we didn’t really sign contracts, and we had some vendor agreements to make sure we could pay people, but your handshake was your agreement. I remember that early on, one of my supervisors, a guy named Dave Deibel, emphasized to me that we were about to make a big commitment and the supplier had asked for something in writing. Dave said, “You need to explain to him that your word and your handshake is the contract,” and it worked.

– So you learn things like how you’re working on behalf of the customer, you should be tough but fair, you want suppliers to make money because you want them to be here in 10 years’ time, and we’re going to grow and we’ll need supply. In some circles, Walmart has this reputation of being really tough. I would say we’re tough on behalf of the customer, but we always try to be fair, and if you look at the financial results of our suppliers, they’ve done really well, and P&G still makes more money than Walmart does after all this time, so this has worked out well for everybody, but we do keep on the pressure on behalf of the customer. So you learn how to think on the job, but with some principles behind you.

The business we have today is different than it was a year ago, and certainly than it was five years ago, and it’s going to be different in another year’s time. So we are spending a lot of time trying to learn new things.

You seem to be a voracious reader, and I’ve noticed a number of books, like Team of Teams by General Stanley McChrystal among your personal social media posts.

Team of Teams has been huge. I’m still giving that one out. The truth is – my stack of books to read is more than knee-high. Right now, I’m behind. I’m trying to catch up. This morning, in our officer meeting, we were talking about learning and curiosity because retail is changing so fast, and the business we have today is different than it was a year ago, and certainly than it was five years ago, and it’s going to be different in another year’s time. So we are spending a lot of time trying to learn new things.

– So if you looked at my last month and the pie chart of time allocation, you’d be surprised how much of that time was learning about U.S. healthcare, becoming a digital company, and other things than how to be a brick-and-mortar retail store because we’re trying to figure out how to get this company positioned to be here in 50 years’ time. So in Team of Teams, Stan McChrystal talks about a few principles. One of them is shared consciousness. When he was in his role in the military, he took silos that had been around for a long time – Army, Marines, CIA, all of those historic silos – and figured out a way to get them to work together, to get on the same page and know the same things. Once you have shared consciousness – you know what I know and I know what you know – then you can pivot to empowered execution. Now that you know what I know, I expect you to act without seeking input. Go! Even today, in the officers’ meeting with a few hundred officers, we were talking about what our strategy is, giving people a chance to ask questions, and then saying to everybody, “Andy, go!”. This is on all of us, not just me, and you now know pretty much everything I know.” So those principles that you can glean from books and things like that are really helpful.

We’ll have 17,000 VR headsets deployed by the end of the year for things like that.

I did come across a mention of virtual reality in training associates. Is that currently underway or is that something planned, and can you describe that?

– Yes. So a few years ago our U.S. leadership team – Greg Foran, Judith McKenna, and others – took an idea that they’d seen us practice in the U.K. to put training academies in our stores, and now, around the United States, we have about 200 locations dotted around the map – 138 of them, actually – that are in the back rooms of stores. We’ve been able to reduce our inventory and create classrooms. They’re nice classrooms equipped with technology – mobile technology, large screens, really well done – and you’re getting trained on interesting things, not just how to execute a retail store, but also some soft skills like how to have a difficult discussion using VR.

– So if you are a supervisor or leader at Walmart, you probably weren’t trained to coach someone for improvement. You might shy away from conflict, for example. So these VR headsets have an avatar, and if you put one on right now you would have a conversation, and at the end of the conversation, when you take the headset off, it would score you and tell you how you did in that conversation. Watching the avatar’s facial expressions and the words that come back – so we’re trying to help people grow for the jobs we have, and as automation happens and some of them go on to other jobs, it helps them prepare for more than that.

– But, we also teach people how to do routine tasks. So Ivanka Trump is interested in workforce training, and she heard about the programs we’re doing and wanted to come to a store, so I met her in Mesquite, Texas about a month ago, and we put VR goggles on her, and she stocked our vegetable wall – what we call the wet wall, that’s got leafy greens on it and stuff like that. She scored a 12 out of 20, so we’ve got a little work to do there. But you can use VR in ways that get you off the sales floor, let you have an opportunity to really learn when you’re not interrupted by customers, and we’ll have 17,000 VR headsets deployed by the end of the year for things like that.

Can you describe the “fire break” technique you use personally?

– Every once in a while, it’s just too much, and you have to go back and say, “I know what I was supposed to do on Tuesday, but clear it because I need some time to get back up on my feet and read a few things.” So we will call an audible and put a “fire break” in every once in a while.

And, when you do those fire breaks – and, let’s just say you have blocked out three to four hours to think – how often do you do that by yourself versus with other people?

– It’s by myself – I need that time by myself, but I run into things that I don’t know, so I’ll run out and interrupt people, place a phone call, and say, “I’m working on this problem. What do you think?” And then, I’m trying to put the phone back down, run to my office, and work on the next turn of the crank on the problem.

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