Fortune has a 4,500-word piece about Walmart CEO Mike Duke, who it characterizes as a highly disciplined and detail-oriented “doer,” a guy who uses Post-It and file folders to make sure he follows up on issues with his direct reports, and someone who is able to see the big picture as well as get caught up in the price of bananas in the company’s China stores.
Duke’s predecessor, Lee Scott, describes him this way:
“Mike is not only a good leader but a really good manager. There's so much said today about leadership. But I don't think in business you can forget the fact that you don't just have to lead, you have to manage ... Yeah, he's a better manager than I am. I think it's his ability to deal with data, his ability to set a schedule and follow that schedule, and to get all of the things done that he needs to get done. Mike is disciplined, and I think that causes him to be able to accomplish a great deal -- how he manages his time, how he manages his people, and the effectiveness of the time he spends with people.”
Some other excerpts:
• “He is so low-key and friendly that you might mistake him for the company's human resources chief -- as opposed to one of the world's most powerful businessmen. Still, to those who know and work with him, he's a demanding boss and a tough negotiator. He's constantly coaching everyone around him. He trusts but always verifies. And he typically has a smile on his face, even when he's doling out blunt feedback.”
• “He also possesses a strong sense of business curiosity -- and it often leads to marketplace epiphanies. Consider the story of the Chinese bananas. Last fall Duke and Doug McMillon, the new 43-year-old head of Wal-Mart's international division and an oft mentioned candidate to be Duke's successor, flew to China to check in on the company's fast-growing business there. While scouting competitors, Duke became preoccupied with the price of bananas.
“All the local stores they visited, he noticed, sold both domestic and imported versions of the fruit -- and they didn't appear much different in quality. But the homegrown kind cost about 20% less, on average, than the foreign fruit. Then Duke and McMillon walked into Wal-Mart's Wanda supercenter in Beijing. Duke went straight to the produce section and found that while Wal-Mart had a better price on imported bananas, it didn't have cheaper domestic bananas in stock at all. The CEO pointed out to McMillon and the local executives that Wal-Mart was ceding the entry-level portion of the banana market -- not exactly the formula that a little discount chain from northwestern Arkansas used to become the world's biggest retailer.
At that point Duke's team reacted with the kind of speed and efficiency that would make Sam Walton smile. Within 24 hours, the Wanda supercenter had local bananas in stock at a market-beating price. In less than a week, all 49 stores in Wal-Mart China's North Region had them, followed quickly by the rest of its nearly 300 stores across the country. But for Duke the issue was not about the price of fruit alone. ‘It turned into a great conversation about opening price-point items: 10-packs of chopsticks, soccer balls, basketballs,’ says McMillon. ‘We started looking around the store differently because of his attention to detail’.”
In many ways, Fortune suggests, Duke is exactly the right person to fix the problems created by the company’s Project Impact initiative, which among other things was designed to reduce item count, clean up price-driven “Action Alleys,” and make the stores more attractive to middle class shoppers - all of which managed to reduce the stores’ traffic counts and same store sales. Duke is said to be relentless about fixing the damage, and he has shaken up Walmart’s executive suite as a result.
The story sums up Duke’s ultimate challenge this way: “To meet Wall Street's modest expectations over the next five years, the company must increase its profits by a mind-boggling $3.68 billion. To use the Fortune 500 comparison again, that's greater than 463 of the companies on this year's list. Sales, meanwhile, are expected to top half a trillion dollars. That means a lot of expansion overseas in markets like China, India, and Brazil, and a virtual army of new-store managers and other executives. ‘In the old days when the company was smaller, everyone could take their lead from Sam Walton,’ says Duke. ‘Today we need hundreds of Sam Waltons, many of them in China, Brazil, and other countries around the world’.”
Duke’s predecessor, Lee Scott, describes him this way:
“Mike is not only a good leader but a really good manager. There's so much said today about leadership. But I don't think in business you can forget the fact that you don't just have to lead, you have to manage ... Yeah, he's a better manager than I am. I think it's his ability to deal with data, his ability to set a schedule and follow that schedule, and to get all of the things done that he needs to get done. Mike is disciplined, and I think that causes him to be able to accomplish a great deal -- how he manages his time, how he manages his people, and the effectiveness of the time he spends with people.”
Some other excerpts:
• “He is so low-key and friendly that you might mistake him for the company's human resources chief -- as opposed to one of the world's most powerful businessmen. Still, to those who know and work with him, he's a demanding boss and a tough negotiator. He's constantly coaching everyone around him. He trusts but always verifies. And he typically has a smile on his face, even when he's doling out blunt feedback.”
• “He also possesses a strong sense of business curiosity -- and it often leads to marketplace epiphanies. Consider the story of the Chinese bananas. Last fall Duke and Doug McMillon, the new 43-year-old head of Wal-Mart's international division and an oft mentioned candidate to be Duke's successor, flew to China to check in on the company's fast-growing business there. While scouting competitors, Duke became preoccupied with the price of bananas.
“All the local stores they visited, he noticed, sold both domestic and imported versions of the fruit -- and they didn't appear much different in quality. But the homegrown kind cost about 20% less, on average, than the foreign fruit. Then Duke and McMillon walked into Wal-Mart's Wanda supercenter in Beijing. Duke went straight to the produce section and found that while Wal-Mart had a better price on imported bananas, it didn't have cheaper domestic bananas in stock at all. The CEO pointed out to McMillon and the local executives that Wal-Mart was ceding the entry-level portion of the banana market -- not exactly the formula that a little discount chain from northwestern Arkansas used to become the world's biggest retailer.
At that point Duke's team reacted with the kind of speed and efficiency that would make Sam Walton smile. Within 24 hours, the Wanda supercenter had local bananas in stock at a market-beating price. In less than a week, all 49 stores in Wal-Mart China's North Region had them, followed quickly by the rest of its nearly 300 stores across the country. But for Duke the issue was not about the price of fruit alone. ‘It turned into a great conversation about opening price-point items: 10-packs of chopsticks, soccer balls, basketballs,’ says McMillon. ‘We started looking around the store differently because of his attention to detail’.”
In many ways, Fortune suggests, Duke is exactly the right person to fix the problems created by the company’s Project Impact initiative, which among other things was designed to reduce item count, clean up price-driven “Action Alleys,” and make the stores more attractive to middle class shoppers - all of which managed to reduce the stores’ traffic counts and same store sales. Duke is said to be relentless about fixing the damage, and he has shaken up Walmart’s executive suite as a result.
The story sums up Duke’s ultimate challenge this way: “To meet Wall Street's modest expectations over the next five years, the company must increase its profits by a mind-boggling $3.68 billion. To use the Fortune 500 comparison again, that's greater than 463 of the companies on this year's list. Sales, meanwhile, are expected to top half a trillion dollars. That means a lot of expansion overseas in markets like China, India, and Brazil, and a virtual army of new-store managers and other executives. ‘In the old days when the company was smaller, everyone could take their lead from Sam Walton,’ says Duke. ‘Today we need hundreds of Sam Waltons, many of them in China, Brazil, and other countries around the world’.”
- KC's View:
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Fascinating story, and worth reading the whole thing. It is interesting to read that Duke doesn’t seem to have a high tolerance for missteps, and is willing to make hard choices and fast moves when things clearly have gone wrong...which sort of matches up with the kind of friendly-yet-steely demeanor that he had when I interviewed him a few years ago. He’s a guy who is relentless about staying on message...which is critical for a company where brand equity is tied so closely to the low-price message.
