business news in context, analysis with attitude

We keep getting email about the Walmart Mexico bribery scandal.

One MNB user wrote:

In Walmart’s defense—there has never been this large of a company with as many employees.  There are going to be some questionable things done by employees.  We are all under pressure to get our jobs done a drive results.  Sometimes we do stupid things we can’t seem to manage or turn around once started.  What starts off as a small fire, (couple small bribes here and there) quickly grows into an all out inferno (which is where it’s at now).

Except that if the original New York Times story is correct, this wasn’t a matter of a few employees going rogue. Rather, it was systematic and systemic ... and covered up by the people at the highest levels of the company.

From another reader:

What a good time for Shelly Broader to be in Canada, away from the turmoil at Walmart US. Let's hope they realize the treasure they have there and bring her back to the US in a higher leadership role.

Regarding the Don Soderquist connection to Walmart, on e MNB user wrote:

It will be interesting to see how Don Soderquist responds to Mike Duke's transgressions.  Don co-founded the Northwest Arkansas Mega Church- Peoples Fellowship.  It was on Don's watch Mike's star rose at Walmart and Mike was elevated to a senior member of Don's Peoples Fellowship Church.  Don likes his WMT stock to go up in value and preaching the moral high ground to the worker bees in Bentonville is just one of Don's tools to help that happen. 

Another tool is to find others, like Mike Duke, to follow his footsteps. Its no secret in Bentonville a smart career path includes joining Peoples Fellowship Church.  That includes one’s wife attending the week day Bible studies held by the wives of Walmart executives in their homes.

I am not passing judgement on what makes a good Christian.  I am just describing what goes on and how it appears to those of us standing on the sidelines.

Responding to our story suggesting that some folks think that Walmart probably will get off with a fine in this case, one MNB user wrote:

I must say, isn't coming to a big settlement with our government avoiding prosecution, similar to a bribe?

MNB user Andy Casey wrote:

 We need to return to the ethics - both corporately and personally - which understands that not getting caught just isn't the same as being good.  To paraphrase a line from Jurassic Park, we need to quit thinking so much about whether we can do something and spend more time on whether we should.

Responding to my piece last week about executives who are responding to e-challenges with some level of reluctance, MNB user Jarrett Paschel wrote:

To the extent that retailers are only "reluctantly" dealing with the digital/e-commerce thing, that is indeed a very big problem. As you quite correctly point out, a forced hug is never as good as a real one...And I would argue it is worse than no hug at all.

Which raises a larger point that rarely gets addressed in these dialogues. If you believe there is a need for digital or e-commerce in certain very specific contexts, occasions or categories, then do it and do it very well. Conversely, depending upon your model of retailing, there may not be so much of a need to focus on these issues. Some of the best grocery stores in America here in Seattle--Metropolitan Market and Central Market--haven't had much of a need for digital or e commerce solutions. Those things aren't as important as keeping a razor sharp focus on super high quality products, experiences and food related activities. But when they have dabbled in the digital world, they've nailed it with nothing more than a simple, but very effective website. In their case they've used the website to highlight all of the specialty products and food related activities that make their stores so distinctive. And that's where most of their dabbling in this arena stops--so they can get back to what it is they do best. The lesson is to 1) identify where these technologies and tactics make a logical fit--which may not be that often or ever present 2) Dive in and execute well with precision and clarity and 3) stay focused on the bigger picture. Just like their models have always demonstrated, a few high-quality things are better than across-the-board mediocrity.

MNB user John Miller wrote:

The comments regarding leaders knowing they need to go along with the digital world and utilize social networking vs. taking the reins from others and leading/steering direction reminded me of an experience I had with one of our large customers.  I took over a large account a few years ago and this customer was all about change.  Change came at a rapid pace compared to most others.  Not surprisingly this customer was a leader in their area and was taking market share at a rather rapid pace.  Our results with that customer were less than stellar.  When I held my first discussions with each of our leaders there was one theme in common – If the customer would just stop changing and get out of our way we could provide the service they are asking for.  My thoughts were that we should be careful of what we wish for.  The next change may be to replace us with someone else as it is the customer determines the playing field.

To make what is already a long story short, I began discussions regarding how we get ahead of the changes.  How we can look for signals of what may come next and get out in front of it and help forge the path spending more time in the space of proactively leading vs. begrudgingly complying.  The results were nothing short of amazing.  Not only did the customer notice and begin involving us in some of their initial planning meetings but the morale of our teams working this account became much more positive.  Also, the financial results for the account followed the same path.  Those at FMI 2012 need to learn this lesson again.  (I am sure they learned it before with some other change).  Being the leader is fun, exciting, energizing, and creates a very dynamic workplace. 

MNB reported last week about how Supervalu that Pete Van Helden, executive vice president of retail operations, will be leaving the company this spring, to be succeeded by Kevin Holt, described as “a former Meijer, Inc., executive who has significant experience leading teams in similar turnaround environments.”

I commented:

This could be a case of CEO Craig Herkert continuing to clear the decks and install his own people as he tries to remold Supervalu to his own vision. Maybe van Helden simply did not fit the mold.

It could be a case of Herkert trying to buy time. People one step down from the CEO’s office often are most vulnerable when a company and a CEO are in trouble ... by firing them, they can create the illusion of change when what’s really happening is the big stall. (This could be even more important now that Herkert has been implicated in the Walmart Mexico bribery scandal - since he got the Supervalu job at least in part because of his work for Walmart in Mexico.)

Or, it could be a case of simply getting rid of executives with Albertsons pedigrees. Over the years, one of the consistent complaints I’ve heard is that in the wake of Supervalu’s acquisition of many Albertsons stores, it was the Albertsons people who ended up in control of the company. So maybe Herkert is trying to rectify that problem. could be some combination of all three.

Regardless, one has to wonder if Herkert is simply rearranging the deck chairs on the Titanic.

One MNB user wrote (apparently hating the Titanic cliche):

So, now "I have a bone to pick," because your article on Supervalu stirred up "the bees in my bonnet," "ruffled my feathers," and angered my idioms with the reference to Albertsons executives.  Hmmmmm ... I must be getting more sensitive in my older age, however, I will speak up and ask you to make sure you are delineating between "original" Albertsons folks (I call 'em classics) and the group that are not (I am sure you have the time for that).

I would venture that if Supervalu (remember American Stores? did anyone learn from that?) had let the original Albertsons folks run the stores and the company (with the exception of the faux Albertsons CEO who pulled the trigger on the appliance) there may have been a different result. As it is, will the path that SV is on lead them to bankruptcy?  Maybe that would be a good thing.  So, as I try to take the "burr out of my 'basement'" and "avoid being driven up the wall" by my self provoked irritation a  "real" Albertsons original would not have ever allowed the ego trip that they went on when they bought the failing American Stores debacle back in 1998-9. "Make no bones about it," I imagine Joe Albertson would have never have been a fan of this.  In addition the "real" original Albertsons folks would have never hired a certain someone from the major appliance division to run their stores.  Look at their history, it never happened before. They were one of the most successful chains because they grew conservatively and, for the most part, hired from within and attracted good loyal steady smart people. This scenario never happened because that "expert" with a resume of refrigerators and toasters put the company in a position where they had to sell out or go bankrupt themselves.  I would be "fit to be tied." 

Well, I must have a "stick in my craw" now (note to self  - google "craw"). Go back to the American Store deal.  Albertsons purchased American Stores??  This was not how it went down in the go-forward reality of operations. These misfits (I am talking the corporate folks here, please) are the ones who made Lucky stores "fouled up beyond repair" after buying them because they did not know how to run Alpha-Beta.  Albertsons should have purged all of the American Stores execs who created the fiasco, and then they should have fired themselves for purchasing this "Titanic" of a grocery chain.

Now coming back to present, here you go Supervalu, someone put some "lipstick on the pig" and then said, here buy this company that "glitters but is all pyrite?"   Well now you have a pig or a piece of "fools gold" for that matter.....  I guess I should get "off of my high horse" so I can "get my knickers untwisted," because this is all "water under the bridge....."   Just make sure you don't lump the "classic" Albertsons person in with the hybrids from the American Stores fiascos.  Look around the industry, many of these folks are doing great things and are very dedicated, tenacious and loyal. Sorry to "jump down anyones' throat," but I was a "little hot under the collar."

And from another reader:

The thing is, Herkert spent many years at Albertsons prior to Wal-Mart.  It seemed to me he was culling the SV higher-ups from the herd to make the place more like Albertsons.  Now the pendulum seems to be swinging the other way.  Is he firing them (whether they be legacy SV or Albs) or are they opting to leave?  The wording on the announcements is predictably vague…to pursue other interests, mutually beneficial, etc.

I’ll keep showing up as long as my key works or I get a phone call telling me not to bother.  I’m certainly not feeling as though my input is wanted/needed, so whaddya gonna do?  During the last quarterly meeting his demeanor seemed oddly different. He looked tired and wasn’t as animated or confident as he seemed before (my opinion).  I think he’s getting a lot of static with the stock price tanking, among other things and it’s starting to take a toll.  Still hanging on to my deck chair.

So I’m wondering if there’s a way for me to make money writing a column for cynics and work from home. Cynicism seems to be a growing trend and hey I consider myself a leader in that area...

Finally, thanks to all of you who sent your congratulations for my coming gig at Portland State University. As I said on friday, it’s only for July, but I’m excited about it ... and hoping that the experience will lead to a longer-term Pacific Northwest move once Mrs. Content Guy retires.
KC's View: