"Had we been capitalized we would never have tried the small-town America stores."
One of the more amazing contradictions in doing business is the problem of having too much money at the beginning of a venture.
Some research says that one of the major reasons for the failure of business startups is the lack of capital. I would challenge that. Capital can cover a multitude of business sins, but it can't cover the lack of experimentation and innovation that is the "real" capital new businesses - as well as all businesses.
I've said it here before that the greatest challenge in the majority of companies is when they actually start to have some extra cash-on-hand. It is there that the real future and success of a company is determined. It's the discipline at that time that is the determining factor. That's the point that Sam Walton is making here.
If you have a lot of capital, it can be a hindrance to finding out better, leaner ways of doing things. There probably wouldn't have been a Wal-Mart (WMT) if Walton had had too much capital. They wouldn't have even thought about the small-town strategy (although his wife had a hand in that too).
Even if we have extra capital, we shouldn't look for that to be the answer to making our businesses a great one. Ideas, along with a clear vision of what it is you are in your purpose and core values is the real determining factors in business success.
That's why so many huge companies that are flush with cash still can't seem to go forward in meaningful way or come up with new initiatives that make a difference. It's something that simply can't be bought. Walton understood that the lean years are the years where the real competitive advantage of a company is built, as it's forced to come up with ways to do business without simply buying their way out of it and not solving the real problems.
Other Walton Sources:
The Most Underrated CEO Ever The legendary Sam Walton
Sam Walton: The Power of Persistence
Sam Walton Business Quotes for Ya
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» Herb Kelleher: The Method Behind His Madness - 67 from ManagersRealm
"Always Operate in Survival Mode"While it wasn't intentional, it is interesting that in the last post concerning The Common Sense Management of Sam Walton, he talked about the fact that not having much money at the beginning of the busine... [Read More]
Tracked on: April 19, 2007 11:28 PM | Permalink to Trackback