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Jul30
The Common Sense Management of Sam Walton - 118

Running lean can make you mean.


Whether we have a lot of cash on hand or not, we need to be a company or department that runs lean. Besides the obvious benefit of being responsible with spending, there's a far greater benefit related to ideas and innovation.

If there's one thing that having a lot of money can do to a company, it is to tempt people to be too laid back and satisfied. Any of us that remember when we had to struggle for every cent in a business, know how we would struggle and push to drive ideas in our people and ourselves to make the business a success.

Being lean is far more than being responsible with handling money, it's a way of thinking, the culture of a business and how you lead.

As Steve Jobs said once: "Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're led, and how much you get it."

Sam%20Walton%20%20and%20running%20a%20business%20lean.jpg

This story is the same across business after business. With Sam Walton and Wal-Mart (WMT) it was forced on them. In their early days competitors like Korvette and K-Mart had the advantage of buying from wholesalers who then would come in and check the shelves, write the order and then stock the selves. Walton couldn't do that with Wal-Mart because there were no wholesalers available. Instead, they were forced to buy direct from manufacturers. They had to be lean and self-sufficient from the beginning.

Of course it has proven to be a huge success with their motto being the "lowest prices all the time." Another of the strategies that make them who they are, and the success they are.

It's all connected to an absolute commitment to running as lean as they can. Walton was famous for squeezing everything down to the last penny.  What was brilliant was he still passed on the savings to customers, not try to increase margins. He continued to rely on turning over merchandise to be the way to generate profits.

Running lean causes a company, its workers and leaders to get together and come up with solutions to solve problems regardless of how much money they had.

What makes this work great is understanding where we need to be lean and where we need to spend. Lean is in reality a innovation and creativity motivator. Walton and Wal-Mart do this better than anybody.

Other Walton Sources:

The Wisdom Of...Sam Walton

Sam Walton Articles

The Most Underrated CEO Ever The legendary Sam Walton

Sam Walton: The Power of Persistence

The Anti–Wal-Mart Jihad

Made in America: My Story

Sam Walton Business Quotes for Ya

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