If you’re an entrepreneur, you likely have a role model you carry around in your head as you go about building your business. Maybe it’s Elon Musk, Mark Zuckerberg, Jeff Bezos or everybody’s seeming favorite, Steve Jobs. Here’s a better suggestion: Sam Walton. Unsexy, to be sure, and not terribly contemporary. But as arguably the most successful entrepreneur of all time, he has more to teach about the basics of entrepreneurship than many of the more dashing entrepreneurs who’ve come after him.
I was recently privileged to reflect on those lessons first-hand when I was granted extraordinary access to the archives of the Walmart Museum in Bentonville, Arkansas, while researching a book on entrepreneurship. A diligent team of archivists there, supported by the Walton family and many of Sam’s closest associates, has amassed a warehouse full of Sam’s notes, reports, artifacts and memorabilia.
I reviewed more than 200 documents, several photo collections and almost 100 oral histories. I looked over the archivists’ shoulders as they dug through boxes of Sam’s weekly reports, memos and handwritten notes. I held in my hands his ledger pads filled with sales, cost and inventory numbers organized by store and transcribed by Sam from phone calls or other sources. I had access to materials dating from the time he bought a bankrupt Ben Franklin franchise in 1945 through his launch of the Wal-Mart brand 17 years later and up until he died in 1992.
Here, distilled from that vast treasure trove, are five timeless lessons from Sam that apply to entrepreneurial businesses from startup to IPO and beyond:
Always make your customers happier and happier with your product or service.
Not happy, happier. It’s the fundamental principle of entrepreneurship that Sam understood better than anyone. Week after week for 45 years Sam pursued a program of small improvements on a weekly cadence, meeting every Saturday with his managers to share ideas and design small experiments to be tried the following Monday.
Have you established a cadence for making improvements that you pass along to your customers? Are you improving at least as fast as your competitors?
Collect all the good ideas you can and adopt the best ones.
Sam didn’t care where good ideas came from; he never claimed to be the smartest person in the room or tried to be the most dominant. He copied the competition; he listened to his store managers; he welcomed the advice of his brother, his wife and his in-laws.
Do you systematically look near and far for ideas you can borrow? How and where—at conferences, from consultants or professors, new employees, through open-ended brainstorming sessions that we now call hackathons? How well do you know your competitors? If you were Sam, you’d know most of them personally.
Let your people know they matter.
Sam heaped praise and reward on hardworking contributors to the success of the business, and he genuinely wanted them to feel recognized for what they did. In the early days, he routinely gave a small percentage of each store to the manager he had recruited to run it. When the company went public as Wal-Mart, he worked on a hand-written spreadsheet for three days to make sure he fairly translated the value of each manager’s partial ownership of their store into Wal-Mart shares.
How do you let the people on your team know they are held in high esteem?
Keep it simple.
That way, everyone understands what they need to do. Sam focused on whether his stores sold more than last year, at a lower cost and with less inventory. Period. Focusing on a few simple metrics is more likely to keep the business on a successful course than the tendency in today’s complicated world to measure everything.
Does everyone on your team know what simple targets the business is trying to achieve and how they can help achieve them?
Never stop experimenting.
Many people think of Sam as something of a skinflint whose frugality was one of the keys to his success. In fact, Sam was intent on trying out new ideas and he was willing to accept losses on things that didn’t work out. He was also an early adopter of new technologies, making sizeable investments in them at every stage of the company’s growth. A penny-pincher would have missed out on most of the opportunities that Sam was able to seize. For instance he invested in the physical infrastructure to operate a high-velocity distribution center when the concept was new to retail—but he did so only after visiting an actual facility in operation.
A commitment to experimentation doesn’t mean simply throwing everything against the wall and seeing what sticks. Unless you’re Google or Facebook, sitting on a mountain of cash, that’s a sure way to destroy your company. Instead, adopt a disciplined approach. How well do you understand the most advanced techniques your industry has adopted? How are you experimenting with them and assessing their impact on your business?
Happiness. Ideas. People. Simplicity. Experimentation. Adopting these five simple principles may not make you the greatest entrepreneur of all time, but they are more likely to keep you going in the right direction than flashier formulas for success.