When Sam Walton opened his first Wal-Mart inRogers, Ark, in 1962, he challenged a common beliefheld by most retailers at the time, namely, the moreyou charge, the greater your profit. Walton, however,decided he could make more by charging less,making up the difference in volume. Walton wasproved right; his Wal-Mart chain of stores is now theworld's top company in total annual revenues ($245billion in 2002).
The service economy embraces a wide array ofbusinesses—from retailers (eg, Wal-Mart) to professionals(eg, physicians). So in many ways, doctors canlearn a lesson from Walton: Give customers (ie,patients) what they want, efficiently.
Walton was born in Kingfisher, Okla, in 1918,where his father worked for a mortgage subsidiary ofa large insurance company. During the Great Depression,he traveled with his dad from farm to farmto foreclose on the properties. Walton attributes hisdrive to succeed to this experience.
As a high school and college athlete, Waltonnever played in a losing football game. He came toexpect to win. He felt a positive attitude was neededto achieve great things. "Thinking like that oftenseems to turn into sort of a self-fulfilling prophecy,"Walton once noted.
What was Walton's formula for success? Headhered to a number of tried-and-true principles. Firstand foremost, he remained focused on his goals. Atthe start of his business in 1962, he had 1 goal: tooffer the lowest prices. He never worried that Wal-Mart might not have the largest selection or the mostglamorous brand names. Further proof of his resolveto cut costs: When he noticed that trucks shippingchickens from Arkansas farms to New York returnedempty, he arranged to have them cleaned out to carryWal-Mart merchandise back to Arkansas. Thus, thecompany's shipping costs were lowered considerably.
Walton also believed in keeping an eye on thecompetition, including the smaller retail businesses.He enjoyed gleaning any information he could fromretailers, to learn about things a store was doingright or wrong. Frequently, he would find 1 or 2 goodideas that he could incorporate into his own business.
Wal-Mart was one of the first large companies tooffer profit sharing even to its lowest-paid workers.Walton realized that profit sharing gave employees astake in the company's success and encouraged teamworkamong employees.
Walton wasn't afraid to admit that he didn't knoweverything or that he needed help. Despite the factthat he was uncomfortable using computers, he recognizedhow important they were becoming to thesuccess of a business. Wal-Mart installed a computerizedinventory-management system in the early1980s, effectively outpacing its rival, K-Mart. Evenmore than 10 years after his death, Walton remains amodel for business success.