The Tale of Two Businesses: The Habits of Engaged Organizations in Action

Recently, I introduced “The Habits of Engaged Organizations” (here’s that blog in case you missed it) and since then I’ve had a lot of good feedback and a few really good questions. One of those questions asked if I could give an example of an engaged organization. I am happy to do it. This example is one I use in talks and workshops all the time to underscore not only the importance of culture, but how successful, engaged organizations utilize the engagement principles.

The Tale two businesses: Walmart and Kmart. I argue that these are sister businesses, in as much as they sell the same things to consumers and draw the same types of customers: most of us.  Walmart began in 1950 when businessman Sam Walton purchased a store and opened Walton’s 5&10. Kmart was incorporated in 1899 as S. S. Kresge Company and renamed to Kmart Corporation in 1977.

Today,  Walmart is a global empire and Kmart continues to struggle through corporate takeovers, reorganizations and bankruptcies. The question is: why? Considering that Kmart was around long before Walmart, why then did Walmart surpass most, if not all of its competition? (I do recognize that not everyone is a fan of Walmart’s business practices, however, I use the example for illustrative purposes only.)

Walmart united in a common purpose from the day its doors opened: Treat customers well and provide them the best value at the lowest price in an environment that is welcoming and inviting. And, everyone working at Walmart knew that purpose from the start. Kmart, on the other hand, apparently just incorporated an old paradigm with a new name in 1977. Whether or not anyone who worked within the Kmart organization understood a common purpose is unknown to me, but from outward appearances, my answer is no.

Sam Walton was a relentless and detail-oriented owner. His vision (before he died) was 100 Walmart stores that he would personally oversee. It was not uncommon to see Sam in his private plane, flying from Walmart to Walmart, checking on every aspect of the business. He did not cut corners. When problems arose, the company collectively, collaboratively and methodically set about finding resolutions. In other words, Walmart banished a “quick-fix” mentality.

The agility evident in Walmart is extremely obvious. They change and adapt to their customer base. When Amazon began direct shipping from internet purchasing, Walmart had already implemented that system. When customers asked for food items, Walmart launched grocery sections. Managers and employees both have input into how and what the company does to reach its market. Kmart? Well, it pretty much looks the same as it did in 1977 with not much has changing in their stores.

Walmart was bullish on communication and detail. Employees were trained in the ”Walmart Way” – sales training that included the “Walmart Cheer” and the “Walton Ten-Foot Rule”. The common purpose of the company created a clear expectation: Be friendly and be the best. I can’t say what Kmart’s thinking is on this, but when I asked a Kmart employee at random if they have an extensive training program or if they knew the corporate cheer, they laughed.

Successful companies, like Walmart, understand clearly that the focus of the company is on its system and processes and not on results. Create a powerfully good system and the results take care of themselves. They nurture excellence rather than results.

Accomplishments in the Walmart corporation are constantly acknowledged and rewarded. While it is true that Walmart grew large very quickly and as a result suffered a bit in employee relations, it remains committed to resolving those issues and ensuring it recognizes the accomplishments of its employees. Even if Walmart isn’t one of your favorites, consider Google, Apple or Facebook…they all do the same things.