September 23, 2005

Q&A With Lee Scott

Businessweek's been talking to H. Lee Scott: Part 1 and part 2.

Overall, the language used by Mr. Scott does not jive with that of Wal-Mart's labor union opponents. Where Mr. Scott thinks he's reaching out to environmental and international activists, domestic opponents will think he's just spinning. The most telling part of the interview is where he refuses to answer:

I can learn from those people and learn where it is Wal-Mart can change to be a better company, more likely to be embraced or at least tolerated.

That isn't the agenda of the unions?
[Silence. No answer.]

Another good portion:
When growth was easier this idea of critics being ignored was O.K., because you were getting all this positive feedback from the numbers. As the share price slows [and] the critics are attacking, you have to get to this point.

Maybe not all of our critics wish us harm. Maybe some would like us to be a better company and do things differently. So you start reaching out...trying to understand what is it about us that causes them to have this concern. How much of it is legitimate? How much of it is misinformation? What is it that we need to change? What is it we can't [change] that we will hopefully be able to communicate?

As the share price stagnates, he means?

I think Mr. Scott fails to convey what he really means, so let me rewrite his words:

Unions want a big say in how we run our business, mostly by lowering the returns to our shareholders. However, the other groups do not want to control our operations or redirect our profits; they may demonize us at first, but they can be persuaded to pipe down by particular, well-defined changes that support their goals and those of Wal-Mart shareholders. And, frankly, we are willing to work with them because their voices impact the views of the consumers we want in our stores, while there's little use in dealing with somebody who vows never to shop at your stores.

What I think many people should realize is that Wal-Mart is not terribly exceptional in any respect other than its productivity and success. Most other businesses face the same difficulties, at a scale proportional to their operations. Mr. Scott quoted a visiting CEO:

"There isn't anything you are faced with, from a class-action lawsuit to the rest of the stuff, that we are not dealing with in our company. The only difference is that yours is played out on the front page of the paper and you never read about ours."

Posted by Kevin on September, 23 2005 at 10:20 AM