Sam Walton's Top Ten Business Tips
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In life, you’ve got to learn from the best, and in the world of business you’d be hard pressed to find anyone with as much success as Sam Walton.
At the time of his death, he was the richest person alive, having created Walmart and Sam’s Club.
His companies today employ more than 2 million people. His family has a combined fortune of 150 billion dollars. If that were all held by one man - he’d be by far the richest person alive.
Despite his power and influence, Brazilian policemen once arrested Sam Walton. He had travelled there for a business trip, but they found him in one of their bigger stores, on his hands and knees, crawling the isles. Thinking he was a danger to society, they quickly locked him up. His friends there were completely shocked, when he called them, asking for a bailout.
His explanation was simple. He had been measuring the length of the isles, because he wondered whether Brazilian stores knew something he didn’t.
It is that type of humility and commitment that was characteristic of Sam Walton. If you are looking for the smartest person in the room, you should often focus on the one that is the most quiet. Very often, that was Sam - he always thought that he could learn something from others.
Today, let us learn from him - here are his top-ten rules for running a successful business.
Commit to your business
You have to have ultimate faith in your business and believe in it more than anyone else. If you bring this amount of passion you can overcome almost any of your shortcomings and strive every single day to be the best you can be.
Share your profits with all your associates, and treat them as partners
Treat the people working under you, as partners and they will respect and value your leadership. Encourage everyone to invest in the company as much they can. Grant them ownership and shares at a discount. Make them feel like owners and they will act responsibly and do their best to improve your business.
Motivate your partners
Always be thinking of new and interesting ways to motivate your partners and employees. Set goals, encourage competition and issue challenges. Don’t be predictable, keep everyone guessing as to what you will do next. Switch roles of the people in the company when things get stale, encourage them to learn more and make things interesting.
Communicate everything you possibly can to your partners
The more you share with the people working with you, the more they can understand the business and the reasons for your decisions. The more they know, the more they will care and hence the more motivated they will become. Information is power, and the more that you empower your employees by giving them information, the more you stand to gain.
Appreciate everything your associates do for the business
Tell your employees or partners, when you appreciate what they are doing. It’s great if you are giving them stock options or a sense of ownership, but nothing can motivate them better than a few sincere words of praise. This speaks directly to one’s internal motivation and makes one proud and happy with the work he’s doing.
Celebrate your successes
Don’t take yourself too seriously and don’t take things so personally. If you fail, find the humor and the lesson in that experience. Have fun and show enthusiasm with every small win. Celebrate it and always have a good time. Not only will it empower you, but rub your competition the wrong way. You simply try to be the one having the most fun.
Listen to everyone in the company
Figure out ways to encourage communication in your company and listen intently. Listen especially to the people who are directly communicating to your customers. Often the management discuss between themselves, and forget to listen to the guys who can really tell them what’s going on. Share the responsibility for a great business equally between all your employees and encourage their participation in making the product better. Listen to the great ideas that bubble up throughout the organization and swiftly implement them.
Exceed your customers’ expectations
That is what true customer service is all about. Don’t just meet your customer’s expectations. Give them what they expect and a little more. Listen to them, let them know that they are appreciated and celebrate them. Give them more than they are looking for and they will keep coming back. Add enough value that they will truly miss you if you are gone - that is how you build a great relationship and that is how you inspire loyalty.
Control your expenses better than your competition
This is where you should always be looking for the competitive advantage. If you have a very efficient business then you are constantly trying to find ways to keep your costs down and your margins high, while also maintaining a great price. This attitude will make you indispensable. An inefficient business can crumble even if the idea behind it is fantastic.
Perhaps the greatest advice Sam Walton gave us is to go the other way. “Ignore the conventional wisdom”, he said. If everyone is doing it in a particular way it doesn’t mean that this is the only way, or it doesn’t mean that it is the best way. What it most often means is that there is quite a good chance for you to find a niche going the exact opposite route.
You can see this clearly in Sam’s business model. While every other big discount store was focused on becoming a market leader in a big metropolis or town, he went the completely opposite direction. He focused on small towns, often with less than 50,000 people. Soon, he spread everywhere. The other discount stores didn’t know what hit them.
You might notice that Sam’s rules don’t contain any of the traditional wisdoms, like “work hard”, or “build a great management team”. That is not because he didn’t believe in those things, it was simply because he didn’t want to include things that he thought were self-evident. Of course, you have to work hard. If he, or I, had to explain that to anyone, it would defeat the purpose of talking about anything else. If you are not prepared to work hard, then don’t expect to be successful.
Finally, you might notice that a lot of these are not complicated at all. Some of them might even seem obvious to you, because of their simplicity. In fact, you are right. The rules are not hard. What is complicated is to maintain a focus on all of them at the same time and to keep coming up with new things that will achieve those goals. You can’t just find something that works once and keep applying it - you have to stay ahead of the curve, you have to constantly look for new things that will give you an even further edge.
In a lot of ways, Sam’s top business rules, have a lot to do with running one’s life.
You’ve got to be committed to your goals beyond all else. You have to find people that can help you and treat them as partners - communicate everything with them.
You have to always find news ways to motivate yourself. Be driven by a goal larger than yourself - think of what you can devote your life to, that others will appreciate. Think of how your actions can make this world a better place.
Learn to enjoy the ride, appreciate everything the people in your life have to give you and what you can give yourself. Celebrate your successes, and don’t take yourself too seriously or things too personally.
Control your finances. Learn some accounting, learn about your tax laws, learn how to run some simple calculations in your head. Think, really think, about where you are investing your money.
Listen to what others have to give you as feedback. Take all the great ideas and implement them in your life as much as you can.
And finally, when you know in your gut that you’ve got the right idea, have faith. Ignore everything that others are telling you and follow your instincts. Find your niche in what you like doing, what makes you happy and what gives you purpose. Don’t listen to others ridiculing you, trying to tell you about “the correct way to do things”, and carve your own path. Swim upstream.