Innovation for Leaders in Organizations:

Innovation for Leaders in Organizations: Sam Walton

The emergence of Wal-Mart as a global force in discount retailing is in large part due to the vision and commitment to continual process improvement that its founder and CEO, Sam Walton had. His leadership frameworks and core values are what continue to propel Wal-Mart forward into new international markets while continually increasing supply chain, logistics and fulfillment processes internally (Tong, Lee-Ing, 2006). The intent of this analysis is to evaluate the key innovations both from a business model and process perspective that Sam Walton created and the leadership concepts, frameworks and culture of Wal-Mart continue to nurture and strengthen today.

Sam Walton Innovations in Discount Retailing and Supply Chains

It was evident early on that Sam Walton had a passion not just for retailing, but the many underlying logistics and supply chain processes, strategies, and systems that were necessary for the retailer to expand (Friedricks, 1995). Sam Walton's depth of retailing expertise was partially grounded in strong accounting and financial management skills, coupled with a transformational leader skill set that put respect for people at a very high level in Wal-Mart's culture. In many respects, Sam Walton was the prototypical transformational leader, striving to bring together a rapidly expanding workforce with a unified vision and focus on customer service excellence (Ramanathan, Gunasekaran, Subramanian, 2011). The orientation of Wal-Mart quickly began to reflect the founder's values, with customers' needs and values being at the very center of the culture. This made expansion strategies more unified and direction and focus, as all decisions were based on how could the customer be more profitably and completely be served

(Krishnamurthi, 2001). The strong customer-centrism, focus on quality, depth of logistics execution expertise and transformational leadership were all a direct result of the innovations Sam Walton made both to the low-price retail model and many areas of supply chain management as well (Krishnamurthi, 2001). It took a very unique leadership skill set to keep all of these elements unified and working towards a common objective while also paying attention to the accounting, finance, operations and customer service metrics of performance critical to the growing Wal-Mart business (Ramanathan, Gunasekaran, Subramanian, 2011). Sam Walton had the ability to take all of these highly diverse functional areas and orchestrate them into a common series of goals and objectives while also creating a corporate culture that celebrated customer successes above all (Tong, Lee-Ing, 2006).

While the logistics, supply chain execution, management and optimization along with exceptional control over pricing is what Wal-Mart is known for today, it was Sam Walton who initially defined the supply base as strategic partners (Friedricks, 1995). Being partners, the concept of collaborative supply chain planning and execution could easily drive greater value and lower cost for the core Wal-Mart customer base, the Price Value Shopper (Blanchard, Comm, 2008). According to Wal-Mart executives, Sam Walton believed heavily in the vision and mission of his stores as being the necessary foundation for America's middle class to make ends meet (Ramanathan, Gunasekaran, Subramanian, 2011). His focus on managing price as aggressively as he could, in collaboration with suppliers, set a new foundation for low-price retailing while also creating a foundation for middle class families to afford to live within their means (Blanchard, Comm, 2008). This is one of the core precepts of his low-price-everyday (LPED) value proposition and the foundation of how he wanted the company to be run for the long-term. Sam Walton was exceptional in his ability to orchestrate all of these elements together and still create a highly unified culture galvanized with a vision of serving customers.