Walmart’s Mike Duke knows that we are all new leaders all the time.  That’s why organizational change management is an ongoing part of his life.  Mike and his team are in touch with social, economic and political changes around the world; and they constantly monitor the results of their own choices and actions so they can adjust as needed.  Q4 2010 is a case in point.

In touch with trends

Walmart continues to evolve its business in line with social trends like the growth of online shopping and consumers’ search for healthier, affordable foods.  As Mike put it in his Q4 earnings call:

“It’s no surprise that we see growing opportunities in online shopping. I am pleased with the sales results of during the fourth quarter and expect e-commerce and multi-channel to play an increasingly important role across our business.”* and


“We found there’s a lot of interest in our global commitment to sustainable agriculture and our new initiative in the U.S. to make the food we sell healthier, and healthier foods more affordable for our customers. We were honored that First Lady Michelle Obama joined Bill Simon to launch this initiative last month.”

President and CEO of Walmart Stores, Mike Duke...

Image by AFP/Getty Images via @daylife


The last quarter of 2010 highlights how fast things can change

While Walmart had a good year in 2010 overall, they got their merchandising mix wrong for the holidays in the U.S.  Going into the holidays, they all felt good.  As Mike said on November 16 – 39 days before Christmas:

“The U.S. team is taking the right steps to position our stores for the fourth quarter and for next year.  I’m happy to see the response from our customers when I walk stores. They like our progress on merchandise.  I might add, too, that just last week, when I visited stores here in the U.S. I loved the positive energy from our associates. Our associates are really excited about the changes in recent months. Also, I really like our holiday preparations.”

But, as it turned out, they were not taking all the right steps.  At the end of the quarter, Mike explained that Walmart’s U.S. stores had a -1.8% comp store sales decline and that

“…many of the fourth quarter problems stem from merchandise assortment and presentation issues that contributed to customer traffic declines.”

Walmart’s US president, Bill Simon went further:

“We lost sales by having seasonal merchandise spread across too many areas of the store during the fourth quarter. Going forward, our seasonal merchandise for holidays such as Easter, Halloween and Christmas will have integrated targeted plans to present a more compelling presentation and product offering for our customers… Under the leadership of our new chief merchant, Duncan Mac Naughton, we will continue to work with our suppliers to deliver the broadest assortment possible at the lowest price in the market.”

The point is not that Walmart got something wrong.  We all get things wrong.  The point is that they saw it, recognized it and adjusted with “a more compelling presentation” and a new chief merchant.

[Note 3 1/2 years later, Mike Duke’s replacement, Doug McMillon ended up firing Bill Simon.]

Adjust to changing circumstances

One of the main advantages to adopting the mindset that we are all new leaders all the time is that you and your team will be ready at all times to adjust to changing circumstances and surprises. Remember, the ability to respond flexibly and fluidly is a hallmark of a high performing team.

Not all surprises are equal. Your first job is to sort them out to guide your own and your team’s response. If it is a temporary, minor blip, keep your team focused on its existing priorities. If it is minor, but enduring, factor it into your ongoing evolution.

Major surprises are a different game. If they’re temporary, you’ll want to move into crisis or incident management. If they’re enduring, you’ll need to react and make some fundamental changes to deal with the new reality.

Part 4 of the 10-part series for new leaders

Stay tuned for the fourth post in my 10-part series on how new leaders and their teams can get done in 100 days what would normally take six to twelve months. The next column in The New Leader’s Playbook series will highlight how Michael Brune, executive director of The Sierra Club, planned ahead for his first day on the job.

Click here to read about each step in the playbook

Click here for YouTube videos highlighting each step


*Quotes from Seeking Alpha’s transcript of earnings calls