Moonlight rides gave Sam Walton a way to connect with his logistics team. He often spent nights riding in the cabs of Walmart delivery trucks. He wanted to hear what drivers were seeing. On one of those late-night trips, a driver suggested backhauling, picking up merchandise on the return trip instead of driving back empty. That a driver suggested it to the founder says everything about the employee ownership culture Walmart was building.
Walton didn’t just say thanks. He implemented it immediately. He treated the suggestion as if it came from a partner, not an employee. That employee ownership culture made everyone feel responsible for improving the business.
If you take care of your people, they will take care of your customers.” — Sam Walton
Take Care of Your People
It’s 1983. Walton needs to motivate his team. He makes a bet with Walmart’s CFO, David Glass. If Walmart hits an 8% pre-tax profit, Walton will hula dance on Wall Street. Glass thinks there’s no chance it happens.
The associates hit their goal. In March 1984, the 65-year-old chairman showed up in full Hawaiian regalia: grass skirt, shirt, and leis. He hula danced in front of Merrill Lynch’s headquarters. No one believed he’d do it. He was reinforcing an employee ownership culture.
The hula dance wasn’t just a marketing stunt. It showed Walton’s belief that a leader should be approachable. Leaders should be willing to do anything, including looking ridiculous. He wanted to celebrate his team’s success in hitting their goal.
In Made in America, Walton recalls reading a trade publication. He notes that 76 of the top 100 discounters from 1976 were gone. Many started with more publicity and in larger markets than Walmart. These discounters were once bright stars that faded.
He thought about what led to their demise and why Walmart kept going. It came down to failing customers, neglecting stores, and ignoring their people. The reason Walmart was one of the 24 remaining retailers was that it did the opposite.
Walmart’s edge was simple: it took care of its people. Its people then took care of its customers. That’s why Walmart didn’t fade. Take care of customers. They’re the only reason you stay in business.
Share Profits with Your Associates
Early on, Walton planned profit-sharing only for managers. His wife, Helen Walton, argued that everyone should share in the profits. She argued that if everyone had an ownership stake in the business, they would act like partners rather than just employees.
So in 1971, one year after Walmart went public, Walton introduced a profit-sharing plan. Associates with at least one year of service received contributions that they could take with them. This was unheard of in the 1970s corporate world.
Much of the profit-sharing came in the form of Walmart stock. This meant many long-term hourly employees retired as millionaires during the stock’s meteoric rise over the next several decades.
Walton believed the more profit he shared, the more the company would earn. His logic was simple: treat associates well, they treat customers well, and customers come back.
The real value in a business is repeat customers. Not one-off sales driven by expensive marketing. Satisfied, loyal, repeat customers drove Walmart’s success. Those customers are loyal because Walmart associates treat them better than at other stores. The most important contact made is between the associate in the store and the customer.
Walton believed sharing profits was essential and made it one of his core rules. Share profits with associates and treat them like partners. Treat them as partners, and they will perform better than your wildest expectations.
You can keep corporate control and still behave like a partner. Walton argues for encouraging your associates to hold an ownership stake in the company. Offer discounted stock and retirement equity. He believed it was the single biggest driver of an employee ownership culture.
Communicate Everything You Can To Your Partners
In the early 1960s, Walton had a radical idea: share store performance and profit data with every associate. Barely any company was doing this in retail, much less in the middle of the 20th century.
Walton believed that information is power. But only if it’s distributed rather than kept secret. He argued that the gain from associates having this information far outweighed the risk of competitors getting hold of the data.
Walton insisted store managers shared this data with everyone, including hourly associates. He wanted everyone to see how much the store made, what the expenses were, and how individual efforts affected the bottom line. He felt that doing this would build an employee ownership culture.
His philosophy was simple: the more associates know, the more they’ll understand. The more they understand, the more they care. Once they care, no one can stop them.
This ties to one of Walton’s core rules: communicate everything you can to your partners. If you don’t trust your partners to know what’s going on, they’ll know you don’t consider them a partner in your business.
Walton found that creating the Saturday morning meeting was a great way to disseminate information to everyone. These weren’t standard, boring corporate meetings. They were high-energy sessions. Specific sales numbers and expenses from the previous day were discussed.
He encouraged associates to pick a single item and see how much they could increase its sales. Sharing the results of these experiments across the entire company helped everyone to know what was and wasn’t working.
Transparency turned associates into merchants who could now understand the economics of the business. It allowed Walmart to move faster than its competitors. Action items were implemented by Monday. Competitors were still reviewing theirs.
Listen to Everyone in Your Company
Attorneys aren’t the only ones who use yellow legal pads. Sam Walton religiously carried one with him on store visits to solicit feedback from associates. He’d ask them what they were doing wrong, and the best idea they’d heard that week.
He believed the best information lived on the floor, not in management. He’d talk to these associates during his visits. He’d write down their ideas for improvements in his yellow legal pad. He wanted to make sure their voices were heard. It was one of many ways he built an employee ownership culture.
No ideas were off the table when Walton visited a store. Even crazy ideas could boost morale. Listening is a two-way process. He wanted to have an engaged company. That required hearing from associates and listening to their ideas, questions, and concerns, instead of issuing orders from an ivory tower.
Great ideas can come from anywhere if you’re willing to look up and listen. He took ideas seriously. He created a culture where everyone felt valued. In turn, this led to the growth of Walmart.
Listening to everyone in your company is rule number seven in Walton’s rules for business in Made in America. He pushed responsibility down so he could hear what was happening on the ground.
Walton didn’t just listen. In one meeting, an associate suggested expanding store hours to fit farming schedules. Walton approved it.
In another story, associates told him there was a lack of showers at the store. Management had ignored their requests to install a shower. Walton had them installed immediately. He listened and then solved the problem.
Listening means not talking at people. It means creating buy-in. Engaged employees take better care of customers.
Employee Ownership Culture
Walton didn’t obsess over customers alone. He built it by turning employees into owners, partners, and operators. Take care of your people, share the upside, tell them the truth, and listen closely. Do that long enough, and customers take care of the rest.
