This is Wal-Mart CEO Lee Scott quoting Martin Luther King:

“The time is always right to do what is right.”

This is also Wal-Mart CEO Lee Scott, after one of his managers asked him why “the largest company on the planet cannot offer some type of medical retirement benefits?”:

“Quite honestly, this environment isn’t for everyone. There are people who would say, ‘I’m sorry, but you should take the risk and take billions of dollars out of earnings and put this in retiree health benefits and let’s see what happens to the company.’ If you feel that way, then you as a manager should look for a company where you can do those kinds of things.”

Does anybody else see a problem here? Today’s New York Times has a story about two years’ worth of internal electronic correspondence between Scott and his managers. These documents, leaked by a disgruntled manager and first obtained by our friends at Wal-Mart Watch, demonstrate more effectively than ever before why Wal-Mart is imploding and will eventually self-destruct: What Wal-Mart says (even within the company) and what it does are almost entirely opposite from one another.

Indeed, the Times almost implies that Scott is schizophrenic. Check out this summary of all the documents:

The Web site shows many sides of one of the nation’s most powerful executives. He denounces managers who complain about the company or their subordinates. He frets about the success of his discount rival Target. He exhorts employees to act with integrity. He mocks General Motors for problems caused by its generous benefits. He rejects a manager’s suggestion that Wal-Mart has created “a culture of fear,” and he hails Wal-Mart’s performance in responding to Hurricane Katrina.

Just for starters, doesn’t denouncing managers who complain about employees create a culture of fear? According to Scott, he “pops into meetings unannounced ‘to make sure there’s not a filter keeping me from hearing what’s really important.’” But if he rips into managers who ask logical questions, are they really going to feel free to talk to him openly and honestly? So what do managers who can’t talk freely do? Leak documents to Wal-Mart Watch, of course.

The other reason Wal-Mart is imploding is because it leaks like bad plumbing. I suspect that Lee Scott and I agree that a business simply can’t operate if its most important internal documents [first the health care memo, now this], end up on the front page of the Business Section of the New York Times. The difference between us is that if I were CEO of Wal-Mart, I’d change the company since the managers are right. Scott, on the other hand, will probably start an internal investigation and conduct a purge. Then he’ll again have to deny that Wal-Mart has created a culture of fear to its increasingly fearful employees.

PS I’m hoping Wal-Mart Watch will be making all this stuff available on the web soon. If they do, I’ll post more analysis as soon as I have time to give it a good looking over.

This entry was posted on Friday, February 17th, 2006 at 0502 by Jonathan Rees and is filed under Walmart. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.