Do We Have To Consider Changing?

The Latest Word from John Ed Mathison

Organizations have two choices – they can keep doing business as they have always done it, (and will probably soon be out of business), or they can constantly examine new ways to make positive changes that will be beneficial in the short term and long term.

Forty-one years ago I moved to Montgomery and the favorite eating place for my kids was Howard Johnson’s.  At that time Howard Johnson’s did more business than Kentucky Fried Chicken and Burger King combined.  Howard Johnson’s didn’t change – when is the last time that you ate at a Howard Johnson’s?  You probably have had a “Big Boy” or some “finger licking good” chicken lately.

We all can learn from Wal-Mart.  It is the largest producing company in our country.  But it is not satisfied.  They have a new man in charge – Doug McMillon.  He has immediately started changing the culture of being satisfied with minimal growth to an attitude of how can we improve.

In the past Wal-Mart said that bigger stores were better and prices were “always low.”  The new move is to go from those 200,000-square-foot superstores to convenience-type stores at about 10,000 to 40,000 square feet.  They will be moving from the “everyday low prices” model to using a “dynamic pricing” system so the prices can change on fluctuating data and competitive offerings.  He also is focused on  improving the online business.

Experts will tell you that the longer a person is in an organization the more reluctant that person is to initiate change.  McMillon is a “lifer.”  His family moved to the home of Wal-Mart, Bentonville, Arkansas, when he was sixteen.  He started to work at Wal-Mart unpacking boxes in a distribution center.  He has gone from there to become the top executive.

It is interesting to me that McMillon immediately required every executive to read a book, “The Everything Store,” which is the book about and its founder Jeff Bezos.  Surprisingly, Bezos imitated Wal-Mart a few years ago in bringing Amazon to its success.  McMillon was ready for Wal-Mart to learn from the people who learned from Wal-Mart!  Sometimes a competitive spirit blinds us to opportunities to learn from a competitor.

It is also interesting that different emphases will be placed in different markets.  While in the US the new look will be smaller, Wal-Mart will actually place a bigger emphasis on big stores and “everyday low prices” in countries like Brazil and China.  Every place is different.  Figure out the best way to do business in that place.

McMillon requires his top people to visit stores and ask employees and customers simple questions.  From that they make changes.

One of the biggest changes came when they noticed complaints about the Wal-Mart store in Troy, Alabama.  They said a customer named Sherry had talked about shoddy customer service and a dirty store in Troy.  That kind of news spreads fast.  The store manager was replaced and the store changed its DNA to being extremely clean and shopper friendly.  This year they are running 2.4% higher than the “dirty store” which had a negative 3.3%!

I have been excited in this leadership ministry because I have been invited to so many churches that are doing really well, but want to do better.  It is tough to work with a church that is declining and reluctant to change.  I have been able to consult with and work with leaders in many churches to “go to the next level.”

Any organization – church, business, non-profit organization, sports team – cannot continue doing things the way they have always done them.  Scott Mushkin of Wolfe Research has analyzed the new Wal-Mart philosophy and says “Doug McMillon is there to bring Wal-Mart into the 21st century.”  Many organizations (especially churches) need to get into at least the 20th century – but it takes a lot of vision and planning to function in the 21st century!

Wal-Mart can teach us all about change!

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