McCombs TODAY

Lee Scott, chairman of the executive committee of the board of directors and former CEO of Wal-Mart, spoke with Dean Thomas Gilligan on campus Oct. 12 as part of the VIP Distinguished Speaker Series.

Dean Gilligan began by asking Scott about his very first job, which Scott said was scrubbing toilets at his dad’s service station on Route 66 when he was in the sixth grade. According to Scott, the most valuable lesson that he learned at that job came from watching his dad interact with the garbage man. Since the garbage man had a prison record, most people hid things when he came into the office, but Scott’s dad never did. As a result, the man stole from everyone except his dad because he was the only one who trusted him.

That lesson in trust and integrity came up again when Scott was asked what his biggest mistake was.

“I had a person working for us who was very good,” Scott said. “He broke some rules…and I allowed that. In the end he set his own rules in areas of substance and broke those. It ended up being extraordinarily difficult for him, extraordinarily difficult for the company and extraordinarily difficult for me personally. If somebody’s breaking the rules, regardless of how good they are and how much you admire them, you have to hold them accountable.”

Scott went on to say that when Wal-Mart founder Sam Walton was alive, if you fired someone for an ethical breech you were also at risk of being fired if the breech occurred because you didn’t have the right controls in place with your people.

On a lighter note, Scott said that one of his greatest accomplishments was the team of people that he helped create at Wal-Mart.

“It’s just a phenomenal team of people with a real sense of ethics and a commitment to customers and a commitment to associates,” said Scott.

Scott also talked about how Wal-Mart sets itself apart by doing things differently. According to Scott, he used to share a room with the CFO when they would travel together instead of booking individual rooms. In addition, Wal-Mart does not pay for alcohol on trips.

“If you want to drink, the company doesn’t care if you have a glass of wine when you’re at dinner because you’re a responsible adult, but we don’t think the customer wants to pay for you to have a glass of wine,” Scott said.

Scott returned to this topic later on in the interview when he said that the Wal-Mart offices haven’t been remodeled since he started with the company in 1979. He contrasted this to Merrill Lynch, who he said recently spent $1 million to remodel their offices even though they are facing bankruptcy.

Editor’s note: For more on Lee Scott, his leadership at Wal-Mart and recent changes within the company, check out this interesting article from Fortune, “Why we don’t hate Wal-Mart anymore.”

Maintaining Differentiation (1m:29s, 2MB)

Biggest Mistake (2m:05s, 2MB)

Integrity (2m:02s, 2MB)
 

The Future (5m:03s, 5MB)