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The Honest Era
Captivated by Values
Imagine a company that is known for unbearably long checkout lines and poor customer service. They pay their workers low wagesâso low, in fact, that many of them are forced to rely on Medicaid and food stamps to survive. Then picture this company with a CEO who makes more in an hour than most of his employees do all year. Imagine that this company has poorly run and understaffed stores filled with shelves stocked with goods produced overseas and often made by underpaid workers in inhumane conditions. And worse still, when they want to open a new store, they target rural communities, and once theyâve settled in, use predatory pricing to drive out small businesses. It is one of Americaâs most hated companies.
Would you do business with such an organization?
No, of course not.
But the truth is, you and 245 million others do every single week.
But Walmart didnât start out this way.
Sam Walton was born in Kingfisher, Oklahoma, in 1918. He was the first son of a local banker, an Eagle Scout, avid hunter, and quarterback of his high school football teamâthe stereotypical âgood oleâ boy.â Later he would serve as an army captain in World War II. In 1962, Walton birthed the first Walmart store in Rogers, Arkansas. His vision was to open as many large discount retail stores as possible in small, rural communities across the country. He was a strong leader and widely recognized as a man of integrity. Walton founded the organization on three basic beliefs: respect for the individual, service to customers, and striving for excellence. Undergirding it all was the commitment to âacting with integrity.â1
Sam was known for job creation and paying his staff above industry standard. He demanded five-star customer satisfaction and encouraged Walmart âassociatesâ to greet shoppers with a smile and always look them in the eye. Those associates who worked the hardest to capture and keep customers happy could expect limitless opportunities for advancement.
The plan worked, and three decades later, Walmartâs stock was valued at $45 billion, and Forbes named Sam Walton the richest man in America. Even in the economic downturn of the early 1990s, the company thrived, increasing sales by more than 40 percent.2
As many of us have seen, Walmartâs current practices have deviated from their founderâs original vision. So there is a deeper lesson to be learned: no company starts out bad. Not even the ones we hate most. The question is, how did they get there?
We All Start Clean
When a company is first born, it is much like a human babyâpink-faced, innocent, existing almost exclusively for the benefit of others. Think about the start-up companies you know, and distill the common characteristics. Employees are excited. Thereâs a clear mission and vision, usually focused around solving a problem or creating a better system or product. And, of course, every customer is considered critical.
No company starts out dirty, because they cannot afford to. They have to convince consumers they are worth their time and money. When youâre an unknown entity, itâs deadly to be recognized as unethical, impersonal, or misleading. As a result, your focus is the industrious pursuit of customer loyalty and your mission to create nothing short of an incredible and memorable experience.
The Honest Era is a time in a companyâs journey when mission, quality, and integrity live at the core of the organization. Their leaders are fanatically dedicated to improving not only the lives of their customers but their workforce too. They bring intense innovation to everything from marketing and customer support to their business model and even their supply chain. They are focused on the things that matterâemployees, customers, and their brand. They fight for team buy-in at every level and celebrate even the smallest victories as a sign of progress toward a better world.
You see this in the recent boom of Internet-based companies launching from Californiaâs infamous Silicon Valley. Thousands of entrepreneurs are starting companies that redefine the definition of integrity in business, commerce, and capitalism as a whole.
Take, for instance, Airbnb.com, which has tipped the hotel industry on its head by offering customers the ability to host and rent homes across the country. To top it off, they offer 24-7 customer support where real humans answer the phone. Combine that with incredible employee perks, such as $2,000 per year per employee for travel, a bring-your-dog-to-work option, free organic lunches, and complimentary health and fitness classes available almost around the clock. They have had incredible success in the marketplace, generating what could soon be $1 billion in annual revenue and renting more than 12 to 15 million rooms a night after only a few years in existence.3
THE HONEST ERA IS A TIME OF PEOPLE OVER PROFIT.
The beautiful models of the Honest Era are naturally exceeding expectations and winning the hearts of both their customers and employees. History has proven that all lasting commerce is born from a dedication to high character, high quality, and high customer loyalty. This is why the Honest Era is a time of people over profit.
Because of their noble characteristics, companies naturally succeed. We all crave to do business with exceptional and energetic organizations that we can trust. And in return for our patronage, companies can expect to grow a more captivated and loyal following of their brand. When companies are in this era, everybody wins. The economy is strong, customers are happy, and companies are profitable.
But as history tells us, these organizations grow. And as they swell, their processes adjust, and the business changes. In Walmartâs pursuit of growth, for example, something was lost. An organization that once desired to serve people in rural communities ended up harming the small businesses around them. Everywhere a new Walmart opened, long-standing local stores were forced to permanently close their doors. In order to keep prices low, Walmart purchased more goods manufactured overseas, which meant fewer regulations on ethical working conditions. And Walton, a man who was once known to be generous, opted for hiring as few employees as possible and never paying them more than he had to.
After Walton died in 1992, customers began wising up to the retail giantâs modern practices, and public hostility began to grow. By the early 2000s, Walmart became one of the most hated companies in America.4
As it turns out, low prices come at a high cost.
History demonstrates that as companies grow, they often begin making subtle changes and deviations to accommodate that growth. Their organizational gazes shift from honesty and quality to efficiency and quantity. They arenât Mr. Hyde yet, but they have started walking a path of transformation from noble beginnings to something they never intended to be.
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The Efficient Era
Addicted to More
John Tyson started a chicken company from humble beginnings in 1935 out of Springdale, Arkansas. He built his business on the backbone of reliability and quality, which led to the expansion of his company into several Midwestern states. He grew the company for the next several decades, becoming vertically integrated and reaping himself not only hefty profits but also a good name in the industry.
In 1967, the company propelled toward vast expansion by focusing on increasing productivity and efficiency to meet the increasing needs of a chicken-hungry country. The company bought up competitors, expanded into the beef and pork markets, and secured lucrative contracts to supply low-cost (and coincidentally, low-nutrition) chicken nuggets to fast-food chains, such as McDonaldâs.
Furthermore, to meet the demand of the companyâs rapid growth, Tyson adopted and even pioneered some of todayâs controversial...