Speaking at The Economist’s CFO Summit 2013, Cathy Smith, Senior Vice President of Strategy and Chief Financial Officer at Walmart International, discussed how global companies can juggle multiple challenges and steer their business towards sustainable growth.
Walmart opened its first shop outside of the U.S.A. in Mexico in 1992. Since then the company has grown significantly and now operates shops in 26 countries, under 64 brands, including ASDA. The business also runs 14 different store formats, ranging from local pharmacies to large supermarkets. The international division of Walmart is now one of the world’s largest companies and generates close to $130bn in revenue every year.
“For many global companies, with size often comes complexity, and with that complexity comes some inherent risk.”
Most of Walmart’s growth has been organic and the company has delayed expansion plans to ensure it had the right people and processes in place to support further development. Despite these precautions, rapid growth, changing economic landscapes and multiple store formats have all added considerable complexity to the company’s business strategy.
“We work every single day now to try and figure out how to take complexity out, and that’s part of our mantra.”
Building on a Strong Company Culture
Historically, Walmart was a company which prided itself in its “freedom within a framework” philosophy. As the business has evolved and the level of complexity has grown, so too has the need to implement a more structured framework. This methodology had to be balanced with local knowledge. Effective marketing, for example, can vary wildly depending on the territory.
To deal with this complexity, Walmart International has focused on four key leadership skills:
- Collaboration: In today’s global environment and amidst increasing decentralisation, it is essential for business leaders to collaborate with each other across the company. This skillset ensures that best practice is shared and, ultimately, that results are delivered.
- Leverage: Becoming part of Walmart International needs to offer more than just obvious advantages such as scale buying. The wider business has much more to offer, including knowledge relating to launching hypermarkets and effective sourcing.
- Transparency: The modern business world is constantly under scrutiny. In this environment it is pivotal that companies hold themselves to the highest standard. Easy access to information means that world will tell your story whether you want it to or not.
- Trust: On an individual level, building a reputation is an important element of any career, particularly for those who deal with company finances. For a company, earning and keeping the trust of its customers is the key to success.
Summing up her presentation, Smith said; “Culture is how we believe we best serve our customers. For us it starts at the foundation of our common purpose and our common mission, and that’s saving people money so they can live better.”