How Doug McMillon Keeps Walmart Moving Forward

Full Transcript

Note: This transcript was generated by an automated system and has been lightly edited for clarity. It may contain errors or omissions.

Aislin Roth:  Welcome to View from the Top: The Podcast. I’m Aislin Roth, an MBA student of the Class of 2025.

Michael McDowell: And I’m Michael McDowell, a producer at Stanford Graduate School of Business. Aislin, could you set up today’s conversation for us?

Aislin Roth: Of course. Today I’ll be interviewing Doug McMillon, the president and CEO of Walmart. Doug has been in this top spot for over a decade now, and this was actually our second time having him back at View from the Top.

Michael McDowell: That’s right.

Aislin Roth: Third time, if you count one time he sat in my shoes interviewing another CEO. So it’s really exciting to have him here.

Michael McDowell: So, Walmart is one of the largest companies in the world, and as you mentioned, Doug has led it for more than a decade. Walk us through how you approached this conversation.

Aislin Roth: So I guess where I started was looking back to that first interview he did and seeing what was his thinking like then and what are some new questions and some refresher ones that we can look back on, and how has his leadership journey evolved, how has Walmart changed and grown as a company?

Michael McDowell: Yeah.

Aislin Roth: It’s a radically different business, much more e-commerce centric than it was a decade ago. So I started there, I also spent some time being a, a shopper myself and going to visit some Walmart stores. There’s an ex-Walmart employee in our class at Stanford, so I got to spend some time chatting with him about the culture at Walmart.

Oh, very nice.

So really kind of getting on the ground to understand more about the business.

I thought Doug really effectively wove leadership lessons into serious strategy talk. Is there anything you’d like to preview along those lines or, or elsewhere, for our listeners?

Doug spoke a lot about the difference between stating your values and actually living by them.

And how do you implement things in practice instead of just corporate speak? And Doug gave a lot of great examples. I mean, he still, he parks at the back of a Walmart, he helps bring shopping carts inside, the executives are not above any of these jobs, he does a lot of mystery store visits even today.

So that culture of it, it starts from the top, and the behaviors and precedents that you exhibit may trickle down throughout the business, I thought was a really great leadership example of living by your values.

On a personal level. What were you most excited to hear him dig into?

I loved how Doug spoke about the future of Walmart and how today Walmart helps to save you money, but looking to the future, Walmart is also focused on helping to save you time. And a lot of their new business ideas from drone delivery to the rise of e-commerce.

Wow.

And AI shopping agents.

Yeah.

They’re all designed on helping us shop, not just more cost efficiently, but in a faster way, so I think that’s a really exciting world that he’s describing.

Well, without further ado, will you please play the tape?

Let’s do it.

Aislin Roth: Well Doug, welcome back.

Doug McMillon: Thanks for letting me come back. Hi everybody.

Aislin Roth: Doug was first here in 2015. And then you were back the very next year, this time sitting in my shoes as the interviewer for your good friend, Indra Nooyi.

Doug McMillon: That was fun. They basically said I couldn’t come back again unless I brought Indra. So, we cut a deal and she came with me.

Aislin Roth: Well, you certainly delivered. We’re inviting you back for a very third time. But I took a look at your interviewing style. I took a few notes, so should we take a look?

Doug McMillon: Sure. I want to start with maybe the most important question, and that is when you were in your university and you were playing cricket, what position did you play on the university team?

Indra Nooyi: You know, first of all, do you know what cricket is all about?

Doug McMillon: I do not, still —

Indra Nooyi: So, it’s not going to make a difference what I tell you.

Doug McMillon: I’m not really very interested either.

Indra Nooyi: Okay.

Doug McMillon: After that, Indra challenged Pepsi versus Walmart in cricket. And she flew a cricket team from PepsiCo, these all-stars with fancy uniforms to Arkansas to play cricket against a team that she didn’t know we had, and we beat them, and kept the trophy. And she went home a little, well, not happy, and the Wall Street Journal wrote about it and put it down in the bottom right-hand corner on the front page, and I reminded her of that fairly frequently.

Aislin Roth: You knew more than what you gave away.

Doug McMillon: I knew nothing. Except that we had a team.

Aislin Roth: Well, Doug, I am interested, on that note, when you were in high school and you were playing basketball, what position did you play?

Doug McMillon: I got to play point guard.

Aislin Roth: Point guard. Not quite captain, but a close second. Well, Doug, with the most important question out of the way, there’s so much for us to talk about. A lot has changed since you were last here, so let’s dive in.

Doug McMillon: Okay.

Aislin Roth: You’ve been at Walmart for over 40 years, from unloading trucks in high school to leading the company today. So, what about your leadership style has stayed constant and what has had to evolve as your role changed?

Doug McMillon: Yeah. I think the thing that’s been consistent is that this is a team sport and nothing happens through the work of just an individual. We all do this together and it doesn’t matter whether you’re going to do a startup or you’re at a big company, that’s going to be the case. And what sport taught me was the importance of that and how to treat a teammate, and how to work together. And I love having a scoreboard and competitors, and that’s been a consistent theme is teamwork.

What’s changed is that there’ve been times when leaders have to make decisions, and if you had read my 360 when I first started as a CEO, it would’ve repetitively said, “You take too long to make decisions, you’re participative and that’s good, but you need to move faster, be decisive.” And as the years went, that stopped being on my 360 because I think I got more confident and more self-aware that sometimes decisions just needed to be made. And if you fast-forward through to 2020 when the pandemic happened and how things were changing so quickly and the team and I needed to make decisions really fast, that kind of awareness and decision-making became even more important.

Aislin Roth: Well, speaking of making decisions, you’ve been CEO for over a decade, it’s a lot longer than most can claim. And as you alluded to, you’ve had to make a lot of decisions in high uncertainty periods from the pandemic to the rise of e-commerce. So, how do you personally stay centered and make decisions during these times of high uncertainty?

Doug McMillon: First of all, I would tell you that life is short. Enjoy every day because you’ll wake up and you’ll have been somewhere for 40 years and I still feel young inside. It’s confusing actually when I look in the mirror. It’s like, “Who is that?” And even that video, I look different, which is not great. So, as it relates to the consistency and staying grounded, faith, family, those things that really matter that are most important, and I was telling you earlier, you get a bit of muscle memory with experience and you can discern faster what’s really serious and what’s not. And there are times as a leader when you need to delegate and when you need to let people do their jobs. And there are other times when you need to stop, clear your calendar, and go deep on a subject to really make sure you’re resourced right, that the problem’s getting solved. So, I think that experience has really been helpful.

Aislin Roth: Well, Doug, you famously said, “If you want hard, try to take a company 50 plus years old at this scale and change it.” That’s arguably a lot harder than startup life. So, how do you take a company and instill change and innovation without losing sight of the loyalty and DNA that helped build the company in the first place?

Doug McMillon: Yeah. Well, first of all, being at a startup sounds great sometimes and some of you may be doing that and I think that’s awesome. And as you do that, my encouragement would be to be clear on your purpose and the values and culture that you want your organization to have, and then behave that way because it doesn’t matter what you say as much as it matters what you do. In our case, when I moved into this role, there were a lot of questions about strategy. We were, way too small as it relates to our e-commerce business, for example, and we were in a lot of countries around the world and there were questions about the role of those. So, a fairly long list of strategic issues. And the team that I was working with took those first few weeks and months to really get away, listen to each other, and think about strategy.

And one of the things that we concluded early on was the list of things that needed to change was very long, but the list of things that needed to stay the same and be strengthened and nurtured was relatively short, and it’d be helpful to people if they knew what was going to be consistent. So, in the first few months in this role, we came back and we’ve got 2.1 million associates around the world and a large number of people, 1.6 million in the United States. So, communication’s got to be simple and you’ve got to think about how communication flows and scales across the organization. And so what we said was, we want to assure you that the purpose of the company is going to be consistent. And Sam Walton, our founder, shortly before he passed away, received the Presidential Medal of Freedom from President George H.W. Bush who came to Bentonville to give it to him because he was really sick and in fact he passed away just a few weeks later.

And when Sam accepted that medal, he said, “The secret is we’re all working together and we get great ideas from all over the company. And as long as we keep doing that, we’ll be able to show people what it’s like to save money and have a better life, a better lifestyle around the world.” And that is our purpose, save money, live better, and it gets me up in the morning and when I get to meet customers and talk to them in our stores or wherever, the fact that they actually have a better life and they can tell me stories about how they could afford to make a tuition payment or pay for their car or their apartment or whatever, that really does motivate me. So, that purpose was consistent and we said to everyone, “We really believe in that purpose and we’ve thought about it.”

And then the second thing is we have four core values and we know what they are. Those are going to be consistent and we want those behaviors to match those values. So, the human operating system, the way you would expect to get treated here, all of that’s going to stay the same. And by the way, everything else is probably going to change. And if customers don’t want stores, we won’t have stores. And there were some people who rolled their eyes like, “Right.” But we meant that. We’re willing to change everything else to fulfill that purpose. And having been around the company for so long and seeing what Sam and Helen Walton did and what other leaders did after them, I really believe this company should be here for the next generation. And everything we’ve been doing to try and change is aimed at that. How do you change enough that you’ll be relevant in 50 years’ time?

Aislin Roth: Remember your roots, but don’t let them hold you back. That’s what Sam would want.

Doug McMillon: Be willing to change everything else. And if we were with a bunch of Walmart associates right now, we could say the only thing that’s constant in our company other than our purpose and values is, and they would respond back, change.

Aislin Roth: Amazing. Well, Walmart is not just a company, you’re a community for millions of people and employees around the world. So, how do you think about your sense of responsibility, especially at such a scale, not just to shareholders, but to society at large?

Doug McMillon: Yeah. Great question. So, we were, in the beginning, a startup and we focused on customers and associates. And our founder, as founders do, really got us focused on those two stakeholders. And we would say things like, “If you take care of those two stakeholders, the rest will work out.” And the newspapers at that time were writing great things about the company and Sam would say, “Ignore those things, don’t read your press clippings, stay focused on customers and associates.” And we kept growing and getting bigger and bigger. And for a variety of reasons, started really getting criticized. Sam passed away in 1992, by the time you get to the late ’90s, early 2000s, Walmart’s being criticized for harming mom and pop retail, for sprawl, for not paying associates enough, and a variety of reasons. And we were not very sophisticated at managing our reputation. And our critics went to the whiteboard and got to tell everybody, this is who this company is.

And we were not good at responding and say, “Wait a minute, there are really good people here working hard to fulfill our purpose. Don’t they know we have really good intentions.” And it didn’t matter what was happening inside the company, outside the company, we were really getting criticized. And for a few years we tried to fight back with that in a variety of ways and failed miserably at trying to refute those things. And our CEO at the time is Lee Scott and I was reporting to Lee, and Lee after working to try and overcome the reputational challenges at one point he said, “You know what? This is just not working. Let’s just stop trying to fight back on that and instead, let’s go find the people that think they hate us and let’s listen to them and if they have ideas on how we should change the company, let’s implement those ideas.”

So, we started reaching out to people that were environmentalists and other types of people that are interested in human rights and other issues. And some of them didn’t respond, some didn’t want to meet with us. I remember one meeting in particular where the person said, “I’ll meet you, but it’s got to be in the basement of this hotel down the street. You come in one way. I come in the other.” And we thought we were going to go learn about the environment and we’d started thinking about our role as it relates to the environment differently and reading books and educating ourselves on plastic waste, and all kinds of stuff. So, we go into this room and this person just wants to talk about wages and healthcare. I’m like, “Okay. So I thought we were here to talk about the environment.”

But that experience along with the other things that we read kind of taught us that these systems are all connected and ultimately we care about the environment because we care about people and people need to be taken care of whether they work in the company or they’re working in our supply chain or somewhere else. And so our purview started widening and we started thinking about stakeholders differently, not just customers and associates, but communities, the planet, all stakeholders. And Lee should get all the credit for shifting our mindset. And it led to huge progress. We set three big goals related to waste, renewable energy and selling sustainable products. We did things like Project Gigaton where we took a ton of carbon out together with our suppliers and it caused, basically, the company to mature. And I think we were just slow to mature, but now we’re more of an adult and can make a balanced decision.

Aislin Roth: Well, if you don’t write your own narrative, sometimes someone else will, so, it’s good to see Walmart stepping up to the task at hand. Now, Doug, you talk often about your four core values, Walmart’s purpose, in fact it’s already come up today, but it’s one thing to write your values on a slide and it’s another thing to actually implement them day to day. So how do you do it?

Doug McMillon: Well, you have to actually believe them and live them, respect the individual, acting with integrity, service to the customer, striving for excellence. Those four values are what we want to see practiced in our behavior every day. So, we believe in servant leadership. We’re looking for altruistic people that can put other people first. So, there’s all these little signals and symbols of that, like when we go to visit stores, we park at the back, we grab shopping carts on the way in, pick up trash off the floor, be willing to do what we want anybody else to do. And when they send an email or they reach out, how you respond back to them quickly, in the same day, all those little characteristics, you actually have to do it.

And I joke, I don’t yell, I just don’t, but if I did, it wouldn’t take very long until it was okay for a store manager to do that. And so I’ll have people come interview with me and they’re like, “This sounds like it’s a weird place, you don’t curse.” And I’m like, “Yeah. We don’t. If we did, how long would it take before our associates were allowed to do that in front of customers?” So, the culture that we have has to be the culture you would want a customer to experience on the sales floor. That’s a really good way to think about it. So, you have to actually care about that stuff and be wired that way or you can’t be successful in our company.

Aislin Roth: You set the precedent and then your employees are the heart of what carries out Walmart’s culture. Speaking of employees, last time you were here in 2015, you had just announced a major raise for all starting associates in the US to $9 an hour. Today in California, I believe it’s over $18 an hour. But if we’ve learned one thing here at business school, it’s that higher wages equals higher costs for your customers. So, how do you balance the interests of your two primary stakeholders, higher wages for employees, but lower costs for your customers?

Doug McMillon: Yeah. My best days have been when we’ve been able to raise wages for associates. I love doing that and I want to keep doing that. It’s also important to have low prices. And I am in a very unique situation. I drew an ace as it relates to which company I ended up being the CEO of because of the Walton family and the board of directors that we’ve had throughout my tenure, and they just let me make less money. How many people get that opportunity? The operating income percentage at one point of the company used to be 8%, and Sam Walton did a famous hula dance on Wall Street when the company achieved 8%.

And as we grew internationally and we grew in the super center food business, our operating income percentage went down to 6%. And when I moved into this role, our growth rate was relatively low and we were concerned about negative same-store sales and there was pressure on the top line. And as I went around and talked to our associates about what we needed to do, they gave me the answers, we need to raise wages, we need to put in some more department managers, we need to get consistent schedules, we need to reduce our inventory, we need to get back to everyday low price. They wrote a prescription for it. And it made sense to me and I knew it would work. The only problem is, it was really expensive.

So, my team and I went back to our board of directors, this was in 2014, and we said, “Here’s the formula to win in brick-and-mortar retail here, and we think we need to get the stores moving in terms of growth. And then if we do that, we’ll have some time to go figure out e-commerce and to start growing an e-commerce business.” The board said, “We agree with that plan, but we want you to spend more.” That probably doesn’t happen very often in boardrooms, I wouldn’t guess, not at that scale because we’re talking about billions of dollars. So, they said, “Take two weeks and then come back and have a call with us and tell us how you’re going to be more aggressive with your wage increases.” So, that was fun, until we had to tell Wall Street and then it was less fun.

Some of our investors didn’t like that idea. We eventually quantified what that raise looked like, and there were other components where we invested in our associates and at the same time we lowered prices for customers and we started to invest in e-commerce, and we started to invest in technology. So, there were multiple billion dollar investments early in my tenure in this role that took that operating income percentage from being about six to being between four and four and a half. But we started to get the growth and the plan that the associates gave us did work, and we eventually figured out what we wanted to do with e-commerce, and now the growth rate’s gone back up, we have a more sustainable business model and now we make money from membership, advertising and some other things that flow from that e-commerce investment that causes us to have even more room to invest in associate wages and lower prices, so the business model’s actually changing and that’s caused the value that company to go up. But you couldn’t have done it without long-term support. So, really benefited from that.

Aislin Roth: As you mentioned, you’re operating in a very low margin business. Sears was once the number one retailer in America, then it went bankrupt. Kmart in its heyday in the ’90s was the second largest retailer and the world’s largest discounter, fast-forward to the early two thousands and it’s also gone bankrupt, twice. So, how does Walmart manage to avoid the same fate and stay at number one for over a decade?

Doug McMillon: Well, we may not. We’ve got Amazon and competitors around the world that are coming on and retail’s changing a lot, and that’s cool. I think the punchline answer is change. You’ve got to know what you want to keep the same, and you got to be willing to change everything else. And then the question is how fast can you change? How well can you change and how do you get the people to change? Because you have to change your mindset in some cases, you have to change the way of working. We’ve had to learn things like how design works and how product management works, and I have stolen shamelessly from smaller companies here in the Bay Area as I go and visit and I learn about how you get a use case, and you build a product, and you start to scale it. The same thing’s happening inside of our company, but we had to have different talent, in many cases, we had to have a different mindset and then you got to get after change.

Aislin Roth: Yeah. Change really matters. Well, Walmart today has over 10,000 stores around the world in nearly 20 countries, I believe, you also sell over 2 million items online. So is Walmart, as a company today, primarily a brick and mortar retailer competing with Costco and Safeway, or are you an e-commerce company competing against Amazon?

Doug McMillon: Yeah, in the investor conference we had last week, we said we’re an ‘And’ company, we’re people and tech, we’re stores and e-commerce, we’re innovation and execution. And I really think that that’s the case. We did, I think the last number we reported was something north of $100 billion in e-commerce out of $680. So, as a percent to total, it’s still small. Now, it’s very different by country: in China, already half our businesses is digital, in the rest of the world, it’s more like 20 to 25% depending on the market that we’re in. So, we’re actually all of the above. And figuring out the tech and the way things work to support a supply chain that supports all channels is a more interesting and challenging problem to solve than if you’re just doing one channel. And we’ve really enjoyed figuring that out. And we have some big advantages. We are putting large investments. Our CapEx has really stepped up in the last few years from being around $15 billion a year to being about $25 billion a year with most of the additional dollars going into automated storage and retrieval systems in our supply chain. And we took investors to Lancaster, Texas, last week and we showed them this massive perishable distribution center that is highly automated and is super cool. That supply chain supports both stores and e-commerce as we get things positioned for last mile. So, we have an advantage from the ‘And’ because the supply chain can be leveraged for both.

Aislin Roth: Perhaps I’m presenting you with a false dichotomy. It sounds like Walmart is the ‘And’ company.

Doug McMillon: We are. Our e-commerce assortment, to your point, is really growing. On Walmart.com now, we have hundreds of millions of items that are available, you can find almost anything you want to find at Walmart.

Aislin Roth: Well, whether —

Doug McMillon: Didn’t used to be the case.

Aislin Roth: It’s pretty incredible. We’re lucky. Whether it’s e-commerce or brick-and-mortar stores, a lot of Walmart’s production still happens overseas. So in the midst of rising global uncertainty and higher tariffs, especially with China as we’ve been talking about backstage, how does Walmart maintain its promise to delivering lower prices to customers while managing higher costs across your supply chain?

Doug McMillon: Here in the U.S., more than two thirds of what we sell is made, grown, or assembled here. Some of those items may have parts from other parts of the world, but there’s a big chunk of business that’s being done in the country, and in our other markets, well over 70 percent is sourced in that country, primarily because we’re in the food business in a lot of those markets. So, when it comes to the U.S., that other third comes from China, Mexico, Canada, and about 100 other countries. But China, Mexico, Canada would be at the top of the list. So, we get avocados from Mexico, and we get toys and electronics from China. So, we care a lot about what happens and we don’t want to see our customers pay higher prices. So, we share that in appropriate ways with the administration and members of Congress as we can, so that they know what’s happening in our business and what could happen in our business if things are carried out as proposed.

And then once things settle and they haven’t settled yet completely, then we’ll deal with it and do our very best, whether it’s changing a country of origin or we’ve been talking about grills this week, if you’ve got a grill that’s $250, a stainless steel outdoor cooking grill and you get a tariff on that item, if you pass 100% of the tariff costs on that item through to customers, the price point gets too high, you don’t sell as many, at the end of season, you end up marking it down, you don’t have any profit. So, it may be that we absorb part of the tariff there, but we find other items and we take them up a little bit to manage the total mix of the business. And at Walmart, we have some advantages in that we sell everything from, bananas are actually our number one item, and avocado is one of our top three items. So, we sell a lot of food.

In fact, when I came out yesterday, I mentioned to you we went to the strawberry fields and the blueberry fields here in California and had a great time eating fresh strawberries. So, we sell a lot of stuff and we sell a sweater, and we’ll sell that patio setter grill. So, you’ve got the advantage of mix. And then you’ve got the advantage of mix between stores and e-commerce, and membership income, and advertising income, and fulfillment services, and we monetize our data. So, our business model improvements give us a little more room to move as well. So, part of the challenge that we have is to manage this better than anybody else, to try and keep prices as low as possible for customers, figuring out how to move all the variables that we’ve got and we’ve got a lot of variables to work with, so that we do a better job helping people through this period of time than anyone, and that’s what we’ll focus on.

Aislin Roth: Well, following up on that, just to dig a little bit deeper, Walmart has reportedly asked suppliers to help absorb some of these higher costs. So, how are you thinking about the impact to your long-term relationships with international suppliers and Walmart’s global sourcing strategy more broadly?

Doug McMillon: Yeah, that really does matter. And most of my career was spent in merchandising, buying items, which is a total blast. I’ve managed everything from fishing tackle to ladies wear to infant and toddler stuff, and sitting down with a supplier to figure out what should change about that item? How do we make it better? How do we make the package better? What can you do to get costs out that are just waste? How do we manage this relationship? Is a blast. And a lot of those companies, the vast majority of them I think, we’ve done business with for decades and a lot of the salespeople we know and we have relationships. So, this is not new. And so what we’ll do is sit down and say, “Okay. This is the situation we’ve got. How are we going to work together to solve it?”

And on the other end of this, through the process, and on the other end of it, we want you to be healthy, we want you to invest in new items, we want you to be able to invest in your supply chain, so you’ve got to manage your margins. We think we can take a little shorter margin here. We’ve got this new item that we’re going to do something differently with over here. So, back to that mixed management conversation, that’s how it will work with suppliers. So, of course, when we sit down with any supplier, we’ll be asking, how can we get a better value for our customers? And in a situation where there’s a tariff involved in that country, we won’t just talk about the tariff, we’ll talk about all the costs. And we still find stuff. We’ve got, in the average Walmart Supercenter, there are 120,000 items and online now there are hundreds of millions of items and a lot of those are first-party inventory items that we own.

There are so many things we still find that are just wasteful that we can take out that don’t really matter to the customer. And figuring out things like how to cube a trailer out and weight a trailer out perfectly so the cost is lower. There’s lots of stuff you can do to be creative, and we’re blessed to have a bunch of experienced merchants who know how to do that. So, when I get nervous about this stuff, I’ll go find the buyer that’s responsible for a category and say, “So, how are we going to navigate this one?” And almost always, they have really good answers on what they’re doing to try and solve a problem creatively and that helps me sleep at night.

Aislin Roth: That’s a good partnership approach, you’re both facing the same problems at the end of the day.

Doug McMillon: We’ll all be here on the other side and the way we treat them through this process will matter.

Aislin Roth: Well, we’ve talked about a lot today and so many things have defined Walmart over the past decade, whether that’s e-commerce, automation, global expansion. So, what’s next for Walmart?

Doug McMillon: Yeah so, one of the things I’m really excited about is saving people even more time. And I, for some reason, always think about Heinz ketchup. I don’t know why, but my wife and I have always had Heinz ketchup in our refrigerator. Maybe that’s why when I open up the refrigerator, there’s always a bottle of Heinz. And when we got married, it was a glass bottle and then it became a plastic bottle, and then we had children and it got bigger and then it flipped upside down, and then my children left to go to school and the bottle got smaller. When we die, you go to my refrigerator, there’ll be Heinz ketchup in our refrigerator. And so what I think about is how many times did Shelley or I have to go buy Heinz ketchup and remember to buy Heinz ketchup and eggs, and milk, and lettuce, and all the things we have all the time.

I think all of those decisions we should just be able to take off the shoulders of our customers. And we’ve been doing what we call Walmart in-home delivery for a while now, a few years, where we deliver all the way into your refrigerator in the kitchen or into a garage, a lot of U.S. households have a refrigerator in their garage, and we have a one-time code where you can go in and put the goods away. That’s what we do at my house. So, when we’re traveling, we place our order in our basket and it’s there when we get home, which is super convenient.

If you put that together with data, I had someone send me a note this week where they had a perfect order where Walmart’s algorithms identified what items they needed and how much they needed and recommended an entire basket for them. And this customer didn’t change a single thing in that basket, they just hit yes, and we delivered it to their doorstep.

So, we saved them a lot of time, which they can use to do whatever they want to do with their family or work out or whatever they want to do. Money matters and it always will, but so does time. And so I think we can find lots of ways to save people more time and make shopping more delightful. And you look at what’s happening today with short form video. I was in China a few months ago and our associates were doing live stream video from the sales floor. We were walking around the store and I looked down this aisle and there are these two people that are on camera with bright lights pitching an item, which is a big deal and has been a big deal in China for a long time now. I’m like, “Well, who are those people?” Those are our associates. They run that department, but they just flip their camera on and they’re selling stuff online. That’s pretty cool.

So, I think short form video, live streaming, social commerce is really growing. We do billions of dollars of GMV through social commerce, through social media platforms today, where we fulfill the order and show the item in a way that makes sense for that platform. That’s going to keep growing. So, I think we’ll get more entertaining, but we’ll also just save people a lot of time.

Aislin Roth: You’re not just saving customers money anymore, you’re saving them time.

Doug McMillon: Yeah.

Aislin Roth: There’s so much more we could talk about when it comes to Walmart, but I want to make sure we save some time to talk about you and your leadership journey.

Doug McMillon: We can skip that part.

Aislin Roth: You just have a couple questions you have to bear with me through. You’re almost there. Well, if we take a step back, a lot of us on the outside, we look at your career and it just seems like one long upward ladder, but you’ve spoken openly about some times that you’ve failed from launching private label baby formula —

Doug McMillon: We could really skip this part then. Seriously.

Aislin Roth: I did my research. I found one more. There was chili lime chips that you were advertising [inaudible].

Doug McMillon: Oh, yeah. That was bad. That was very bad.

Aislin Roth: So, how do you persevere in the face of failures like these?

Doug McMillon: Yeah. So, those two examples, and there are many others of where I’ve made mistakes. Just quickly, the private brand formula thing was, we, at Walmart, were losing $100 million a year, this is many years ago, losing $100 million a year selling infant formula. The way that works here in the U.S., there are WIC payments and the branded suppliers bid for the WIC payments by state, drives costs up, a can of powder was costing something like $25 at the time. So, customers weren’t happy, the system wasn’t really working, and a few of us decided it’d be brilliant to launch a private brand formula. Make a long story short, we branded it Parents’ Choice and we shipped it to every Walmart store in the country and it failed miserably. Moms didn’t trust it. We didn’t think about the detail that was needed with doctors and visiting them, and explaining the product.

The product was great quality and we could prove that, and it came from a very reputable supplier that makes infant formula. But we had a communication problem and we stuck with it. And one Walmart regional operator that had Chicago and some other surrounding markets, who was losing the most on infant formula came to me and said, “Man, you’re getting killed here, let me help you.” And we partnered together to figure out how to get the word out on the formula and eventually took off and it was successful, ultimately. And then the chip thing, it was just a big mistake. I was a chip buyer and I got really excited about lime and chili flavored Tostitos. In the early ’90s, that was a new thing, and I wanted to put it on the front page of our print ad, and there were 80 million copies of that printed at the time. It was our number one advertising vehicle back in the early ’90s.

And I failed to pick up on the fact that Frito-Lay was only launching it east of the Mississippi River. Yeah. I see your face. That was my face too. That was a problem. So, when that ad hit, every store manager west of the Mississippi called my office to say, “What have you done and where are my chips?” I about got killed over that one and making an error on the front page of the tab was just such a big mistake that my friends in the office wouldn’t talk to me. I was shunned. I would walk down the hallway and people would be looking at their shoestrings and the floor, and it was brutal. Shelley and I were expecting our first child and I was like, “Dude, it’s over.” I went home and told her, “My whole career is over, over chips.”

Aislin Roth: Who would’ve thought.

Doug McMillon: The lesson, the reason I tell you this story is because there was one person, his name is J.R. And J.R. did not work in my area, he was an officer of the company. He knew me because I’d worked for him for a little while before and after a few days of not being able to stop crying, he called me over to his desk and said, “You’re better than that. Don’t ever make that mistake again, but get your head up and get back to work.” Kind of dusted me off, put me back in the game and I’ve never forgotten that. Because he was the only one that did. So, forgiveness, showing somebody a little grace. I think the lesson in my career, and I’ve tried to remember that story and help other people was when they make a mistake, but they’re really talented and they just need somebody to give them a little encouragement, try to be the person that helps them get up.

Aislin Roth: It’s a really good reminder for all of us here, and hopefully we’re never in the same position with chips, in particular, but I might relate to other aspects. Well, Doug, you’ve had the privilege of working with several incredible leaders, mentors such as J.R. across your career at Walmart, and you also the privilege of working with Sam Walton for a little bit and getting to know his family. So, what are some advice that they’ve given you?

Doug McMillon: That family, all the way back to Sam and Helen, really smart, intelligent, competitive, well-intentioned people that think about the environment that, think about our associates. We just had a Walton family meeting. We’re a public company. We have a board with a great set of independent directors, but we also have a family which has been advantageous for us that we meet with periodically. And this week we spent some time with them. We have a couple of meetings a year, and they just want to talk about how we make our food healthier. So our team that managed our food business came in and talked about what we’ve done to take sugar and salt out where we can, what other things we’re doing, how we can communicate better with customers, how we keep prices low on produce, things like that, with them pressure testing our thinking and encouraging us to do a better job with healthy food.

I’ve learned a ton. My first Saturday morning meeting, Sam was hosting the meeting and I was presenting an item that, in a form of hazing, the other buyers had caused me to have to present on my first Saturday with Sam Walton there a lower price on an item. So, I didn’t even know how to buy at that time, it was fishing tackle. And one of the buyers said, “Well, just call the buyers up and tell them you’re a new buyer and you need a new buyer discount.” So, you’d call suppliers and say, “Hi, my name’s Doug. I just got here. I’m a young guy. I’m might be here for a long time and I’d sure like to have a lower price.” And the suppliers said, “Okay,” sometimes. So, we got this lower price on Baitmate. We go to a Saturday morning meeting and I get out nervously with my voice shaking, everything I knew about the Baitmate item with Sam holding the microphone.

And when I was done, Sam said, “That’s all well and good son. But what makes you think fish can smell?” Because Baitmate’s an item you spray on a hard lure and it’s supposed to make the fish think it’s a real lure. I didn’t know the answer to the fish smell question, so I just went and sat down. But Sam, he alleviated this moment where there’s this young person that’s nervous and had fun. It was Saturday morning, we were working hard, but we’re also having a good time and laughing and we laugh a lot at work, and you should, life’s too short to not have a good time. And that’s one of the things I learned from Sam that day.

Aislin Roth: That really matters. And who would’ve thought you’d start your career selling fish tackle spray to all the way here today? Well, Doug, you’ve also shared some advice of your own, telling students at a recent commencement speech to find a career that does not feel like work. Well, that sounds like a pretty great job to me, and I’m sure to many of us here. So, what does that mean to you and how do you know when you’ve found it?

Doug McMillon: I think culture matters a lot. Whether you’re joining a company or you’re starting one, what kind of atmosphere do you want to have? And then is the work meaningful? Does it make a difference? And I think for me, if you find those two things and then combined with competition and a scoreboard, I’m good. And so I was fortunate enough to find that. And my advice would be, if you haven’t found that or you find yourself in a situation where you’re not having a good time, change something, go do something else.

Aislin Roth: So we’re here in Silicon Valley where it can often feel like tech is the only option, but sitting here with you, having this conversation, definitely calls that into question. So, why is this something else that we should consider?

Doug McMillon: The world is bigger than just here. But this is a cool place. It’s been great for us to be able to experience what’s happening around the world, here in the U.S. and what’s happening here. And I can understand, given where you live and what gets covered and what school you’re going to, how it might feel like it’s a tech-centric world, but you’d be mistaken to not realize that every company is a tech company at this point. We work with AI in a different way, but we are really good when it comes to technology these days. The work we’re doing with physical robotics, what we’re doing with everything from drones to the automated storage and retrieval systems I was talking about earlier, how last mile’s going to work, what’s happening in our stores, what’s happening with our data.

We just grand opened a new facility here in Sunnyvale today where we’ll have a few thousand people. We’ve had an office here for 25 years, and this is our latest version of what this office looks like with a great set of technologists that will help power the company. So, again, culture and purpose. What’s the difference you’re making in the world? Because you’re going to use tech everywhere and you can create value, you can create market cap acceleration anywhere. And everybody that I talk to regardless industry is figuring out how to deploy AI and make the most of it, for example.

Aislin Roth: It’s a good reminder to get out of the bubble more often. Well, Doug, I have one last question that we’re asking all of our speakers. Our theme at View From The Top this year is leaving your mark. So, Doug, how would you like to be remembered?

Doug McMillon: So, this is near the end? We’re wrapping this baby up.

Aislin Roth: You’re almost there.

Doug McMillon: I mentioned earlier, I think my job and the job of people like me that are given the opportunity to lead some of these great companies is to change the company in a way that it’s relevant for the future. So, the only thing I really think about is how are we making decisions and getting things done such that Walmart is succeeding and creating value 50 years from now?

You did a good job earlier of talking about how retailers come and go. I track what’s happening with retail and I love retail history, and I’ve got this old Sears catalog in my office that’s from the days when Sears was using the railroads and the catalog to distribute merchandise. It was basically a marketplace. And it has everything in it from sinks to wagons to shotguns to everything, I didn’t find a bride in it, but everything else was, they were dominant and now they’re gone.

So, what did they not change or what did they change that caused them to fail? So, I think my job and the job of the leaders here today is to simply make decisions that are lasting decisions that make things better.

Aislin Roth: I hear you have a list on your phone of the top five retailers and you update it every year.

Doug McMillon: Top 10 by country over the years, and you can watch them climb up and you can watch them fall.

Aislin Roth: And you stay at the top.

Doug McMillon: So far.

Aislin Roth: We’ll be cheering on Walmart on the sidelines. I think that’s all for me for now, but we’d love to open it up to audience Q&A.

Audience: Doug, thank you for being here. My name is Jack Stone. I’m an MBA2. Curious to hear with some of Walmart’s more exciting technological innovations. You’re doing a lot, sounds like, on the AI robotics front. How you’re balancing that more Silicon Valley, fast, disruptive style of innovation with the core business that’s more large, conservative, maybe slower to adapt?

Doug McMillon: Yeah. Great question. For a while, we ran some of our businesses independently. In the U.S., for example, we ran our stores business separate from e-commerce because of Clay Christensen’s Innovator’s Dilemma point. The older, more profitable business did things that harmed the money-losing younger, faster growing business. After doing that for a few years, we were able to get enough of our leaders to really understand the value of e-commerce and how to put it together and learning things like how design works and product management, and how to work towards solving use cases instead of in the old silos. Before that, Walmart was a bit militaristic. We had, just like the U.S. military has the Navy and the Army, and different branches, we had logistics and store operations, and merchandising, and they all sub-optimized within their area of responsibility, when the ultimate optimization we should be doing was for customers.

So, we had to take some of the ways of working of a digital startup and implement them in the company, hire product managers, hire designers, learn how to work differently, and we’re still trying to get better and better at that at scale, which is harder, I think, when you have so many people involved. But we had to really change our way of thinking and our way of working. And I think now we’re to the point where we’re not trying to convince anybody that e-commerce is important, we’re way past that and we’re more forward-looking, building like a digital shopping agent or assistant named Sparky that we’re about to launch soon. There’s just more of a tech bias.

Audience: My name is Kovan. I’m an MBA1. I actually come from a Walmart family. My mom works at Walmart, aunts, everybody, they’re refugees. And it was like the their first job there. So, when I told my mom you were coming, she said I have to thank you. So, thank you, Doug.

Doug McMillon: That’s cool. I see that a lot and I’m really happy to hear that about your family.

Audience: One question I had for you was around the pandemic. So, that was a really tough time for Walmart and they played a major role. So, what was your experience during the pandemic and what are some of the key learnings that you took away from that that you’re using today?

Doug McMillon: Yeah. Let’s not do that again, okay? That was not fun. That was so hard. We have stores in Wuhan. So, in January of 2020, we started experiencing what it was like, and I didn’t know in January what this was going to look like by the time we got to March, but things moved very quickly during that year. And I’m sure we all have our stories about the negative aspects of that. I’m really proud of how our team navigated it. We played a role in the countries that we operate in around the world, of keeping the supply chain going, ultimately doing COVID testing, ultimately doing immunizations. And I was traveling around the United States every week during 2020 and 2021 watching our people, our pharmacists, and others, do good work. And so I’m really grateful for that.

The lesson that I took away was around speed of decision making. Every company has a rhythm, ours has a rhythm. There are things we do each week. There are things we do each month. There are things we do each quarter and each year. That period of time required great acceleration. And normally I meet with my direct reports individually once a month. I see them daily, some of them. And then we come together one week a month for a series of meetings. The pandemic required us to talk to each other every day. So, we were jumping on Zoom first thing every morning, having a sync up, going around talking about what had happened, what needs to happen, who owns which decision. And our decision making speed went up dramatically. And I learned that I could trust people to make high quality decisions even more than I had been.

And there were many times when we were debating in the early days, the roll of masks or the way to keep people safe with plexiglass being put up around every cashier stand and every pharmacy we had in every store across the country, which was when we first were told you have to put plexiglass up at every location. We said we have 4,700 stores, we have all these cash registers. How do you even get enough plexiglass to do that? Somehow our team got that done in just a few weeks. When we were debating masks, we finally said, “Hey, it looks like the U.S. is actually going to decide to use masks.” One of my direct reports, John Furner said, “John, we need to get a bunch of masks.” He said, “I’m glad you feel that way because I bought 200 million of them a month ago and they’re almost here.”

So, people were making high quality decisions and they were making them fast. And so we would find ourselves in those moments saying, “I don’t know the answer either, but you own the decision and tomorrow tell us what you decided.” And so that quality decision making, moving fast was so different. We all got exhausted as we went through 2021, 2022, and there was this period where I saw us needing to recover. But on the other side of it, I’m certain we make faster decisions and delegate more on the other side of the pandemic than we did before.

Audience: Thank you again, Doug, for speaking with us today. The question that I have is that during the integration of the Jet.com merger, the press was really unfriendly to the company. You guys pushed through and you did build a juggernaut in Walmart e-commerce which today is a dominant player. How did you personally get through that time? How did you continue to lead the team even when there were those headwinds? Because now they’ve turned into tailwinds with people supporting it, but how did you rally the troops to push through? It took a couple of years.

Doug McMillon: Yeah. It is helpful to be comfortable with criticism. If you can develop that, I would encourage you to do so because it comes. In this case, it was so clear that our customers wanted e-commerce. It’s been a no-brainer for a long time. And I had the benefit of being responsible for the book category and toys, and electronics as a merchant in 2000, 2001, 2002. I was watching what was happening with e-commerce and got really excited about it. And raised my hand at various times in my career wanting to get involved in e-commerce and sometimes the team would say, “That’s cute, but go back and do this other thing and further your development in this area and we’ll come back around to it.” But I had so much conviction about our opportunity, and part of the challenge for us was the difference between food and general merchandise.

And we had a business in the U.K., which we’ve since sold in Asda, where we were doing food home delivery, ordered on a website. And I saw the customer experience there and felt like, from an e-commerce point of view, we could win with food and consumables and we could work to catch up in general merchandise and work to catch up in the marketplace and that’s what we’re trying to do. And I’m so glad that we bought Jet, and Mark Lore and the team that came with him did a great job, but it was bumpy for a while and it took us a while to figure things out, but we just didn’t quit.

Audience: Hi, Doug. I’m Monisha. I actually worked at Walmart on the e-commerce site store and pick up today functionality back in 2010 for a couple of years. Now, I’m also at another retail company and we are heading into agentic AI and agentic AI workspace or workflow, what I was reading. Where do you see this heading in the future? How much of automation will be incorporated in the retail space, especially in the e-commerce space?

Doug McMillon: Yeah. Do you want to come back and help us do it?

Audience: I’m doing it at another place now, a beauty giant.

Doug McMillon: I heard that. Yeah. Agents are going to be very effective throughout our company. We are building Agentic AI into the shopping experience with this character that I called Sparky earlier. Sparky is a smiley face, which has been part of our history. And it’s present today across a number of categories and a large number of people are using it. It’s not fully scaled yet, but it’s learning and getting smarter every day. And we built an agent called Wally that helps our merchants make better decisions. And we will be continuing, there’s an architecture that we were reviewing this morning, helping us decide where we’re going to deploy agentic AI. So, it’ll be very much a part of our work every day and it’s going to be exciting to see it come to fruition.

Aislin Roth: Well, it’s great to see so many former Walmart employees in the crowd and hopefully some future ones as well.

Doug McMillon: Yes. I agree with that last part, especially.

Aislin Roth: You gotta recruit them back, we need you out in the Bay Area more. But Doug, to wrap up, we do have one fun rapid-fire style section left. This time for everyone in the audience. It’s going to be true or false style. Are you ready?

Doug McMillon: No.

Aislin Roth: True or false, on your first day of work at Walmart, you rear-ended your boss’s car?

Doug McMillon: You did do your homework. Yeah. That’s true. My car didn’t have a radio or air conditioning, and it was summertime. I had my window rolled down and my boombox cranking Bryan Adams. And I thought my boss had gone through a stop sign and he hadn’t. And I nailed him. And he got out of his car and he came back and he looked at me and he said, “McMillon, you’re not very smart, are you?” And I said, “Apparently not.” And he didn’t fire me, thank God.

Aislin Roth: I think he’d be amazed to see where you are today.

Doug McMillon: Yeah. We still talk.

Aislin Roth: Doug, true or false, you only need four hours of sleep a night?

Doug McMillon: Oh, that’s false. No, I would like to have eight. I don’t always get it, but I like to sleep.

Aislin Roth: True or false, you do a great impression of Chewbacca from Star Wars?

Doug McMillon: Great’s disputable, but yes, I do. I do Scooby-Doo and Chewbacca. That’s the limitation of my impersonation.

Aislin Roth: There is a video somewhere on the internet for anyone who’s curious.

Doug McMillon: I’m not doing that here.

Aislin Roth: And finally, Doug, we started off this conversation talking about your high school basketball career. So true or false, you were once a professional basketball player in the NBA.

Doug McMillon: That’s false. Wannabe. Yeah. No, that didn’t come close to happening.

Aislin Roth: I hear you play every Sunday though.

Doug McMillon: Yes. There’s a great tradition in our family that’s more than 40 years old of playing basketball on Sunday afternoons. And my son runs the game these days and I come and try to keep up with guys that are 30.

Aislin Roth: It’s like intramural versus college sports. It still counts. Well, Doug, this has been so great. I hope to see you back in another 10 years to keep the tradition going.

Doug McMillon: Thank you all for the invitation.

Michael McDowell:  So I have to ask: How did you find the story about Doug rear-ending his boss’s car on his first day at Walmart?

Aislin Roth: I spent a lot of time listening to prior interviews that Doug has done. I was traveling over spring break. I had hours on a bus ride and I must have listened to over 20 hours of prior Doug interviews.

Michael McDowell: Wow.

Aislin Roth: So this was a story he shared in one of them, probably earlier on in his career journey and something we just had to mention. We all make mistakes and you can go from rear-ending your boss’s car to CEO. So, anything is possible.

Michael McDowell: That may be unique in the business world.

Aislin Roth: Maybe. It’s not how I want my first day to go.

Michael McDowell: A lot of leaders talk about failure, but Doug actually walked us through two mistakes he’s made. I mean, yeah, say a little bit about that. That’s just really unusual.

Aislin Roth: Yeah, those were some funny, funny stories. I think too often leaders tell us that it’s okay to fail, but they don’t actually show us. And so, what Doug did here was give two examples of material failures that he had.

Michael McDowell: Real business things, yeah.

Aislin Roth: Real business things. I mean, and with a meaningful business impact.

Michael McDowell: Mm-hmm.

Aislin Roth: And he showed how people gave him grace, how he learned from those. He didn’t repeat the same mistakes, uh, but he did come back stronger. And I think that kind of openness gives permission to others around you to own up to their mistakes instead of hiding them. And giving everyone a second chance to come back. So that was really motivating for a lot of us to not be so worried about making that one mistake but instead figuring out what can I learn so that I don’t make that mistake again.

Michael McDowell: And how do I move forward.

Aislin Roth: And how do I move forward? Exactly.

Michael McDowell: On the other hand, Doug has been incredibly successful, especially as Walmart has navigated an existential shift in retail.

Aislin Roth: Mm-hmm.

Michael McDowell: If customers don’t want stores, we won’t have stores. I mean, what do you say about someone who’s moving one of the world’s largest companies through really tumultuous times?

Aislin Roth: Doug described at Walmart. The one thing that’s constant is change. And the fact that your entire employee base knows that and that he’s even thinking of a world where stores might not exist, you need to think more radically about change, was really powerful. And so Walmart’s diversifying into several new business verticals or trying different things. I think he described Walmart as the “and” company today.

Michael McDowell: Yeah.

Aislin Roth: So trying to do a little bit of both. We’ll see where that takes them. But I really do think Doug is thinking about this future and how much change might need to happen. He’s trying to embrace ideas from different Silicon Valley startups into a big box retailer. So it’s a really interesting case study into how do some of these big companies still move at the pace of much more smaller agile businesses. And that’s tough when you’re a behemoth the size of Walmart, the largest private employer in the U.S. So it’s really interesting to see how he thinks about carving out those opportunities for growth.

Michael McDowell: You’ve gotta know what you wanna keep the same and you gotta be willing to change everything else.

Aislin Roth: Everything. And the list that stays the same can be pretty short.

Michael McDowell: Just shifting back to kind of leadership lessons before we land the plane, it’s helpful to be comfortable with criticism. If you can develop that, I’d encourage you to do so. What do you think?

Aislin Roth: It’s a really important point. I think when you get to a point as a leader, people stop telling you the truth. They, they don’t want to upset you. They don’t want to be in your bad books. And so, all of a sudden we’re in this little black box and you’re not actually aware of what’s going on on the ground. So I think the more open you make yourself to receiving feedback, to hearing things, to acting on those changes, then the more willing those around you will be to, to give that feedback and share that. And that’s just critical to learning, to staying relevant. And Doug seems very open to those things. He talked a lot about how he’s grown as a leader, the pace of decision making, from when he joined to today. So I think he takes that criticism, not just in stride, but really sees it as a learning opportunity, which is something we can all do as we strive to keep getting better.

Michael McDowell: Life’s too short to not have a good time.

Aislin Roth: It really is.

Michael McDowell: What does it mean to hear that from a leader like the CEO of Walmart?

Aislin Roth: I think Doug tried to remind us that there’s more to life than just your job. And while he may have a really important job, he also has a family that’s really special to him. His faith is very important to him, and we shouldn’t forget about those things in the grand scheme of life, all of a sudden it’ll have passed you by, and he’s been CEO for 10 years. And so I think it was a really good reminder for all of us, especially as students, as we’re about to graduate, to think not only about what’s the next step in our careers, but, how does that fit into the next step in our life and where we wanna be and who we spend our time with? It’s a really good reminder to think of it more big picture.

Michael McDowell: To remember to live.

Aislin Roth: To remember to live.

Michael McDowell: Well, Aislin, thank you so much.

Aislin Roth: Thank you.

Aislin Roth: You’ve been listening to View From The Top: The Podcast, a production of Stanford Graduate School of Business. This interview was conducted by me, Aislin Roth, of the MBA class of 2025.

Michael McDowell is our managing producer and Michael Reilly edited and mixed this episode. Special thanks to Liz Walker.

View From The Top is the dean’s premier speaker series. It was started in 1978 and is supported in part by the F. Kirk Brennan Speaker Series Fund.

You can find more episodes of View From The Top on our website, gsb.stanford.edu/business-podcasts. Don’t forget to rate and subscribe and follow us on social media @stanfordgsb. See you next time on View From The Top.