#345: Doug McMillon — CEO of Walmart

Optimal minimal. At this altitude, I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question? Now, what is an appropriate time? I'm a cybernetic organism living this year over a metal endoskeleton. Tim,

This episode of the Tim Ferriss Show is brought to you by LinkedIn. The right hire can make a huge impact on your business. The wrong hire can crater your business. And I have seen example after example from thousands of my readers at a minimum where they've told me stories of how finding the right person at the right time and in some cases not even asking what should I do but asking who should I find because that person can help me determine what exactly to do more intelligently. And I've had a chance to hire two such people in the last year and that has just made my business take a quantum leap forward and my complexity in my personal and business life get cut dramatically and this type of simplification cannot be overvalued. We think a lot about hiring and I think a lot about hiring and it is a skill that I've had to learn. It is important to find the right person but where do you find that person? You can post a job on a job board and hope that that right person finds your job, that they are on the internet happening to scan something here and there and then find you. But think about it, how often do you hang out on job boards? The answer is probably not very often. So don't leave finding someone great to chance when you can post your job exactly where people go every day to make connections, grow in their careers, and discover job opportunities. That is LinkedIn. Most LinkedIn members haven't recently visited the top job boards, but nine out of 10 members are open to new opportunities. And with 70% of the US workforce on LinkedIn, posting there is the best way to get your job opportunity in front of more of the right people. And you can be very, very highly targeted and specific people who are qualified for the role you have and ready for something new. This is where you find them. It's the best way to find that person, that key person who will help you grow your business. And this is why a new hire is made every 10 seconds using LinkedIn. That's bonkers. Every 10 seconds. So head to linkedin.com/tim and get $50 off your first job post. That's linkedin.com/tim to get $50 off your first job post. Terms and conditions do apply.

Well, hello boys and girls. This is Tim Ferriss. Welcome to another episode of the Tim Ferriss Show. I am recording out in nature because we should all get out in nature more often. And my guest this episode is Doug McMillan, president and CEO of Walmart. That is a big company. And a lot of people in Silicon Valley and elsewhere talk about Walmart as a big company, but they don't really look into the details. And I'm going to give you some facts and figures that will blow your mind in a moment. But how did this come to be? Well, I want to thank Doug and his entire team for helping to make it happen. I visited the Heartlands Summit in Bentonville, Arkansas. And I would recommend checking it out, the heartlandsummit.org, which is about, of course, making us think about more than just the coasts. And we are strongest when we're most connected to each other. And the gaps that we experience in the US, inequality and disconnection related to education, health, income, skill gaps and so on will not be solved just by California and New York. So, it was a real fantastic experience to spend time in Bentonville with people from all across the US at the Crystal Bridges Museum of American Art, which was the venue. And this is absolutely mindblowing, jaw-dropping as a location. I encourage everybody to check it out. crystalbridges.org. And let's jump into Walmart first and Doug second. So, Walmart, here are some stats. In fiscal year 2018, Walmart registered approximately 500 billion in revenue, which is five billion more than Belgium's GDP. And there are many other countries, of course, I think Austria among them, that are dwarfed by Walmart. If Walmart were a country, it would be the 25th largest economy in the world. Walmart serves 265 million customers a week in 27 countries and across more than 11,000 stores. And of course, online is growing rapidly from an e-commerce standpoint. They have 2.2 roughly million associates, that's employees worldwide, which means if Walmart were an army, it would have the second largest army in the world behind China, just to give you an idea. So greater than San Francisco, Denver, and other cities combined and close to the population of Houston. 75% of their store management team started as hourly associates like stockers, cashiers, cart pushers, and those managers make an average of 170K per year. Walmart files thousands of patents a year in categories ranging from last mile delivery to biometrics and augmented reality. We talk about some of the technology. They have scaled grocery pickup, that is, you order on a mobile device and get groceries loaded into your car from nothing four years ago to more than 2,000 locations today and will serve 70% of the population by the end of the year. How is that possible? Well, 90% of Americans live within 10 miles of a Walmart and they will offer grocery delivery for 40% of the US population by year end. It's really wild how big and the scope of which the breadth of which this company operates. And last fact, Sam Walton started Walmart with one small 5 and 10 store in rural Bentonville, Arkansas in the 50s and grew the company to be fortune number one. We hear about Fortune 100 companies, Fortune number one. And I spent time in that initial store, that very first original store, which is amazing. And I'm going to put some photographs up of some of the memorabilia and so on, which is quite frankly really inspiring. And I'm not getting paid to say that. It's just amazing how incredibly large this company has become from such humble beginnings. So to Doug, Doug McMillan, president and CEO of Walmart. Back in '84, Doug started out as an hourly summer associate in Walmart distribution center. And in 1990 while pursuing his MBA, he rejoined the company as an assistant manager in Tulsa, Oklahoma Walmart store before moving to merchandising as a buyer trainee. And we talk a lot about his training as a buyer, very important function within this entire organization. He worked his way up and from 2005 to 2009 he served as president and CEO of Sam's Club owned and operated by Walmart with sales of more than 46 billion annually during his tenure. From February of '09 to February of '14, Doug served as president and CEO of Walmart International, a very fast growing segment of Walmart's overall operations, and he has served on the board of directors for Walmart since 2013, and is currently the chair of the executive and global compensation committees. In addition, he serves on the board of directors of the Consumer Goods Forum, the US China Business Council, and Crystal Bridges Museum of American Art. Once again, check out crystal bridges. It is incredible. crystalbridges.org. Or back to the bio. He also serves on the executive committee of the business roundtable and the advisory board of the Tsinghua University School of Economics and Management in Beijing, China. Doug really came to the table. He does not normally do long interviews like this at all and he was very willing to dance the dance and go places that he hasn't gone before. I really enjoyed it and plan to get back to Arkansas to explore the very least all the mountain biking trails. You guys can do a little Google search on that and see what pops up. But without further ado, please enjoy this very wide-ranging conversation with Doug McMillan.

Is that your fan group over here?

So, I think we should just jump right into this. What a beautiful location. This is my first time in Bentonville and I've been absolutely surprised by how tremendous everything is here. I was walking around all last night. I've never spent any time in Arkansas. So, first of all, thank you for welcoming me here. And I know we have a limited set of time to chat on stage here today. So,

Yeah. So, we're edging in from different sides. So, I guess maybe you do shorter. Usually, I do two to 17 hours. So, we'll meet in the middle on this one. And I thought we could just jump right into it with a very important question, which is, can you tell me about the bait mate story? And I do not know the answer to this.

How did you respond to that?

Were there any other particular approaches or techniques or types of training that you received as a buyer that come to mind? Because I don't know the first thing certainly about buyer training, but that would seem to be a very important component of what Walmart does. Certainly, it's a big piece of it.

You seem to be from what I've observed also in Facebook posts, don't worry. A voracious reader and I've noticed a number of books like Team of Teams by General Stanley McChrystal that was from I think your 2016 recap where you took a photograph of books that have had a big impact on your thinking that year. Are there any books that you received from people that have had a big impact on you or that you have given out more than once to people for any reason?

The Everything Store.

Why do you give that book out?

How do you pick books? Because I think everyone here, whether it's a stack of books to the knee or just considering all the books their friends might recommend or that they might see recommended on social media, might feel a paradox of choice stress about what to read and you have a lot on your plate. You have a lot of responsibilities. If you think back say in the last year to anything you've read, doesn't have to be the last year, but how did you find that book or how did you select that book as something worthy of your time?

I did come across a mention of virtual reality in training employees or associates, maybe even executives, I don't know. Is that currently underway or is that something planned? And could you just describe that because I was not aware of that?

That's incredible. So I want to talk a little bit about your personal practices because you have of course many responsibilities to other people but I would imagine at some point you have to put on your oxygen mask first before helping others and keep yourself focused which you clearly are. In the Walmart museum last night which I found endlessly fascinating, I expected to find it interesting but I really found it fascinating. I fixated on Sam Walton's keychain next to his red pickup and there's a gigantic metal plate about five times the size of say a nail file in huge font that says 'Go for it.' I was just imagining in my mind how he might have referred to that at different points making different decisions. Do you have any reminders built into your life or any quotes that you think of often that might in some way resemble that?

If that works, let me know.

Now I had read somewhere, well let me backtrack. You are clearly very curious and I think to maintain that level of curiosity which is necessary for the business certainly, you need to sustain a level of humility and there are different ways to do that. So a friend of mine who's been on my podcast, Alexis Ohanian, who's the co-founder of Reddit, at one point was told by a Yahoo exec very early on 'You are a rounding error' and so he put that up on the wall for his entire team to see which ended up working out pretty well. I had read, and this may not be true so please correct me, not everything on the internet turns out to be true, I found out recently that on your phone at least at some point this was in an interview, you had the top 10 retailers I want to say from the last five decades on your phone. Can you explain why that was or why that is?

So openness to change is a prerequisite to then initiating change, but a lot of people don't get to that second part because change can be really scary. Would you mind talking about any particular scary decision for you and walk us through how you thought about it as you were going through it? And that could be a decision. It could just be a difficult or dark moment for you. Because what I'd like to do whenever I have these types of conversations is to humanize the person I'm talking to so that people who are listening don't think that, and maybe this is the case, but every time you've stepped up to bat you've hit a home run because that can be the impression that some people come away with otherwise. So could you walk us through a difficult time, a difficult choice and how you experienced that?

Well, yeah. I mean there are a lot of them, but I guess one of the themes that comes to mind is acquisitions. These are not small decisions to acquire a company, big or small. There are founders, Andy Dunn sitting on the front row. Andy founded Bonobos. He's got a baby and if he wants to put it in the family, that's huge risk for him and I don't want to let him down. Then you got Flipkart. We invested and spent $16 billion to buy 77% of a company that loses a lot of money. That sounds brilliant, doesn't it? And before that, we did the board and management of Jet.com and Jet.com was like a billion dollar run rate and lost money and still does. These decisions we believe are necessary for a variety of reasons, which we can talk about if you want to, but once you do it, you take on those losses, you take on those people and responsibilities, and you've got to execute in a way that makes that a really good decision. And boy, we fretted over those. And we're moving faster now. We're taking more risk. But that's an area where you have a lot of self-doubt. You have a meeting and you hear about the strategy and you think, 'Yeah, we got to do this.' And then you go home that night and you're about to go to sleep and you think, 'I can't do that.' And then you get up the next morning and you go back through it. And we just iterate to a point where finally you got to make a decision and go for it.

How do you navigate that? Because I think a lot of people hem and haw, go back and forth on potentially big decisions. What do you say to yourself or what do you ask yourself or who do you ask questions to try to gain clarity?

They will take the call. Yes.

Yeah.

So this might be too inside baseball and if we don't want to talk about it, that's fine. But let's talk about Flipkart for a second. I think you'll do fine on Flipkart if a few things are probably true, but very bullish. What did you have to believe to be true for that to make sense?

So if we talk about experimentation and openness to change, I think for a lot of say entrepreneurs who are listening to this who have a 10-person company, they can't even imagine what it might be like to experiment within say Walmart. They might think that it's trying to steer a continent. Uh, I would love to because I'm personally curious talk about Sam's Club. I grew up going to Sam's Club, getting in the car and it was like a pilgrimage to go to Sam's Club to buy all the things that we needed growing up. And uh, I recently came across what the Wall Street Journal had called treasure hunt items. And this may go nowhere, folks. I'm warning you in advance. I don't know. But could you please explain what this means?

Well, we must not be doing a very good job then if you don't know where it is.

Okay, I can't just move on from this. So, is this like the $200 hamburger with gold leaf on it that you see in almost every major city like once a year for driving foot traffic and PR? How much of say a jet or the Harley is driving foot traffic versus PR versus other considerations?

You have a reputation for being very poised, very calm, very even-keeled. Uh I had read that your competitiveness comes from your mom, which may or may not be true. Again, internet question mark.

Uh so where does the poised calm at ease come from?

So the poised and calm, is that nature? Is that nurture?

You're faking it. This is something I think a lot of people would like to fake. If that's actually true. So tell me, I mean talk about where that comes from. If it comes from anywhere or if that's just from the womb onward.

How does that manifest in your life?

Hi. You know, I was uh I think I was reading it might have been on the podcast exchange with Peter Thiel and he was describing how and I might be getting this slightly off but I'm paraphrasing here. Looking for areas where he could be less competitive sort of increase well-being. Are there areas where you've consciously tried to ratchet back on the competitiveness?

All right.

Moving on. What is the first say? And this may vary. I'm sure it does vary day to day, but if you have the time to follow a particular routine in the morning, are there any particular rituals or routines that you have in the first hour or two of waking up?

And that's something you read. That's something you read out loud.

What time do you wake up generally if you're?

What is your default breakfast look like? What do you eat for breakfast?

God, I got one original question. Two fried eggs and toast. Do you drink coffee?

How much coffee do you drink?

That sounds like a conversation ender. Uh you get to the office. All right. You arrive at the office. Then what do you do if you're in town? I can't imagine that it's just left to whim. So there must be some structure, some lattice work uh on your day or week. Are there any must-dos on a daily or weekly basis?

Looking at your travel schedule, which I haven't seen all of, but you were describing just the last few weeks to me before we got up on stage. What are some of the self-care techniques that or strategies that you've developed so that you just don't wear yourself out? I mean, what are some of the things you do or don't do when you're traveling, before you travel, when you land, anything like that that helps you to sustain?

What seems to me to be a just ultra endurance marathon that doesn't end?

So if you think back to any one of those fire breaks, could you give us an example of what you then do in that day?

Oh, it could be.

And when you do those fire breaks and you let's just say you have blocked out three to four hours to think, how often is that by yourself versus with other people?

Thank you. Glad I asked that. Uh this is a tough question, but I want to go fishing and see what we get here. So, in the last handful of years, could be five, three, it doesn't really matter. What new, you talked about belief earlier, new belief, behavior or habit has most improved your life or greatly improved your life, would you say? Any change of thinking, new thing that you do or have stopped doing, anything at all, new addition to your life?

What led to sort of the 15-minute increment routine, Doug, to the being more open to change? Was there a particular event or conversation or period of time that led you to realize how valuable that could be? What led to the change?

That watch experiment is really cool. A friend of mine had a similar experience where someone he had hired to assist his company recommended same wrist but put it on the other side and see how long it takes you to actually turn your wrist to that new side. It takes a long time as an indication of also not just the potential importance of change but how you have to give it some time for it to become instilled. When you feel, and maybe you don't feel this, but when you feel it seems like the fire breaks are one example of contending with this overwhelmed or unsure of what to do besides the fire breaks, is there anything else that you do?

Prayer, do you have particular prayer or type of prayer? What does that look like?

Two 255. This is definitely if you want to dance around the ring until the time goes out, you can do that.

Thank you.

Let's wrap this dude up.

122. I think we have time for maybe one more, but I'll see if I can sneak in two. Do you have a favorite failure of yours? Meaning something that seemed like a failure at the time that ended up setting the stage for something better?

I know we're at 0000. Very last question. Very last question. You have a billboard. That billboard, metaphorically speaking, gets a message out to billions and billions of people. Anything you would put on that, a word, a quote, a question. Anything that comes to mind that you would put on that billboard.

Hey guys, this is Tim again. Just a few more things before you take off. Number one, this is five bullet Friday. Do you want to get a short email from me? Would you enjoy getting a short email from me every Friday that provides a little morsel of fun for the weekend? And five bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered. It could include gizmos and gadgets and all sorts of weird that I've somehow dug up in the world of the esoteric as I do. It could include favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short. It's just a little tiny bite of goodness before you head off for the weekend. So, if you want to receive that, check it out. Just go to 4hourweek.com. That's 4hourweek.com all spelled out. and just drop in your email and you will get the very next one. And if you sign up, I hope you enjoy it. This episode of the Tim Ferriss Show is brought to you by LinkedIn. The right hire can make a huge impact on your business. The wrong hire can crater your business. And I have seen example after example from thousands of my readers at a minimum where they've told me stories of how finding the right person at the right time and in some cases not even asking what should I do but asking who should I find because that person can help me determine what exactly to do more intelligently and I've had a chance to hire two such people in the last year and that has just made my business take a quantum leap forward. Board and my complexity in my personal and business life get cut dramatically and this type of simplification cannot be overvalued. We think a lot about hiring and I think a lot about hiring and it is a skill that I've had to learn. It is important to find the right person but where do you find that person? You can post a job on a job board and hope that that right person finds your job, that they are on the internet happening to scan something here and there and then find you. But think about it, how often do you hang out on job boards? The answer is probably not very often. So don't leave finding someone great to chance when you can post your job exactly where people go every day to make connections, grow in their careers, and discover job opportunities. That is LinkedIn. Most LinkedIn members haven't recently visited the top job boards, but nine out of 10 members are open to new opportunities. And with 70% of the US workforce on LinkedIn, posting there is the best way to get your job opportunity in front of more of the right people. And you can be very, very highly targeted and specific to people who are qualified for the role you have and ready for something new. This is where you find them. It's the best way to find that person, that key person who will help you grow your business. And this is why a new hire is made every 10 seconds using LinkedIn. That's bonkers. Every 10 seconds. So head to linkedin.com/tim and get $50 off your first job post. That's linkedin.com/tim to get $50 off your first job post. linkedin.com/tim. Take a look. Terms and conditions do apply.