Saturday, April 10, 2010
The power of institutional integrity
One of the most under-appreciated aspects of successful organizations is institutional integrity. I define institutional integrity as the extent to which an organization makes and consistently keeps a valuable commitment to its customers or clients. The more painful the commitment and the longer it's kept, the more institutional integrity. Walmart is a company with enormous amounts of institutional integrity. Sam Walton set out in 1962 to create a store that would bring big city prices to small town America. And Mr. Walton's original commitment to "Every Day Low Prices" indeed, the lowest regularly offered prices anywhere has driven the company's actions and success ever since.
A friend of mine was the top real estate executive at a (soon to be bankrupt) specialty retailer. He tells of going to the annual retail industry real estate conference. Like the other retail execs, he took a room at the luxury hotel nearest where the conference was being held. His two counterparts from the richest retailer in world history doubled up at a discount motel. It is this commitment to a valid goal: low prices for things working people need that has been the key to Walmart's success. And what success they've had. Click here to see a time series of the company's spread in just the US. From Flowing Data.
Exert every ounce of energy giving customers what THEY want, rather than what YOU want over a long enough period of time and you'll find that the people will reward you with far more success than you could have ever dreamed of. Just ask Sam Walton, fishing in the afterlife, out on the Openwater.