Counting Pennies: Lessons in Frugality from Wal-Mart Founder Sam Walton
Frugality is a common trait among successful businesses. Sam Walton, Wal-Mart’s founder, provides a masterclass in lean operations. Below, lessons in frugality from Wal-Mart, based on Walton’s autobiography Made in America.
A Penny Saved Is A Penny Earned
Sam Walton was a man in a hurry. Still, a penny could stop him in his tracks. Even as he topped the Forbes charts as the richest person in America, he’d bend over to pick one up. Wal-Mart’s founder couldn’t leave Abraham Lincoln hanging. Frugality was part of his DNA. It was part of Wal-Mart’s too.
Although he was worth billions, Walton drove an old pickup truck (often with one of bird dogs riding shotgun), flew coach, stayed at Holiday Inns, and got his hair cut at the barbershop off the town square in Bentonville, Arkansas. Wal-Mart’s executive offices looked like something you’d find in a truck terminal: sagging floors, fluorescent lights, and walls covered in inexpensive paneling. David Glass, the company’s CEO from 1988 to 2000, quipped that if he hadn’t read the proxy statement, he’d have sworn that Walton was broke. Rodents might have influenced Glass’ perception. A 1990 magazine profile described Walton’s hunting camp this way:
This is a camp where your host hands you your towel, points you to a bedroom in the trailer, and explains: ‘Don’t let the noise in the ceiling worry you, it’s just rats.’
Even the origin of Wal-Mart’s name is thrifty. The main reason was that Walton liked Sol Price’s Fed-Mart (a precursor to Costco), so he riffed on it. But the kicker was that neon lights were expensive, and Wal-Mart only had seven letters; much cheaper than Benjamin Franklin which had 16. Walton firmly believed that every dollar spent on nicer hotels or clubbier offices translated into higher costs for Wal-Mart’s customers. That was anathema.
The Great Depression
Walton was born in 1918 in Kingfisher, Oklahoma. Like many of his generation, growing up during the Great Depression left a lasting impression and shaped his relationship with money. Sam’s father, Thomas Gibson Walton, held a variety of jobs, including servicing farm loans for Metropolitan Life Insurance…