The New York Times doesn’t like Wal-Mart, and over the years, the Old Gray Lady has taken shots at America’s Store in hopes of crippling its leadership and slowing its success. Goaded by the labor unions, the NYT goes to great lengths to splatter mud on Wal-Mart’s corporate practices. They demonize Wal-Mart and characterize its management as dictators controlling an evil empire from the bridge of the death star in Bentonville, Arkansas. Why? It’s simple really. The New York Times is run by liberals living in a bubble who oppose good old fashioned capitalism. They don’t believe in an American Dream that enables a family owned business to build itself up to become the worlds largest retailer, employing 1.6 MILLION people in 3,800 stores in the US alone. The liberals at the NYT and their ACLU brethren truly believe that Wal-Mart’s goal is to victimize and enslave their workforce. In a nutshell, they believe a Wal-Mart store is no different than a sweatshop in a third world country, and they must be stopped.
So it is that we have this today, the next salvo in the NYT war against Wal-Mart.
On Private Web Site, Wal-Mart Chief Talks Tough
In a confidential, internal Web site for Wal-Mart’s managers, the company’s chief executive, H. Lee Scott Jr., seemed to have a rare, unscripted moment when one manager asked him why “the largest company on the planet cannot offer some type of medical retirement benefits?”
Mr. Scott first argues that the cost of such benefits would leave Wal-Mart at a competitive disadvantage but then, clearly annoyed, he suggests that the store manager is disloyal and should consider quitting.
The Web site, which Mr. Scott uses to communicate his tough standards to thousands of far-flung managers, gives a rare glimpse into the concerns that are roiling Wal-Mart’s retailing empire, from the company’s sagging stock price to how it treats its workers. Judging by the managers’ questions, Mr. Scott has an internal public relations challenge that in some ways mirrors the challenge he faces from outside critics.
And while Mr. Scott’s postings are usually written in a careful, even guarded manner, they can often be revealing — for example, showing a defensiveness and testiness with critics — that Mr. Scott normally keeps under wraps.
So, there’s your premise. Due to the fact that Wal-Mart has been forced to fight two battles, an external one in the press, and an internal one amongst it’s workforce, its leader, Lee Scott Jr., is a stressed out CEO who is one step away from entering a private padded room wearing a self-made straight jacket. At least, that’s the way the New York Times sees it.
But once again, the liberal socialists at the New York Times have it wrong. While they attempt to characterize the internal conversations between Mr. Scott and Wal-Mart employees as equal to a one sided dialog between a slave and his owner, they have failed to see the business logic which provides the foundation for Scott’s answers to a few ignorant questions posed by some Wal-Mart employees.
In his response to the store manager who asked about retiree health benefits, Mr. Scott wrote: “Quite honestly, this environment isn’t for everyone. There are people who would say, ‘I’m sorry, but you should take the risk and take billions of dollars out of earnings and put this in retiree health benefits and let’s see what happens to the company.’ If you feel that way, then you as a manager should look for a company where you can do those kinds of things.”
Mona Williams, a Wal-Mart spokeswoman, said Mr. Scott responded so sharply because of the manager’s sarcastic tone. The question, she said, indicated the manager failed to understand how competitive retailing is and would not be able to convey that to his subordinates.
“At Wal-Mart, we communicate very candidly with one another,” she said. She added that Mr. Scott’s tone did not deter employees from asking questions, noting that 2,147 questions have been asked since last April.
Oh, but that kind of open communication can’t possibly be healthy, that is, if you’re the type to believe the leadership at the Times.
Here are some of the other ‘unpardonable sins’ committed by CEO Scott, according to the NYT:
- He denounces managers who complain about the company or their subordinates.
- He frets about the success of his competitors.
- He exhorts employees to act with integrity.
- He mocks other large corporations for problems caused by its generous benefits.
- He rejects the suggestion that Wal-Mart has created “a culture of fear”.
- He hails Wal-Mart’s performance in responding to Hurricane Katrina.
Sounds like a great manager to me.
The NYT then throws in this attempt to discredit Scott.
Mr. Scott, 56, joined Wal-Mart in 1979 as its assistant trucking manager. Helped by his affable manner and his command of the company’s vast distribution system, he was named chief executive in 2000.
This is nothing more than a shameful slight of hand attempt to beat Scott with the old silver spoon, claiming his rise to power within Wal-Mart was accomplished through the hard work of others, and not his own efforts.
Throughout the dozens of postings, Mr. Scott shows deep concern about the many attacks and allegations that Wal-Mart skirts environmental and labor laws. He acknowledges that Wal-Mart used to have a greater tolerance for managers who cut corners, but his postings insist that Wal-Mart’s new focus is on total compliance with the law. In a posting last June, he quoted the Rev. Dr. Martin Luther King Jr., saying, “The time is always right to do what is right.”
Responding to a manager’s question about attacks on Wal-Mart’s image, Mr. Scott wrote in an April 2004 posting: “Your value to Wal-Mart is outweighed by the damage you could do to our company when you do the wrong thing.”
“If you choose to do the wrong thing: if you choose to dispose of oil the wrong way, if you choose to take a shortcut on payroll, if you choose to take a shortcut on a raise for someone — you hurt this company,” he added. “And it’s not unlikely in today’s environment that your shortcut is going to end up on the front page of the newspaper. It’s not fair to the rest of us when you do that.”
This guy is a company man with a business sense that doesn’t crumble when employees misunderstand the corporate goal. And hey, when you’ve got 1.6 million people working for you, it’s naive to think everyone is going to ‘get it’. At the same time, Scott’s responses clearly show an attempt to help the Wal-Mart workforce understand the rationale behind the decisions made from corporate headquarters. These sound business decisions have made Wal-Mart what it is today, a retail success three times larger than its closest competitor.
But, success always comes at a price, and Scott understands this. Following the release of the NYT piece today, he sent an internal memo to Wal-Mart associates.
“Well, we had been looking for ways to promote Lee’s Garage, and it looks like the New York Times has done that for us. The reporters take issue with my tone in some cases, but as you all know, with me, what you see is what you get. I will respectfully tell it like it is. I think the story ends on an important point, quoting my advice to an up-and-coming leader: “The first thing you can do is make sure you treat your people well, and understand that your associates are what will make you a success.” I truly believe that and think you can’t go wrong in this business if you live by that.”
The New York Times effort to describe Lee Scott as a disconnected, elitist, Attila the Hun, mercenary CEO who’s out for himself fails at every turn. And so it goes. The Old Gray Lady tries and tries again to beat the prize fighter, but once more the decision goes to her opponent, and she ends up face down on the mat.
Nice try.
UPDATE: Bloggers scoop NYT.
