Former Wal-Mart CEO talks integrity, bribery issue

Don Soderquist, former Wal-Mart Stores COO and current founding executive of the Soderquist Center for Leadership and Ethics, took the stage and it seemed the pulpit at this week's “Doing Business in Bentonville” meeting.

He addressed the company’s recent troubles with alleged systematic bribery to receive building permits across Mexico. The man allegedly directed the illegal operations, Eduardo Castro-Wright, now serves as a Wal-Mart vice president, and is set to retire in July.

"In times like this, it's good for reflection. Personal opinion, I believe Wal-Mart will have more resolve in the future as to maintaining the culture," said Soderquist.

Soderquist was known as the "keeper of the culture" after founder Sam Walton died.

"I know the leadership well and how they think. I look back when we had difficult times and was in the newspapers and look back when those were times of resolve," said Soderquist.

In his example, those times of resolve came when the company didn't make 100 quarters of increased sales and earnings. His message to investors at the time was that the 99 quarters of growth was a wake-up call, a rally cry, "Watch out we are going to be better than this," he said at the time.

During his near 20-year career with Wal-Mart, he said he never thought about "messing" with the numbers.

"We didn't build up reserves and take from reserves," he said.

As corporate scandals have evolved in the last 15 years, he has reflected on his time as chairman and told the room full of business leaders that corporate leadership at Bentonville-based Wal-Mart never talked about "what we could do to numbers."

"You will see a better Wal-Mart with tightening controls," Soderquist predicted. "However, I don't think it is going to have a significant impact on Wal-Mart business or you people here."

The recent Wal-Mart troubles were a perfect spring-board for Soderquist to launch into what he was really there to talk about: leadership.

He established the Soderquist Center in 1998. He said he created it because of concern about issues taking place in the country and a general erosion of the traditional values he was taught by his mother and father. Namely, the issues of right and wrong.

"Ethics is doing what is right," said Soderquist.

He maintains that the emphasis on values and culture, for any company, is more important today than ever. Companies lose their way because they've departed from the culture that got them there.

Soderquist used a much-used fable of IBM — the story of how the company stopped listening to its core-customer base and went away from developing personal computers. He said this was IBM going away from its culture of customer service, treating everyone with respect and striving for excellence. Those beliefs were adopted by Wal-Mart and turned into its three basic beliefs.

"When companies depart from the culture they get into rough waters," he said.

He said leaders have to think differently and act differently in times like this. He noted turnaround on decisions is faster, globalization demands more from leadership and information is transferred instantaneously.

"We are dealing with people with different cultures, beliefs, norms and it makes life complex and puts more pressure on developing people," he said

The question for Wal-Mart remains: What kind of leaders will follow this latest scandal, ones like Soderquist or Castro-Wright?