Knight’s career rises with Wal-Mart, Sam’s Club

Peggy Knight was a single mother with a young son in 1983 when she lost her marketing job at a hospital. With no college degree and the U.S. economy struggling to emerge from a recession, Knight didn’t hesitate to attend a chamber of commerce job expo.

A few weeks later she was a $3.55-an-hour payroll clerk for an upstart retailer that had recently built a large distribution center near Cullman, Ala. —  in north Alabama on Interstate 65 between Birmingham and Decatur.

The new facility, owned by Bentonville-based Wal-Mart Stores, was the first large distribution center built outside of Bentonville, Knight said. And after a few months, Knight was certain she had found her new career: human resources.

“I thought my passion was going to be in personnel and human resources, because I helped staff that first 1 million-square-foot distribution center outside of Bentonville,” Knight said during a recent interview.

She and a handful of others helped distribution center personnel manager Charles Long hire about 500 new employees. With a jobless rate around 12% in that part of Alabama in 1983, Knight said they “interviewed thousands” for those 500 jobs.

But while being a payroll clerk would not be her career, she did find a company she would work with for more than 21 years.

In just a few years she was off to Atlanta. Then Dallas in 1991. In 1993 she was promoted to a Wal-Mart corporate post in Bentonville.

MEMBERSHIP ‘FORERUNNER’
Knight’s story with Wal-Mart, however, is not just about the result. The more interesting story is in a career path that mirrors the growth of Wal-Mart – and especially Sam’s Club – through the 80s and 90s, to include Knight’s street-smart moves and make-it-happen mentality reminiscent of Sam Walton.

Kenny Folk, who retired in 2010 as senior vice president of new business development for Sam’s Club, said Knight was a “forerunner in building Sam’s membership program” and other sales and marketing efforts.

“In a lot of the early days she did a lot to help develop Sam’s into a $50 billion company. A lot of people there today in Sam’s probably don’t realize that,” Folk said during a recent interview with The City Wire.

Knight worked for Folk in an effort to secure Sam’s Club market share in Dallas during the early 1990s.

“She helped out my career a lot more than I helped hers. I got a lot of credit for what we did in Dallas, but she did a lot of that,” Folk said.

But to understand what Knight did in Dallas that resulted in her promotion to Bentonville, we must first return to Cullman.

‘THE ASSOCIATE’
Knight had an instinctual sense of the power of social media long before there was an Internet, Facebook or the term “social media.”

The distribution center was ramping up, and employment began to approach 1,000. Knight began to notice that many employees were unaware of other departments, functions and personnel. More importantly, to a young Southern woman, these people weren’t aware of the ties that often bind – births, graduations, weddings, deaths and other key life moments.

“I thought we needed to talk about the Associates and their lives and use all that to pull the team closer together,” Knight explained. “Did they have a baby? Did someone get married? Was there a tragedy in their life?”

With very little in terms of a marketing budget, Knight asked the local newspaper to layout and print a regular newsletter she titled, “The Associate.” She would gather all the information. The newspaper officials agreed, and the distribution center simply paid the cost of printing.

This was done without Bentonville’s knowledge, or blessing. But it was soon blessed by the top boss.

“Mr. Sam liked it,” Knight said with a big smile.

Knight said Sam visited the distribution center at least once a month – more often in the first months the facility was operational. On one of those trips, Knight was told that Sam wanted to meet the person responsible for “The Associate.” She was told Sam loved the idea. The first meeting was just the two of them in the distribution center break room, and after “small talk,” Knight said “Mr. Sam” asked her opinion on how to improve distribution center operations.

“And I was blown away. I’m a payroll clerk, making $3.55 an hour, and Sam Walton wants me to tell him how to improve the business. … And of course I did tell him, because there wasn’t anything shy about me then,” Knight said with a laugh. “And I was a little naive, you know, so I just told him about everything.”

BULLET HOLES
In 1985, Knight’s boss, Charles Long, transferred to Sam’s Club to help the relatively new subsidiary – the Club was launched in 1983 – enter the Atlanta market. Long persuaded Knight to transfer with him, and after a three-month management training session in Birmingham, Knight and her young son were in Atlanta.

It wasn’t pretty.

The club, a renovated Home Depot, was in a high-crime area of town. The adjacent convenience store told a story with its numerous bullet holes. It proved to be a hard sell getting business owners to travel to the area to shop in the store.

But it was the scene of what Knight says remains possibly the highlight of her career.

Sam Walton attended the grand opening of the new club. Knight was shocked when Sam asked her and son Jeremy to join him on the stage.

“He went through my entire accomplishments to that point in my career. … And the fact that he remembered so many details about my career was just amazing. It was the most incredible thing, and I knew I wanted to spend the rest of my career at Sam’s Club and Wal-Mart,” Knight said.

Or maybe Walton knew Atlanta would be a challenge.

And it was a challenge.

‘HAPPY WITH THE OUTCOME’
Business was slow in Atlanta. PACE Wholesale Club, then affiliated with K-Mart, had six stores in the area. And people in Atlanta knew the Wal-Mart brand, but had never heard of Sam’s Club, Knight said.

The challenge was to sell memberships, and to get people in the doors. Knight responded by trusting her instincts, and she embarked upon a game plan that would, as Folk noted, be a pattern for the Sam’s Club sales effort in other regions. Of the numerous things she did, two seemed to be the most effective: Developing a regional sales team well educated about Sam’s Club, and organizing trade shows that allowed vendors to display their products to existing and prospective Sam’s Club members.

“That was a brand new thing for Sam’s Clubs, to do those trade shows,” Knight said.

The first show had about 60 vendors, and Knight explained to the vendors that not only did they have to pay to be an exhibitor, but they also had to buy memberships for all their employees in the trade area.

Knight also talked Pennzoil into giving away a car at the trade show. It was a Ford Thunderbird. Top execs – Knight was not willing to drop names – from Bentonville were in attendance. They’d heard about the trade show, but not about the car.

“Well, I didn’t check with Bentonville before I did that (talked Pennzoil into giving away a car),” Knight said with a grin. The execs praised her for the successful trade show but cautioned that “next time you might want to run it by us” before you ask a vendor for a car, Knight said of the message she received.

“But they were happy with the outcome. I didn’t get fired. I got promoted. So they were happy with the outcome,” she added.

THINK IT, DO IT
She was promoted to sales manager in 1986. In 1988 she suggested Sam’s Club create a regional sales team to market the clubs. Her idea included hiring people recently retired from successful sales careers to work part time. Not only did Sam’s Club like the idea, they hired Knight in 1988 as the company’s first regional marketing manager.

Knight, who spent a lot of time outside a Sam’s Club store and in the communities surrounding the stores, saw a need to “reach all the different demographics.”

For example, she worked with Sam’s Club officials to “align the merchandise mix” to cater to local needs. In areas with a larger Asian population, the stores would sell take-out boxes and and larger bags of rice. She did this in conjunction with working with leaders in local Asian communities to “target grocery stores that were popular” within the community.

Folk said Knight’s strength was in taking a mandate from Bentonville — like, sell more club memberships – and putting her stamp on it.

“Too many people are one-dimensional. They may be very smart, but they don’t network” and know about the world around them, Folk explained. “She helped them (Sam’s Club managers and sales teams) network. … It (push to boost sales) may have been driven out of Bentonville, but she did a lot of shaping on it.”

In the recent interview, Knight said she doesn’t recall analyzing what she did.

“You know, I just had a job to do and I did it. … Most of the things I accomplished, was from the mindset of, ‘I didn’t know I couldn’t do it.’ Sam (Walton) kind of instilled in a lot us who really knew him, that if you could think it, you could do it, you know, that ordinary people could do extraordinary things,” Knight said.

‘KICKING AND SCREAMING’
In 1991, Bentonville asked Knight to join Folk in Dallas to do another extraordinary thing and protect their Sam’s Club marketshare. Price Club had moved into the market and was gaining ground.

“I went kicking and screaming,” Knight said. “There (in Atlanta) I was just about three and a half hours from my family. In Dallas, I was 12 hours away.”

It would soon be the competition that was kicking and screaming.

Knight employed her strategy that helped boost business in Atlanta – including some of her self-described “maverick” ideas.

Without a real marketing budget, Knight “convinced” Kodak to pay for a billboard for Sam’s Club. The billboard messaged: “Sam’s Club, the original Texas warehouse club.”

The billboard just happened to be all but inside the parking lot of a Price Club store. It was so brazen a move that Price Club execs called Bentonville to complain. Bentonville called Knight to ask what she was up to. She told them it was legal.

And it worked. Sam’s Club began to grow again in the Dallas market. (Eventually, Price Club would merge with PACE. PACE was acquired by Sam’s Club.)

Knight also said she and Folk had to “clean house” within operations in Dallas. Stores were dirty. Sales teams were less than motivated. Managers didn’t want to make changes.

“People are just naturally resistant to change. But change is inevitable in a growing business, and especially in a competitive climate,” Knight said. “In the long run, I really think it was a good thing for Sam’s to have that competition come into the Dallas market. Sam (Walton) always said competition forces the competitors to improve. … And that’s what we had to do there (in Dallas).”

THE BENTONVILLE MOVE
It was shortly after the improvements in Dallas that Knight attended a managers session.

“At one of the breakout sessions I was off in the back of the room feverishly taking notes like I always did, and he (Dean Sanders, the then president and CEO of Sam’s Club) saw me back there,” Knight said.

Sanders wanted to know who the person was taking all the notes. A month later, Knight was asked to move to Bentonville to be the director of new markets. She was placed in charge of 35 people who helped her manage the grand openings of 65 Sam’s Club stores in 1993.

“That was a record, and that record still stands,” Knight said.

In 1994, she was promoted to director of national sales for Sam’s Club, where she launched the company’s first credit-card program for business members.

Knight, now moving quickly up the Wal-Mart and Sam’s Club corporate ladder, pulled another surprise. She left the company.

THE GENERAL ELECTRIC YEARS
After just two years in Bentonville, Knight moved to Dallas to “marry the love of my life.” Philip couldn’t find a job in Bentonville. Knight quickly found a job in Dallas working for General Electric’s retailer financial services division. She was promoted to a program manager in 1995. Some officials with the Stamford, Ct.-based company nicknamed her the “Steel Magnolia” because of her accent and take-charge ways.

But as much as she loved her new career with GE, she couldn’t get Wal-Mart out of her system. There was a day when, after viewing a Wal-Mart television commercial, Knight began to cry. Her husband knew where she needed to be.

“He said, ‘If they will have you back, we can move to Bentonville,’” Knight said.

BACK TO SAM’S, WAL-MART
She called Bill Fields, then the president of the U.S division of Wal-Mart Stores. About two weeks later, she was hired as director of specialty marketing for Wal-Mart.

And she picked up right where she left off.

By 1998, she was a key part of a team that launched the first co-branded credit card — the Wal-Mart MasterCard – with Chase. The new card program won a nod of approval from J.D. Powers, and Knight was named one of the Top 100 Marketers by Advertising Age.

She was promoted in 1998 to director of credit for Sam’s Club, and served in that capacity until 2002, when she was promoted and transferred to the Wal-Mart side to be senior director of Wal-Mart financial services.

Folk, the retired senior vice president of new business development for Sam’s Club, said Knight doesn’t get enough credit for what she did to improve the financial services division for Wal-Mart. He said she was “instrumental in launching Wal-Mart’s financial services.”

Sofia Vawter, now the mother of 9- and 6-year old children, was hired by Knight to work in the financial services sector. Vawter eventually was promoted to lead the retailer’s Hispanic marketing division.

“She really encouraged me to do that,” Vawter said of the promotion.

TEACHING SAM’S VALUES
Vawter said she benefitted from working under Knight because she learned “the corporate values directly as (Knight) learned them from Sam Walton.” Vawter also said Knight trained them not only for the job they had, but to develop them to be future leaders within the company.

“She always worked hard to help us strive for excellence, and she really worked with us to strive for that sense of urgency,” Vawter explained. “She encouraged us to really go outside of our boundaries.”

Vawter left Wal-Mart to raise a family.

Knight would leave the company in 2006 to bury members of her family. Within just a few years of each other, Knight’s father and grandmother – a grandmother who raised her – passed away.

“At that point, I just felt that I had to make my family a priority,” Knight said. “I really hated to do that (leave Wal-Mart), but you know, Sam would always ask about my family and always talked about family being the most important thing.”

Knight doesn’t regret leaving. Being there for her family was, and is, important. But she does miss the company, especially those years of growth.

THEN AND NOW
But would a young person without a college degree have the same chance to move up the ranks within today’s Wal-Mart?

“This is my speculation only, but it would be much more difficult,” she said, adding that the hiring process at Wal-Mart, especially at the headquarter level, makes it harder to find a “diamond in the rough.”

Folk agreed with Knight, especially as it relates to Sam’s Club.

“It’s totally different. … We were a $1 billion company then, and now it’s $50 billion,” Folk said. “You can still be a maverick within your framework. Now, can you go put up a billboard like that (Dallas) and not get in trouble? Probably not.”

Continuing, Folk said there remains room for innovation at Wal-Mart, but legal worries likely put a damper on the more edgy innovation

“We probably only had one or two lawyers in the company back then,” Folk said with a laugh.

Knight also believes the entrepreneurial spirit was “more embraced back in those days” of early growth at Wal-Mart and Sam’s Club.

“I do know that there are lot of restrictions now, because everything now has to go through an approval process. Back then, we could just make things happen, and we were told to make things happen,” she said.

However, the difference between then and now is not as important as what it has all meant to Knight.

“Wal-Mart will always be in my heart. It was my first love, you could say,” Knight said in closing out a recent interview. “It taught me about life. It taught me to have a work ethic, to care about people, and that you can do whatever you set your mind to do.”