McMillon Opinion

You’ve probably heard by now that the parlor game has ended — the next CEO of Walmart has been identified: Doug McMillon, who presently leads Walmart International and was widely considered the front-runner.

The Bentonville retailer made the announcement Nov. 25, ending speculation of who would one day replace Mike Duke. One day was set as Feb. 1, 2014.

Reaction to the news has been wide and varied. Most opinions held the view that McMillon was raised to run Walmart.

From an international perspective, Kevin Allison of the Business Standard — an English-language news organization based in India — said the choice of McMillon acknowledges a glum reality: Walmart looks resigned to its role as a plodding behemoth.

“With sales expected to approach $480 billion this year, the company is too big to see the next shop around the corner,” Allison wrote. “With the CEO appointment, at least the board of directors seems to appreciate Walmart shouldn’t try to be anything other than what it is.”

Another report closer to home that caught our attention was from Quartz, a new digital business news outlet launched in September 2012 and owned by Atlantic Media Co., the publisher of The Atlantic, National Journal, and Government Executive.

John McDuling, Quartz’s corporate reporter, said McMillon would have been the perfect choice — 20 years ago.

Conventional wisdom, McDuling wrote, suggests internal CEO candidates generally deliver better returns for shareholders than external ones do. He further states that isn’t always the case for underperforming companies, noting Walmart’s share price — while near record highs — has lagged the S&P 500 this year, and over 2, 5 and 10-year timeframes.

“Among the most dangerous myths in succession planning, according to the Stanford Graduate School of Business, are beliefs that what worked in the past will work in the future, and that when a company has a great internal candidate, it doesn’t need to look outside,” McDuling wrote. “Walmart’s board of directors obviously disagrees.”

In other words, if McMillon is simply a caretaker, Walmart is going to suffer.

The reporter concluded that Sam Walton himself would certainly have approved of the company’s choice, though a fresh set of eyes might have been better.

“McMillon’s close links to the Walton family, Walmart’s majority shareholders, were probably a factor in him getting the job,” McDuling wrote. “He certainly would have been a perfect fit 20 years ago, when the company’s international operations were still embryonic, the Internet didn’t pose much of a threat to brick-and-mortar retailers, and Walmart was being feted rather than criticized.”