Wal-Mart’s John Aden talks leadership, relationships

Servant leadership, which was at the central core of Sam Walton’s business ideology, was a priority topic for Wal-Mart’s John Aden, executive vice president of merchandising services, and the speaker at Thursday’s (May 2) Walstreet Breakfast series, a Bentonville Chamber program.

Aden delivered a heartfelt message about leadership and value systems that he said drew him to Wal-Mart after having worked as CEO of Mac Tools and spending a decade in sales and management positions for the Frito-Lay Division of PepsiCo.

While Aden never had to the opportunity to meet Sam Walton, he said when Mac Tools was facing major restructuring in 2003 amid financial troubles, he traveled to Bentonville to meet with Don Soderquist and Andy Wilson, then business counselors and longtime students of Walton.

“In April of that year I had to lay off of 46% of my workforce, a very difficult thing to do but necessary for survival. I had led that company for three years and we had some really good strategies,” Aden said. “But we were forced to restructure, take a major pivot and I remember thinking, 'Now what?'"

What he learned from Soderquist and Wilson was that even the best strategic plans can fail unless they have a strong and shared value system.

“At that time in my life as a leader I was so desperate I needed to believe what they said was true. So I called my leadership team from right here in Northwest Arkansas and had them meet me in Denver for several days of planning so we could define our value system. It was hard work, really hard work, but awesome to come up with leadership values that we could cling to as a leadership team and live out in our daily lives,” Aden said.

Those value include individuals willing to be 100% responsible, never willing to pass the buck, and honoring the contributions of others. Aden said an effective leader will also assemble his team around a common purpose, and perhaps no one did it better than Sam Walton in his simple message of “working together to save people money so they can live better.”

A shared purpose and core value system are the underpinning for good leadership, but Aden said innovation and collaboration are just as important for its continued success. He spoke of Wal-Mart’s innovation with the small Express stores, a 180-degree turnaround from the supercenter and the need for constant collaboration with suppliers as more of these stores will be rolled out in the near term.

“Wal-Mart is at its best when it’s collaborating with suppliers,” Aden said.

He recalled three years ago when Wal-Mart decided to bring back hunting, fishing, sporting goods and expanded hardlines inventory.

“I was put in charge this effort, some 90 days into my new job in merchandising. As a former supplier I thought I knew how to get the message out. Even though I had the right words to say, the suppliers wanted to know how we would back it up. So at the company year beginning meetings I decided to introduce the ‘Bring it meetings.' I told some 1,000 or so hardline suppliers that I was clearing my calendar for the next six weeks and got a few category leaders to do the same. We committed to meeting with suppliers who wanted to bring us big ideas,” Aden said.

Over six weeks, 3.5 days a week and 10.5 hours a day, Aden said they met with 146 suppliers.

“It was amazing, we got new ideas, new products, new brands. Our goal was to get two years of sales growth in one and we surpassed that. Even last year hardlines outpaced grocery at times. I know that collaboration works,” he said.

Aden called on the help of suppliers in the coming year as Wal-Mart will add some 200 new stores, which could continue to cause challenges in the supply chain with on-shelf-availability.

While he is comfortable with inventory levels, Aden said there is room for improvement, and he believes Wal-Mart is up to the challenge despite the growing complexity that comes from the retailer’s localized products initiative.

For instance, two years ago Aden said there were 800 modulars of ice cream, but now with the company’s efforts to pull in local and regional brands that number has risen to 4,000.

Lastly, Aden spoke of the stewardship, saying it's the fifth trait found in effective leaders. He said Wal-Mart is modeling stewardship with its plans to hire 100,000 veterans returning from active service over the next five years.

The $50 billion investment Wal-Mart says it will source from U.S. suppliers is also seen as a stewardship play as this initiative is expected to bring more jobs onshore and allow some U.S. companies the security they need to expand manufacturing.