Lee Scott?s Mission (Jeff Hankins Publisher’s Note)

The CEO of the world’s largest company and one of the most admired certainly needs no validation from a columnist.

But I have to say that Lee Scott, only the third CEO of the Wal-Mart Stores Inc. phenomenon, flew down from Bentonville for a rare public appearance for the Little Rock Regional Chamber of Commerce and impressed the heck out of me.

He delivered substance, vision, thoughtfulness and a strong case for Wal-Mart’s place in our state, country and world. I’ve listened to a lot of CEOs through the years that frankly couldn’t deliver and left me wondering how they ascended to such lofty positions.

Sam Walton would be downright proud. Scott faces most of the same challenges Walton did, and then some.

On the domestic front, Wal-Mart continues to battle fearful local community leaders, frivolous lawsuits, union threats, retail competition and soaring health care costs. Internationally, the Wal-Mart philosophies are more difficult to carry out, political challenges are abundant and distribution channels are extraordinarily complex.

Scott is skillfully leading the charge with passion. He exuded passion for the company, its opportunities and its role in the world economy.

I’ll admit being a bit troubled by his remarks about press coverage of Wal-Mart because that remains an area where, in my mind, the company still doesn’t understand how it hurts itself so often. Scott talked about the unfair negative coverage that it receives and how the media rarely present the positive impact of Wal-Mart.

In small towns with weekly newspapers, here’s the problem: Wal-Mart enters the picture and wipes out a couple of local supermarkets that can’t compete. Those local supermarkets spent a lot of money on newspaper advertising, and Wal-Mart doesn’t. The local weekly suddenly sees a huge drop in ad revenue, then receives a weekly call from the local Wal-Mart store manager asking for a photograph to be published featuring the store making a $100 donation to a local charity. Salt in the wound, as they say.

In larger cities, here’s the problem: Wal-Mart won’t communicate with the media proactively. It makes little effort to share new developments or trends — despite having so much to share that is positive. Instead, Wal-Mart public relations finds itself on the defense over and over, reacting to negative developments.

National publications like Forbes, Fortune, The New York Times, etc., certainly receive more cooperation. It’s a mixed bag of positive and negative stories, but my impression is the company receives far more positive press.

Scott did acknowledge that Wal-Mart didn’t do the job it should have in Los Angeles County in getting out the message about its positive impact on the economy. I hope the company will revisit all of its public relations strategies and media relations.

During the speech, Scott did share some information that is a good example of how Wal-Mart needs to tell its story in Arkansas more often. In Arkansas alone, the company has 43,000 associates, operates 92 stores and generates $300 million in state sales tax annually.

Allow me to do some additional math that he didn’t: If Wal-Mart generated $300 million in state sales tax last year with the tax rate at 5.125 percent, that means its revenue in Arkansas alone was nearly $5.9 billion. That’s an average of $64.1 million in sales per store in Arkansas, or $1.2 million a week.

Wal-Mart’s sales in Arkansas will increase with additional stores coming on line, but based on last year’s revenue and the new 6 percent state sales tax rate we’ll see the $300 million number grow to $354 million. This means that of the $338 million the increased sales tax is projected to generate, sales at Wal-Mart alone will account for $54 million, or 16 percent.

Here’s how we need to show our appreciation: Do a little traffic control work in Bentonville.

Scott made one very interesting plea of the powers-that-be in the Little Rock audience: Please do something about the Bentonville exits on Interstate 540 and the connecting state highways. Apparently the trip from Wal-Mart headquarters to neighborhoods in nearby Rogers and the regional airport in Highfill can be very time consuming for Wal-Mart executives and, of course, everyone else.

We owe Wal-Mart when it cries out for infrastructure in northwest Arkansas. And with the job Lee Scott is doing, I’d like to see the state make him happy.

(Jeff Hankins can be reached via e-mail at [email protected].)