I am a big believer that the private sector will be the leader in moving the U.S. forward in "green" initiatives and alternative energy. One of the biggest proponents of such efforts is Wal-Mart, a company which I admire for a wide variety of reasons. Andrew Winston at HarvardBusiness.org just reported on Wal-Mart's Sustainability Summit--Beijing 2008. The purpose of the event was to explain to Chinese suppliers Wal-Mart's policies on a variety of "social" issues including the environment, to discuss their enforcement of these policies and the consequences of a continued failure to comply.
In the course of Winston's reporting, he quotes Lee Scott, the current CEO:
"A company that cheats on age of labor, dumps chemicals in rivers, or does not pay taxes will ultimately cheat on the quality of products...that's the same as cheating on customers and we will not tolerate that at Wal-Mart."
There are three management lesson's to be gleaned from this quote:
- Once you start cheating you will continue to need to cheat because you have never addressed the real business issue. People cheat because they do not have the intelligence and expertise to solve their business issues and fall back on further cheating as the problem worsens. (Note: for example, MCI's bad accounting had gone on for three or four years before the company self-destructed.)
- Whenever you find a serious problem in a company, such as cheating on taxes, you will always find other serious problems. Bad management is never localized, such as only in tax return preparation, but it permeates throughout a company. (Note: for example, when you are doing due diligence on an acquisition and find one serious issue, there are always other serious issues.)
- Consider every management decision first in the context of how it affects the customer. Taking every thing back to how it affects the customer is gospel at Wal-Mart.
