Inside Walmart's Masterclass in Reputation Rehab: Kowitt

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00:00Beth, just kind of start us off here and explain, you know, how 10 years ago, Walmart was really

00:05being criticized for not treating its workers very well and how that played out. Yeah, I mean,

00:09the company today is in a completely different place than it was a decade ago. It was being

00:13criticized for not paying its workers enough, for wiping out mom and pop retailers, for creating

00:18this culture of disposable consumerism. And today, it's not quite in the same place. And really,

00:24I think that will be part of the lasting legacy of Doug McMillan when he steps down in January.

00:30And what he did was invest in his workers to the tune of $2.4 billion. What did that look like?

00:36What did that entail? So really what it was, was not just about wages. It was about training.

00:41It was about education and more than just jobs. It was about creating careers. So there was a path

00:47for people to make their way to the top. And that changed the kind of employee that the company could

00:54attract. It made them want to stay longer. It made them realize that there was a future for

00:59them at the company. And this was something that at the time when Walmart announced this initiative to

01:04invest in its workforce, investors didn't take kindly to it. No, they hated it. They really hated it. I

01:09mean, the stock plummeted on the news. You know, this idea that you would invest this much money

01:15in your workforce really did not fly. I mean, up until then, Walmart had really been about squeezing

01:20out costs. And this was just a very different approach for the company. And the fact that it

01:25worked over the long term is something that a lot of observers picked up on. You mentioned how this

01:30became a case study for Harvard Business School. That's right. And they really looked at what did

01:34the what did this do to the company's culture? What did it do to the stock? What did it do to the

01:38sales? And, you know, we have the receipts now all these years later. You know, the market cap

01:44has tripled. We've seen the stock return more than 400 percent on Macmillan's tenure. So

01:50this worked. We now have the data. And it's going to be interesting to see what people do with this.

01:56And this is not to say that Walmart didn't invest in technology either, because Doug Macmillan's

02:00legacy here will definitely be the fact that he turned Walmart into a tech first kind of company,

02:05so much so that they would now want to switch their they are switching their listing from the New

02:09York Stock Exchange to the Nasdaq. How does technology and AI fit into Walmart right now? What has he

02:14done? That's absolutely true. And I think it's really worth acknowledging that they didn't ignore

02:17technology. AI is embedded throughout the company. It's really important to what they do. They grew

02:23the e-commerce business tremendously, but they have not used AI to justify massive layoffs. They

02:30haven't done that in the way that we've seen at other big employers. And I think what they're saying

02:34is that we want to bring everybody through to the other side. So what can we do? They're studying

02:39how jobs will change. They've acknowledged every job will change. But what does the future really

02:45look like for each and every employee here? And they have said they will keep headcount flat even

02:50as they grow sales. So they are thinking about efficiencies, but just in a different way.