Wal-Mart Drafts Leaders for Military-style Training
A 16-week academy for leaders holds key to future growth, company officials say.
Attending Wal-Mart Leadership Academy rekindled Tracey Lloyd's memories of boot camp.
Although hardly dangerous, Wal-Mart Stores Inc.'s training program for top leaders has a military air that gets participants "thinking two ranks above their level," says Lloyd, a retired Army captain and Bronze Star recipient who joined the Bentonville, Arkansas-based retailer in 2008.
Lloyd embodies Wal-Mart's fast-track approach to selectively developing new leaders. Since completing the academy training in 2009, Lloyd has been promoted three times, including her current role as one of the directors at the academy.
The 16-weeklong program puts Wal-Mart's store managers, merchandising managers, operations managers and shift managers through their paces. Different learning objectives are set for each week, ranging from how to win the trust of employees to selling mass merchandise in Russia. Just like boot camp, the intense program "breaks you down so it can build you back up again"—a necessary experience in adjusting to the pressures of running a retail store.
"It's designed at the outset to overwhelm you, which can be frustrating. Then again, running a store can be frustrating. As a leader, you must learn to push it deep down in your belly until you get the hang of it," Lloyd says.
In addition, managers gained a newfound appreciation of different roles inside Wal-Mart, Lloyd says. "As a store manager, it's easy to think everything is up to you. The academy experience showed us how the various functions need to work together to make the store successful," Lloyd says.
By providing focused development for new leaders, Wal-Mart is trying to avoid the fate common to many other companies: Promoting people without adequately preparing them. Nearly 40 percent of first-time leaders ultimately fail, according to a comprehensive study in May by Development Dimensions International Inc., a Pittsburgh-based consulting firm.
The report, Be Better Than Average: The State of Frontline Leadership, is based on a survey of 300 human resources executives.
The No. 1 reason for failure is a lack of training on interpersonal skills, including listening, empathizing and involvement. "Leaders are not receiving the development or support that they need to succeed given these new expectations," says Richard Wellins, a senior vice president at DDI.
The academy was launched about five years ago at the urging of President and CEO Bill Simon following a determination that Wal-Mart lacked the leadership depth needed to meet anticipated growth. Wal-Mart posted revenue of $469.2 billion in its fiscal year that ended in Jan. 31, 2013. In the U.S. alone, Wal-Mart operates more than 4,100 retail stores and distribution centers.
"Our analysis showed we were capable of building new stores faster than we could prepare new store managers," says Celia Swanson, Wal-Mart's senior vice president of talent development.
The academy is geared to leaders deemed to have high potential, Swanson says. Those tapped to participate are pulled out of their daily role and immersed in hands-on exercises and work projects. The training blends theory with practice, using business-case scenarios to expose people to a range of different experiences.
The program works this way: Participants spend two weeks at a time at Bentonville, followed by two weeks back in the workplace. The process repeats itself up to four times, for a total of 16 weeks.
The endgame is to get people ready for promotions within 30 to 90 days after graduating. Since its inception, more than 500 leaders have graduated from the academy. That is a fraction of Wal-Mart's 2.2 million employees—1.3 million of whom are based in the U.S.
"It's a small group that we've put through the training, but that's the point. It's an accelerated development that enables them to step more quickly into a broader role," Swanson says.
To develop its training, Wal-Mart turned to global consulting firm McKinney Rogers, whose clients include Wirtz Beverage Group and ITV, the largest commercial television network in the United Kingdom.
The academy borrows liberally from military training, which blends theory with practice, says Damian McKinney, CEO of London-based McKinney Rogers. Store managers are exposed to simulated situations that commonly occur in retailing, forcing them to think critically and make decisions under pressure. "It's similar to how military leaders plan strategies for defending and defeating an effective attack," says McKinney, a former operations commando with the U.K. Royal Marines.
Military-style training complements Wal-Mart's approach to developing leaders, Swanson says. "The military has application to us in the sense that we have to teach lots of young leaders very quickly. The military also no longer relies as much on a command-and-control structure, and similarly, our leaders need to know how to get a new store and community [of employees] up and running quickly."
Community projects are a key part of Wal-Mart's leadership academy, Swanson says. For example, leaders often participate in community projects to build homes for low-income families, volunteer at children's hospitals and similar initiatives.
"Our store managers are usually one of the largest employers in the markets we serve, so the role they play as community leaders is influential. We have to prepare them for it," Swanson says.
Lloyd joined Wal-Mart shortly after retiring from the Army in 2008. She made a list of desirable employers and then winnowed it down to about a dozen companies. She says Wal-Mart's commitment to professional development was the clincher.
"That commitment to developing people resonated with me because of my time in the military. Investing in technology and innovation is important, but it's not nearly as important as investing in the people that drive business forward," Lloyd says.
Wal-Mart hired Lloyd as a developmental store manager in Jacksonville, Florida, shortly after retiring from the Army. She was invited to the leadership academy about 10 months later and was one month into the program when Wal-Mart named her general manager of its supercenter store in Palm Coast, about one hour south of Jacksonville.
Lloyd served as GM from August 2009 to January 2011, leading a team of 425 hourly workers and 12 managers. The Palm Coast store generated revenue growth topping $100 million.
Wal-Mart's executive team was impressed enough by her store's year-over-year revenue growth that Lloyd was promoted to director of store innovations. During those 18 months, Lloyd's store of 425 hourly workers and 12 managers generated annual revenue topping $100 million. Wal-Mart's executive team was impressed enough to bring Lloyd to Bentonville as director of strategy for store innovations.
She subsequently served a year as director of hiring and placement solutions for a year before becoming an academy director. Her present job includes developing content for Wal-Mart's varying levels of leadership.
Says Lloyd: "The leadership academy is not a one-time thing. It's designed to help leaders progress a career at Walmart."