Tom Seay is a two-time alumnus of the Sam M. Walton College of Business. Throughout his career, Tom developed expertise in both retail and real estate. Tom's leadership, perseverance, and work ethic progressed him through many roles at Walmart.
Episode Transcript
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00:07 Matt Waller: Hi. I'm Matt Waller, dean of the Sam M. Walton College of Business. Welcome to Be EPIC, the podcast where we explore excellence, professionalism, innovation and collegiality, and what those values mean in business education and your life today.
00:28 Matt Waller: I have with me today, Tom Seay, who is a two-time alumnus of the Walton College, before it was called the "Walton College". And he has tremendous experience in the area of real estate and leadership and management, and he personally worked with Sam Walton. But there's a number of things about his journey that are really interesting that we want to talk about. So Tom, thanks for taking the time to visit with me about your experiences and to share with our students and alumni.
01:07 Tom Seay: Well, you're very welcome and I hope that whatever I have to say will be helpful.
01:13 Matt Waller: It's amazing to me... You were leading real estate for Walmart at a time when it was just growing like crazy. But thinking back to your earlier... The earlier part of your life, I would think you couldn't ever dream that you would be leading such a large organization with such rapid growth.
01:37 Tom Seay: It actually never occurred to me that Walmart would get as big as it became and that I would play an integral part in that. And I just... I think God prepared me to to do those things. And so, it was just... It was a wonderful opportunity and it just... I don't know exactly how to express it, but it was not surprising as time went on. But it was something that... I could see how important Walmart was to just the common everyday person that didn't have a lot of disposable income. And I really bought into that and wanted to make sure that we were putting stores in communities where they really needed the product and the prices that Walmart was able to provide to people.
02:32 Matt Waller: That shows the values of Walmart really resonated with you somehow.
02:38 Tom Seay: Oh, yeah, absolutely. Walmart was the retailer and it would help people's money to go further.
02:47 Matt Waller: So, let's back up a second and talk a little bit about when you entered the Walton College, then your time in the military, and then coming back and getting your masters degree.
03:00 Tom Seay: I did graduate at the University of Arkansas in 1963 with a bachelor in business, I majored in marketing. And like a lot of guys, I started out thinking, "Well, I wanted to be an engineer." And then I found out that the math was probably more difficult than I was qualified for. And then I thought, "Well, I'll do accounting.", and then on the first test, I got an F on it. And I went up to the professor and I said, "What's going on?" I said, "I was within three cents." And they said, "Well, no, that's not good enough." And I said, "Well, for me, it's good enough to be within a dollar." And he said, "That's not good enough for accounting [chuckle]"
03:42 Tom Seay: So, I finished the class and switched over to marketing. They weren't so rigorous, they were a little bit more free-thinking about how you get things done. [chuckle] When I graduated from the university, I was... I had gone through ROTC and I was one of the top two guys to graduate that year in ROTC. And so, I went regular army and I went to Germany for three years. I was with 14th Armored Cavalry. I resigned 'cause I looked at the people, and I thought, "Oh, man, the colonels look really old [chuckle], I don't wanna look that old when I'm 40." And so, I resigned and I got sent orders back sending me to Vietnam. This was 1966.
04:32 Tom Seay: So I went to the United States and I called them up immediately, and said, "Why am I going to Vietnam? I resigned from the Army, I've served my three years." And they said, "Well, Captain, you serve at the pleasure of the President." [chuckle] He said, "The President wants you to go to Vietnam." So I went to Vietnam, I was a troop commander with the 11th Armored Cavalry. And I resigned from there, and again, they didn't accept it. And I went to Fort Knox for Advanced Armor Officer Training and then I was part of the Command and General Staff of Fort Knox. And I kept resigning and finally they said, "We're gonna let you go." So I got out, that was... I don't know, 1960.
05:20 Matt Waller: So, how many years in total were you...
05:22 Tom Seay: Seven-and-a-half. [chuckle] So I wound up staying six months longer than if I had gone to reserve. [chuckle] So anyway, then I came back to Arkansas. I had a wife and two sons, I had a job with Scott Paper Company down in Dallas, and I kept thinking, "I don't wanna do that. I don't wanna go and be with Scott Paper Company and call on 7-Eleven and stores like that." And I said, "I just don't wanna do that." So I found a job up here in Bentonville with Cooper Communities. But I figured out that I really wasn't gonna go anywhere with Cooper Communities, not that they weren't a really good company, but what they... They preferred to promote people that were members of the family.
06:08 Tom Seay: So I decided that if I was gonna do something, I needed to go back and get a master's degree from the university. So, I had registered to start in the fall. And so, I thought, "Well, I've gotta quit my job at Cooper and I've gotta find maybe another job." 'Cause I asked my wife to put together how much money we'd spent as a family the previous year. And so, she came up with that number and I looked at my GI Bill and looked at the assistantship, and I was short. So I knew I was gonna have to get a job. And so, I met Sam Walton once, so I called him up. Walmart had probably... I don't know, 60 stores at that time. Asked to speak to him and he took the phone and I said, "I'd like to come in and speak to you." And he said, "Sure, come on in on Monday." So I went in on Monday, he didn't really know me very much and I didn't know him either. I just knew that if I could get a job there, I would have some employment, but I needed to have it on certain terms.
07:10 Tom Seay: So I went in and I said I was going back to University of Arkansas, I've quit Cooper Communities, I'm gonna get a master's degree, it's gonna take me 18 months. And I'll every Saturday, I'll work every Sunday, I said, "I'll work 45, 50 hours a week and will you hire me?" And he looked at me and he thought, "Well, I don't know." And then I put down two pieces of paper and I said, "This is how much money we spent as a family last year." And then I put down this other piece of paper and I said, "This is my GI Bill, this is the assistantship I get from the University of Arkansas, and this is how much these two added together are." And I said, "This number is the difference between what I spent last year and how much income I have coming in." And I said, "I need you to pay me that much. Will you hire me?" [chuckle]
08:02 Tom Seay: And he sat back and stroked his chin, looked at me and said, "Yeah, come with me." We went out to his truck and it was kinda old and it had a lot of dog hair in it. I didn't know he was a big hunter at that point. So, he drove over to Rogers, and on the way to Rogers, he was asking me all kinds of questions about who I was, my past experiences, kinda like what we're doing right now. And he was... So I was telling him I'd been in the military and all that kind of stuff and what I've done at Cooper and... So we get to the store and I can only imagine that Sam was thinking, "What does this guy know about retail? What kind of job could I give him? What... " So we get to the store and Clarence Leis is the store manager, and Sam says to Clarence, he said, "Clarence, this is Tom Seay, he's your new hourly associate." He says... And everything that I told Sam that I needed and would do, how many hours I'd work every Saturday, Sunday, and all that kind of stuff, he said all those things to Clarence and he says, "And this is how much I'm gonna pay him... I want you to pay him," and it was more than I had asked for.
09:25 Tom Seay: And then he said, "I don't know what Tom knows about retail, but he used to be in the army, so you need to put him in sporting goods." [chuckle] Yeah, I thought about that and I thought Sam spent that time between when he said, "I'll hire you," to drive into Rogers, trying to figure out what he was gonna do with me. He was finding out who I was, what my past experiences had been, did I have any leadership skills, and all of those kind of things. He was asking questions so he could try to figure it out between the time it took to drive to Bentonville to Rogers, to figure out what he was gonna do with Tom. And the fact that he remembered everything that I had said that was important to me, it was important to him. And he made sure that Clarence understood those things.
10:25 Tom Seay: So, kind of what happened was I was in the store, I started in August and left the store in October the following year. So this was 1973 and I was there 15 months in the store. During that time, I went from an hourly associate selling shotguns and fishing lures and all kinds of stuff for cars and garden centers, to being a department manager, still an hourly, to being an assistant store manager.
10:57 Matt Waller: Did you enjoy it?
10:58 Tom Seay: I was good at what I was doing. The two times they promoted me, I turned them down each time and I told them, I said, "Listen Clarence, I'm focused on getting my master's degree." And each time, he would say, "Tom, you don't understand. We keep the same hours you're keeping now, you get to go to school, we're not changing any of that, we're just gonna pay you more money and you're gonna have more responsibility." So I said, "Okay." So I accepted both promotions. [chuckle] And then in October, Jim Walton, Sam's youngest son called me, and says, "Tom... " He said, "Dad wants you to come in for an interview to take my job." And I said, "Well Jim, what's your job?" He says, "Well, I do the real estate for the company." This was 1974. So I said, "Jim... " I said, "I don't know anything about real estate." He says, "Well, Dad wants to talk to you." So he said, "You just come on in."So we go in and I go in and they tell me to sit down on a sofa and they pull up a couple of hardback chairs and we chit-chat for a while there so Bud gets to know who I am and that kind of stuff. And then they start telling me about real estate. And so I stop them when I say, "Listen guys... " I said, "I don't know anything about real estate." I said, "I think you have the wrong man."
12:25 Tom Seay: And they said, "No, no." So they kept telling me about it. I said, "I really appreciate the fact that you all would hire me and let me work for Walmart while I'm completing my Master's degree. I'll be through in December. I'll graduate then." Quite frankly, I said, "I think I've got better opportunities than this." And I held my hand out to shake their hands, and so I could leave. And instead, they both leaned back in their chairs, they were slapping their legs, they were laughing their heads off. And finally, Sam motions with his hands for me to sit down, so I sit back down. He says, "Tom," he says, "that's not what we're gonna pay you. We just wanted to see if you had any steel in your backbone." This was 1974, and Walmart had maybe 70 some odd stores at that point, you couldn't be sure that Walmart was not gonna go bankrupt. None of the major developers, real estate developers, would talk to Walmart.
13:21 Tom Seay: Everything was developer-owned. They were leases. You had to negotiate the lease. I thought the reason they asked that question, the reason Sam told me we wanted to have to see if you had steel in your backbone is because I was gonna come up against people that were extremely tough [chuckle] and were gonna do everything they could to take advantage of Walmart. And so Sam knew the type of people that he needed for various jobs, and he knew what he needed for a real estate job. So I accepted the job and started working with Jim. Jim would send me out to look at various stores around Arkansas, Missouri, and Oklahoma just to see where the locations were. And when I'd asked questions about the leases, 'cause I'd never done a lease before, he'd say, "Here. Go to the file, pull a lease out," he says, "start reading it." And then I'd ask questions, and he'd answer questions, and then he left.
14:18 Tom Seay: So there I am in January sitting in my office going, "Oh, I've got to put stores in, 'cause I've got to hit at stores that'll open in 1976." How do I pick a town? I had no idea. I didn't have anybody I reported to, so I thought, "Well, who can I ask?" And the only person I knew that had experience in putting in stores was Sam and Bud, and I didn't wanna ask them. I thought, "Well, you know what? I've got a Master's degree from the University of Arkansas, so I can figure this out." And I thought, "You know, I had a statistics class and in that statistics class, they taught us regression analysis." So I went to the accounting department, and we had 70 something stores. I said, "I want the top 40 stores in terms of sales volume." So they printed it off for me, and so I had the towns, and I had the volume, and then I thought, "Okay, What's important?"
15:14 Tom Seay: I Went to the library and got a census data for those five states, and I picked up a book called Editors and Publishers, and they had a lot of information about towns and states and stuff like that. So then I thought, "Okay, now what I need to do is I need to figure out what these 40 stores have in common that make their sales volume so high." So I took a spreadsheet, and I listed all 40 towns then I took the top column, went along linearly, and started listing things that I thought might be important to determine what town you should go to. And then I took, and I did the regression analysis by hand. It took me all day. I remember taking all day to get that done.
16:04 Matt Waller: So let me ask you, what are some examples of variables that you used? Independent variables?
16:10 Tom Seay: Well, I don't remember what all they were, but I had about 20 of them across there. But when I ran the regression analysis, Matt, I came up with, there was only five factors that all of these successful stores had in common, population in the town, population in the county, retail sales in the county, disposable income in the county, and competition. That was it.
16:38 Matt Waller: Business Analytics and analytics in general are really popular right now. Universities put in a lot of effort into developing it, but today still, regression analysis is one of the key tools in a data scientist toolbox. So you were probably the first person at Walmart to apply data analytics.
17:03 Tom Seay: Probably at Walmart. [chuckle]
17:04 Matt Waller: Yeah. But the other thing that's really interesting about this is that you were so confident in what you were doing, you kept going anyway. A lot of people wouldn't do that. I mean you didn't wanna quit, because you had a family and all, but still I think a lot of people might back up then and say, "Okay, well, I'm not gonna use this, I'm gonna back off on that." But you kept moving forward with it.
17:31 Tom Seay: Well, I was very convinced that these were the five factors that all of these successful stores had in common.
17:40 Matt Waller: When it comes to location, store location strategies, the story about Sam flying around the plane is one that's the most well-known, and I'm sure it was a great way to do it especially early on, but it's not very scalable. Your approach is certainly was scalable.
18:00 Tom Seay: Well, I've always used that approach. If I can give you an example of something I did when I was a Director of Market and Research for Cooper. Cooper Communities would buy names of people from RH Donnelley or somebody like that up in Chicago, and they would buy names of people in just different states that they knew wanted to come to Arkansas and retire, but they didn't know anything about the people that they were inviting. So he said, "Come on, Tom, we're gonna go up and buy names." I said, "Okay." So I went up, went with him, and I was watching him by names, and so I pulled the guy aside that was... That we'd gone up to meet with and I said, "Tell me this," I said, "Can you break this down by age group, by income?"
18:53 Tom Seay: And I started giving him just some demographic. "Can you break it down by this?" And he says, "Oh yeah, we got that ability." So I went back to Bentonville and I told my wife, I said, "Listen, babe", I said, "What I'm gonna go do is," I said, "I'm not gonna be here, I'm gonna be in the evenings, I'm gonna be calling people and I'm going down to the office." So I got the names, and telephone numbers of I don't know how many people, but a whole lot of people that had purchased property at Bella Vista. So I called them up.
19:27 Tom Seay: And this is 1971. Okay. So I called them up, and then I'd tell them I'm so and so and I'm with Bella Vista Village, and I'm gonna do... I'm doing a survey about the people that bought property from us. And so I would ask them how old you are, how soon do you plan to retire, why did you buy the property, how much money do you make? When I asked that question, I was expecting none of your business, almost everybody told me with great pride how much money they made. And so I came up with a sheet that said this is the profile of somebody that buys property. So the next year we went up to Chicago to buy names. I told everybody on the trip, I said, "Listen we're not buying names the way we did in the past. I have the profile of the people that buy property. These are the type of people whose names we're gonna buy."
20:24 Matt Waller: You've always had an analytical approach to these things.
20:27 Tom Seay: Yeah, yeah, they had to be a reason behind everything.
20:32 Matt Waller: That is so amazing. Tom as we close up this session, what advice do you have for our students?
20:41 Tom Seay: When I look at people that have done well in life and I think back to my military experience, I think back to people I've known in business and the type of people I always like to hire is I like people that are self-starters, that have initiative, they're risk takers, the risks they take are not foolish risks. They like to think through it, analyze it. They need to think that what they're doing is going to be successful. And they have to have thought through the process. But then once you've done that, and you've convinced yourself that, hey, you know what I'm thinking to do is the right thing to do. And so you gotta have the courage to step up and do what you think is the right thing to do.
21:31 Matt Waller: Thanks for listening to today's episode of the Be EPIC podcast from the Walton College. You can find us on Google, SoundCloud, iTunes, or look for us wherever you find your podcast. Be sure to subscribe and rate us. You can find current and past episodes by searching Be EPIC podcast, one word, that's B-E E-P-I-C podcast. And now, Be EPIC.
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