Sam Walton once said: “We change a lot at Walmart. Retailing is change.” (Thanks to Nicholas Graves for showing us the video of Sam Walton making this statement.) This quote highlights an important distinction: leadership is about embracing, driving, and adapting to change, whereas management focuses on handling complexity. The continual change at Walmart was a testament to the strong leadership within the company.
From Walton’s perspective, his belief that “retailing is change” reflected his relentless pursuit of improvement and innovation. Whether through visiting competitor stores or seeking out ideas from those around him (especially hourly associates and mid-level managers) he was always looking for opportunities to innovate. The essence of leadership lies in recognizing and acting on opportunities for change and innovation. This is particularly powerful because organizations that innovate to reduce costs and improve service gain a competitive advantage.
As John Kotter put it in his Harvard Business Review article “What Leaders Really Do”:
“[L]eadership and management are two distinctive and complementary systems of action. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile business environment” (Kotter, 2001).
Understanding this distinction is practical, especially when we look at Walmart as our “living leadership laboratory.” (See https://www.linkedin.com/pulse/why-walmart-living-leadership-laboratory-matt-waller-bbmmc)
Sam Walton’s autobiography Made in America is full of examples showing how leadership paired with disciplined management built a successful business. Walton was candid about his relentless drive:
“If I wanted to reach the goals I set for myself, I had to get at it and stay at it every day. I had to think about it all the time” (Walton, 1992, p. 188).
That focus compensated for shortcomings and propelled Walmart forward.
Fast forward to today, and Doug McMillon, Walmart’s current CEO, echoes this balance. In an August 21, 2025 LinkedIn post, he thanked associates for embracing change during visits across the U.S., India, and Mexico:
“Most of all, I want to thank our associates for their ability to embrace change. The conversations I’ve had with you over the last few months have left me encouraged and energized” (McMillon, 2025a).
In our course, we dive into this through the Leader–Follower–Situation framework, using Walmart’s story to illustrate how leadership inspires transformation while management ensures stability. (see https://www.linkedin.com/posts/mattwallerphd_leadership-waltonmba-activity-7363957667918213120-dzHI?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAAVR7IBdRxSzehXPv45syCwroMqHhVAY1k.)
Why the Distinction Matters: A Foundation for Success
Imagine building the world’s largest retailer from a single store in Rogers, Arkansas. That’s Walmart’s story, and it’s about balancing visionary leadership with meticulous management.
Kotter (2001) argues that in a volatile world, “More change always demands more leadership”, but without management, even the best visions falter. The business landscape has only grown more complex since Kotter wrote that, with factors like technological disruption, international competition, and shifting demographics demanding both.
Walton’s Depression-era upbringing in Chapter 1 of Made in America shaped his views:
“No question about it, a lot of my attitude toward money stems from growing up during a pretty hardscrabble time in our country’s history: the Great Depression” (Walton, 1992, p. 9).
He learned to value a dollar, compete fiercely, and work hard. These are traits that blended leadership’s vision with management’s efficiency.
Sam Walton initially ventured into retailing through Ben Franklin stores, where he owned several successful franchises. But he grew frustrated with the franchise agreement, which required owners to purchase 80% of merchandise through Ben Franklin. Walton disliked the restriction because he knew he could find better deals elsewhere.
Even then, he experimented with ways to draw in customers. In Newport, Arkansas, he placed a popcorn machine outside his Ben Franklin store and sold bags for five cents (half the price of the local theater.) It wasn’t just a stunt; it embodied Rule #8 (“Exceed your customers’ expectations”, Walton, 1992, p. 185). Customers felt they were getting more value, and the store became a community hub.
On July 2, 1962, Walton opened the first official Walmart store in Rogers, Arkansas. The Rogers opening was the beginning of a leadership journey defined by the conviction that “retailing is change.”
He built a company where ordinary people achieved extraordinary things through this balance.
Doug McMillon carries that spirit forward. In July 2025, he wrote about Walmart’s AI transformation in a LinkedIn post:
“We’re at a pivotal moment for Walmart and the future of retail… The rise of agentic AI is more than a technological shift. It’s a rare window where we can rewire how we work, serve and grow—putting advanced technology to work in ways that are practical, human-centered and deeply scalable” (McMillon, 2025b).
This leadership is grounded in operational excellence (management), like the “smart pricing and flow decisions” he praised in his August 2025 LinkedIn post (McMillon, 2025a).
Without leadership, organizations stagnate; without management, they descend into chaos. Kotter illustrated this with a military analogy: a peacetime army can survive on management, but wartime requires leadership at all levels (Kotter, 2001). In retail’s “wartime” era of AI and e-commerce, this rings true.
Defining Leadership: Vision, Alignment, and Mobilization
“Leadership, by contrast, is about coping with change… Major changes are more and more necessary to survive and compete effectively in this new environment” (Kotter, 2001).
Walton’s Rule #1 emphasized:
“Commit to your business. Believe in it more than anybody else. I think I overcame every single one of my personal shortcomings by the sheer passion I brought to my work” (Walton, 1992, p. 184).
His early memories in Springfield, Missouri, during the Dust Bowl reinforced this work ethic: “My dad… was an awfully hard worker who got up early, put in long hours…” (Walton, 1992, p. 9).
Swimming Upstream and Innovating
Walton’s Rule #10: “Swim upstream. Ignore the conventional wisdom” (Walton, 1992, p. 185).
He lived it. Driving his truck to Tennessee to find lower-priced merchandise is an example (Walton, 1992, p. 10).
He also frequently visited competitor stores such as Kmart to identify areas where they outperformed Walmart. When new hires joined him on these visits and pointed out weaknesses in competitors, Walton reminded them that knowing we’re better than them in some ways doesn’t help us. He would say that we need to focus on how they are better than us and implement good ideas.
And he concluded that you can always learn something from everyone.
This humility is a hallmark of leadership which requires open-mindedness.
Human-Centered Motivation
Walton’s Rule #5 emphasized servant leadership:
“Appreciate everything your associates do for the business… Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise” (Walton, 1992, p. 185).
He admitted vulnerabilities like losing his Newport lease: “the dumbest mistake I ever made” (Walton, 1992, p. 11).
Doug McMillon reflects this same spirit. In August 2025, after visiting Store 3425 in Houston, he wrote in a LinkedIn post:
“We enjoyed dropping in on Joetta, Tanya, Rocio, Saliou and the team… to listen to their ideas and feedback” (McMillon, 2025c).
His July 2025 AI post added:
“The future of retail is being shaped by AI. But it will be led by people” (McMillon, 2025b).
Defining Management: Mastering Complexity
Management is primarily focuses on handling complexity. It’s about the established processes like planning, budgeting, organizing, staffing, and controlling system (Kotter, 2001). Walton’s Rule #9: “Control your expenses better than your competition. This is where you can always find the competitive advantage” (Walton, 1992, p. 185). At Walmart’s scale (2.1 million associates generating $681 billion) management is indispensable.
Walton was deeply committed to store performance metrics, working tirelessly every day to stay informed. But he paired that discipline with leadership instincts: he empowered others to innovate. When Jack Shewmaker proposed Everyday Low Price (EDLP) in the early 1970s, Walton instantly recognized its value, its alignment with the direction of the company, and adopted it.
EDLP simplified pricing, reduced administrative costs, and improved supply chain efficiency. But implementing it wasn’t easy. It required change management. There was lots of resistance even decades later. Leadership embraced the vision; management executed it with rigor.
McMillon echoes this balance. In August 2025, he praised Walmart’s merchants in a LinkedIn post:
“From delivering rollbacks to making smart pricing and flow decisions, [our merchants] have helped our communities save money and live better” (McMillon, 2025a).
Practical Application: Balancing Leadership and Management
Walton reminded us: “You can’t just keep doing what works one time… stay out in front of that change” (Walton, 1992, p. 186).
His 10 Rules offer a toolkit for blending leadership and management:
“The hard part… is to constantly figure out ways to execute them” (Walton, 1992, p. 185).
The Tagline of our Course: Unleashing Your Leadership, Empower Others
Walton’s mantra: “We change a lot at Walmart. Retailing is change.” He resisted franchise constraints, sold five-cent popcorn, learned from competitors, embraced EDLP, and reminded us that you can always learn something from everyone.
Doug McMillon continues this spirit: “The future of retail is being shaped by AI. But it will be led by people” (McMillon, 2025b).
Leadership inspires change. Management makes change sustainable. Both are essential.
In our course, we challenge students to practice both. Lead boldly. Manage wisely. Unleash your potential to empower others.
References
- Kotter, J. (2001). What Leaders Really Do. Harvard Business Review (Reprint R0111F, originally published 1990).
- Walton, S. (1992). Sam Walton: Made in America. Doubleday.
- McMillon, D. (2025a). LinkedIn post, Aug. 21, 2025 (pricing/flow).
- McMillon, D. (2025b). LinkedIn post, July 2025 (AI vision).
- McMillon, D. (2025c). LinkedIn post, Aug. 2025 (Store 3425).
- McMillon, D. (2025d). LinkedIn post, July 2025 (long-term associates).
- McMillon, D. (2025e). LinkedIn post, July 2025 (intern softball game).
