By Sarah Nicastro, Founder and Editor in Chief, Future of Field Service
Last week I attended Harvard Business Review’s virtual Future of Business event, which featured executives from across industries alongside academics discussing everything from geopolitical uncertainty and innovation to leadership and change management. One of my favorite sessions was with Doug McMillon, President and CEO of Walmart Inc.
McMillon’s 30+ year career with Walmart began in 1984 as an hourly associate, picking orders and unloading trailers in a warehouse. He went on to serve in senior leadership roles across each business segment before taking his current position as CEO in 2014. While much of the discussion was around leading with purpose in uncertain times, what stood out to me is how that mission is being applied to the company’s AI journey.
“The first thing that comes to mind with AI is opportunity,” McMillon said. “When GenAI first began capturing attention, we were pretty balanced in our mindset between offense and defense. That shifted over time to being offensive. There’s a great opportunity with AI for us to change.”
Starting Off Strong
While Walmart finds itself in a good position to play offense with AI today, McMillon spoke about how the foundation to be in that position was built over the past decade. He retold the tale of Walmart’s massive investment in transformation and the long-term view that was required. “It’s probably important to remind everyone that a little over 10 years ago we made a number of large investments simultaneously,” he explains. “Walmart invested billions in our people, billions to lower prices, billions in ecommerce and to modernize our tech stack.”
Doing so required commitment from shareholders, taking the profitability of the company down for some time. “Operating income was 6% when I took the role and came down to just North of 4%. Our shareholders paid for this so that we could invest in the future of the company. Over time, we’ve been able to bring that operating profit back up,” McMillon says.
Having this foundation in place positions Walmart well for the AI era. “Our technologists have done a great job of modernizing our tech stack and now we can infuse that with AI,” he says. “We know our priorities, we’re resourcing , we’re driving that change.”
Adapt to Continuous Transformation
A capable tech stack is just one piece of the puzzle, though. That foundational journey also readied the company for a necessary shift in approach to one of continuous transformation. “The catch up on ecommerce led us to understanding that we had to literally change the way we worked. You have to set yourself up to change all the time, not just once,” emphasizes McMillon. “That means constant learning, mindset shifts, changes to structure, new capabilities, a faster pace – so that you don’t fall behind again.”
AI will irrefutably bring with it a new wave of change, one that will transform how we work in ways we’ve only begun to imagine. “I do think every job we’ve got is going to change in some way. I can imagine how AI will change every one of them and create new jobs too,” says McMillon. “It will eliminate some tasks and some roles and what we want to do is equip everybody to make the most of the new tools available. To learn, adapt, add value, and drive growth and still be a really large employer years from now.”
6 Tips for Change Leadership vs. Change Management
Perhaps Walmart’s biggest offensive strength is McMillon’s view on what’s required to lead the company through change. His approach feels genuine, grounded, and people-centric and he shared a number of thoughtful insights on how to bring people on this journey.
- When change is vast, focus on the constants. While the inclination is to talk about the ‘why’ and the ‘what’ related to change, in a time where change is immense, consider focusing instead on what isn’t changing. “We decided fairly early on to explain to people what wouldn’t change – the list of what would was long and could be overwhelming,” says McMillon. “We spoke about what we will stay committed to…our purpose, our four core values. Everything else is open to change.”
- Keep technology in perspective. Even though McMillon is bullish on the potential around AI, the ethos for the company keeps things in perspective. “We say people led, tech powered. We want to be great at deploying technology, and we want to start with the humanity of the experience – the technology is to serve people,” he says.
- Recognize when new skills are needed. Earlier this year, Walmart brought on a new role to help lead its AI journey. “We knew top down what we want to accomplish, but so many of us were doing these things on top of everything else,” says McMillon. “We created a new role, which reports to me, who has AI experience and whose responsibility includes speeding up our AI transformation.”
- Invest in upskilling. We know that AI will change roles, but human talent will remain crucial. So, it’s important to invest in training, upskilling, and reskilling to bring your teams along and ready them for what’s coming. “We’ve given everyone a ChatGPT license so they can learn and grow and go through this process with us. We have 2.1 billion associates around the world and we’re giving them all the tools we can and being as transparent as possible,” shared McMillon. “Specific programs are being created for Walmart Academy, and we have Live Better U – we’ll pay for college tuition and books if people want to get a degree. I’ve run into people in a store that want to get into cybersecurity, for instance.”
- Nothing replaces facetime. McMillon spoke about the amount of time he spends visiting Walmart locations and engaging with the frontline, and how much value that investment yields. “Sam Walton was in the stores all the time; he became a pilot to get around faster. I spend a lot of time visiting locations and 99% of the time no one knows we’re coming,” he says. “We show up and go straight to our associates helping people check out or picking orders. The conversations always lead to something – I always leave those visits with a list of to-dos longer than what I leave because the things I learn we can use to help the whole company.”
- Prioritize honesty and consistency. In uncertain times and situations, fall back on honesty and consistency. “Being really honest about things is important and being consistent. Remind everyone what you’re trying to do. The rhythm of the company comes to mind; how often are you together in person? We really believe in that,” says McMillon. “Build relationships, earn trust, shoot people straight, go through it together. If something doesn’t work, acknowledge and move on to the next thing. Encourage, support, but lean in to change because the alternative is not very enjoyable.”
Walmart’s Technician Development & Field Service Revenue Potential
As McMillon spoke about some of the ways Walmart is investing in the upskilling and reskilling that AI demands, he shared that beyond opportunities with Live Better U, the company has begun training and certifying technicians. Further, Walmart is even offering those services externally. “We’ve been creating a lot of technicians – people to fix systems such as automated storage retrieval in DCs and HVAC,” says McMillon. “There’s more talent needed in the world to do those jobs, and we’ve been teaching and certifying them to do that work. In some cases, we have started to sell those services outside the company in what might grow into a profit center.”