How Walmart Trains Better Leaders

Walmart Stores serves customers more than 200 million times per week at over 10,300 retail units under 69 different banners in 27 countries. With fiscal year 2012 sales of $444 billion, the Bentonville, Arkansas-based mega-retailer employs 2.2 million associates worldwide. Developing leaders for such an undertaking is no small thing. In 2009, Walmart U.S. CEO Bill Simon—a former naval aviator—engaged Damian McKinney—a former commando with Britain’s Royal Marines who runs a consulting business helping companies execute their strategy— to assist Walmart in accelerating the preparedness of leaders and to cultivate managers fast enough to meet rising demand. (Simon had met McKinney earlier in both men’s careers when they were colleagues at Diageo.)

Together with several colleagues—themselves former U.K. military officers—McKinney devised a leadership-training program using the staff college model of the Royal Military Academy Sandhurst, where British Army officers are trained to take on the responsibilities of leading soldiers in combat. He has also written a book, The Commando Way, where he sets forth his ideas about business execution. The underlying premise of the academy is step-up development—to always train people for the next job or two up the chain. In addition, all training is built around real-world-based simulations that mirror actual or likely conditions specific to a company’s challenges.

Normally a publicity-shy company, Walmart doesn’t volunteer much apart from the fact that, to date, 496 of its executives have gone through the Academy. “We know our associates are our greatest asset; investing in the development of our future leaders is essential,” says Celia Swanson, senior vice-president of talent development for Walmart in the U.S. “Through The Leadership Academy, we have developed talented leaders, managers and associates around the country—providing immersion training and broader development for our leaders.”

McKinney, who led the effort to train high-performance teams, reports that the entire program he and his team created was turned over last January to Walmart and that two of his aides de camp, James Cameron, a retired colonel in the British army, and Pippa Pomeroy, a former logistics officer in the Royal Navy, have left McKinney Rogers, the global business execution firm Damian McKinney leads, to run Walmart’s Leadership Academy as directors. To learn more, Chief Executive spoke with McKinney in New York.

How did you and Bill Simon come to devise what later became the Walmart Leadership Academy?

About four years ago, I sat in a strategy meeting with him and his leadership team, and one of the discussions we had was around bench strength. How do you get your bench strength wider and deeper? But the real issue, particularly when you’re opening stores and growing rapidly, is to move people into more roles and to promote them faster. Inevitably, there’s a period during which one is operating one level down. [Newly minted executives aren’t] really effective until they’ve done at least six months on their jobs.

The second element concerned the challenge of depth. How do we also make sure that you’re building potential for future leaders [who] we can accelerate through the business? I suggested that Bill consider a military model—what we call a command-and-staff model. Bill refers to it in this way. It’s essentially a staff college system whereby, when you are being trained, you’re never trained in the job you’re doing; it’s what you are about to do. For example, one is never trained to be a corporal on a training course to become a corporal. Actually, most of the training is about how to be a sergeant.

The essence of this training and development model is to stretch people constantly. What’s the advantage? First, leaders who think one and two levels up think differently. This is important because, when confronted with a difficult situation, they are better prepared and are not thinking, “Well, hold on a minute. This is not what I planned for or expected and it’s all too difficult.” Actually, they’re always in tune with the big picture. Secondly, it means that when you promote [people], they hit the road running.

There’s an extra component to this that I inserted into the system, which Bill agreed to. The danger with most leadership development is that when people take leadership courses, they think they’ve ticked the box and are done. When I attended staff college, you were judged on how well you did on the leadership program. At the end of it, we had what’s called Black Bag Day. You would be given an envelope and told what your next job was. And it depended on previous reports, as well as how you performed under pressure during the training. Your performance during such training determined whether you would be on track to be a general or whether you were going to remain a colonel. It’s a harsh system, but everybody knows it.

How did this approach specifically apply to Walmart’s business challenges?

What we did in Walmart [was] simply to say, ‘Let’s design simulations where we get people who, for example, have been a store manager to be in charge of merchandising.’ As a result, they see the business through a different lens and understand the challenges before them.

We created a series of simulations where as much as 30 percent of the leadership training involved soft skills involving how you manage people when unexpected things happen. People learn through experience. We put candidates through actual experiences to stretch them. This involves actual front-line store operators working in stores real-time—the equivalent of training using live ammo. The candidates know they better get it right. It’s not just theory. It’s practical.

What specifically did you do to help Walmart modify or improve the selection process of candidates for the academy?

The criteria is simple: Management must determine whether an individual is capable of operating one or two levels up, rather than whether he or she is a brilliant store manager today. Secondly, the person must be considered a future Walmart leader. Does [he or she] exhibit the values of the brand and what it stands for? This had the effect of having senior executives and operational leaders going back through prior appraisals with HR to re-examine their past evaluation process. That process has since been updated accordingly.

To what degree are current Walmart executives, including Simon himself, involved?

Bill regularly attends sessions. He’ll speak to groups and ask, “Come on, tell me about Walmart, where we’re going?” Because Walmart wants to be a global business, it is very attentive to creating leaders who think, operate and understand the implications of that. Bill will say, ‘Come on, guys, where are we? What’s going well? What isn’t going so well? What do we need to do differently?’ He’s trying to get them to believe that being a leader of a store does not mean you’re limited to just running a store.

Where does the Walmart Leadership Academy go from here? What does Bentonville want to see happen?

They’ve done a good job at staying focused and learning how we make sure we get this absolutely right for the U.S., in particular for the stores in the U.S. In three years, I expect this will become global. We will likely see more cross-functional leadership development across the entire organization. We’ve already had people from Puerto Rico and Mexico taking the courses and graduating from the academy. It’s all part of Walmart’s desire to become a truly global—not just international—organization. They see this as an opportunity for everybody working for them, regardless of where they come from.

What advice can you give to others—most of whom will not have Walmart’s considerable resources—to improve their own leadership-development programs?

Make sure that when you bring [people] in to help you to develop leaders, that they create content that is relevant to your environment and what you’re doing. Identify and create simulations for the environment in which you’re operating. Two, make sure your operational leaders are involved. Three, make sure that people understand that this is a milestone in terms of future career progression. It’s not a tick box. It doesn’t matter what size of a company you are. If you can do these three things, you can be a formidable power.