Power Sheet: Walmart's Risky Bets Seem to Be Paying Off

True leadership is dangerous. If doing something isn’t risky, then anyone could do it and no leader is needed. Three examples from recent news:

–David Phung saved a woman (and her dog) in Louisiana flooding when others wouldn’t. A convertible is sinking into the roiling brown floodwaters as a boat approaches with three men and a camera crew. The woman in the car says, with remarkable calm, “Oh my god, I’m drowning.” The men try to break a window but can’t. They do manage to tear open the car’s top. As the car disappears, David Phung jumps from the boat into the water, reaches beneath the surface, and pulls the woman out. She asks him to get her dog, but he says he can’t and the dog is gone. She says it better not be. So he takes a breath, dives down, and emerges with the dog.

That’s not just heroism; it’s leadership. At least two other people could have done what he did, and maybe they would have. But he did it first. Fortunately, that camera crew means we can watch the whole thing and be inspired.

–Doug McMillon’s risk-taking at Walmart seems to be paying off. Risks are at many levels, and they all matter. Phung was risking his life, McMillon merely his career when early last year he decided to raise the pay of Walmart store employees and to spend more on store appearance and merchandising. He was betting that more satisfied workers and upgraded stores would attract more shoppers and increase sales. That outcome was uncertain, but the costs were not; the company said the wage boost alone would cost $2.7 billion over fiscal 2016 and 2017.

Yesterday the company reported that customer traffic and same-store sales were up last quarter, while Target, Macy’s, Kohl’s, and Nordstrom all reported same-store sales declines. Analysts credited the new investments in employees and stores. Walmart raised its revenue and profit guidance, and the stock surged. The company still faces major challenges, especially in e-commerce. But who says CEOs are afraid to manage for the longer term?

–Senator Leila De Lima may be risking her career and her life by defying the Philippines’ president. She’s conducting a senate inquiry into the rash of “extrajudicial” killings of suspected criminals by police and self-styled vigilantes since President Rodrigo Duterte took office June 30. He responded by accusing her publicly of accepting money from drug dealers to buy a house for her driver, with whom, he said, she was having an affair. As usual with his many public accusations, Duterte provided no evidence.

Crossing Duterte is extremely dangerous. He has promised to pardon police and military who kill suspected criminals – no evidence or process required. He has threatened journalists with the same fate, and the man he appointed to head the national police force has said that suspects “have the right to remain silent – forever.” No one, including Senator De Lima, has any idea what’s ahead for her. But she has already established herself as a leader by taking a giant risk to do what others won’t.

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What We're Reading Today

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