Kathryn McLay, President and CEO, Walmart International  
Interviewer: Ellie Austin, FORTUNE

MPW Summit 2023: Innovation And The Global Consumer

Conferences

Thank you so much to Connie and Malan. We continue now with a leader who oversees a complex business that operates in 18 countries. Catherine mclay is Walmart International's newly minted chief executive. She took up the post as CEO in September, but she is no stranger to the company having joined World March leadership in 2015. She most recently served as CEO of Sam's Club, a subsidiary of Walmart where she drove consecutive quarters of double digit comparable growth and navigated the members own warehouse club to huge retail success during the pandemic. We're thrilled to have Catherine join to talk about the road ahead for Walmart strategies for driving growth, the roles of data and innovation and much much more. And we're also pleased to note that c once again ranks on fortune's list of the most powerful women in business. Please welcome Catherine mclay. Hello, K hi. Hello. Hello. Hello. Thank you so much for being here. Now, as I mentioned in the introduction, you are very new to this new job. I think you said you're four weeks in. Absolutely. How's it going? And what are you hoping to achieve in that 1st 100 days. A big question. It is. It is very much like drinking from a fire hose, not to abuse that expression. But like I've gone from a company that was one formatting one country and it was like an $84 billion retailer. Like it wasn't a small company but it was, there was less complexity. Now, you're in 18 countries, you've got multiple formats. You've got over 500,000 associates around the world. We serve 80 million customers like a day. Like it's just incredible. The scale is phenomenal. Um And it is like having a portfolio of companies. So I am uh yeah, I am getting deeply involved in understanding all of that. My ambition in the 1st 90 days, I always think when I go into a new role, um I've had so many different kind of careers across retail. I always think the 1st 90 days is so important to take time to listen. Um The team that you inherit have are really proud of the work that they've done. And there's something about honoring the work that they've done and getting the rhythm of the organization and looking for the opportunities and the gaps and that 1st 90 days is um yeah, such a gift of time to be able to make sure that you immerse yourself and you uh yeah, acknowledge the work that's going on and, and look for the opportunities. Now. Walmart International's Revenue shrank. I think around 21% between 2020 2022. And this was in part due to strategic exits from certain markets. In April, your predecessor, Judith mckenna laid out plans for the international division to more than double its sales over the next five years. So I have a two part question. Is this a goal that you're committed to? And if so, how are you thinking about executing it? You're so new to the role and you're still fighting your feet, given the global economic uncertainty that we're seeing at the moment, I would say, first of all, um it's wonderful to be able to take over from a strong female leader. Judith did a phenomenal job in really going through and tightening up our portfolio and being clear on the markets where we wanted to play. Um And she set a really ambitious goal of getting us over $200 billion in top line. And um those goals were set though um by each of the individual teams. And so there's strength and there's merit in them and I don't see any need to walk back from them. Um You know, I think we are ha we do have tough inflationary environments where we operate in. But Walmart's purpose is to save people money um every day. And so now is it time where we are more than relevant in consumer life? And on that note about the consumer when you were at Sam's club, I know I mentioned the enormous growth in the introduction that you oversaw, but you spent a lot of time focusing on the members and what they wanted in the division. Can you talk to me a bit about how data helps you get inside the mind of the customer and maybe how you're going to apply that as you figure out your new role. Yeah. Um so I joined in 2019 and it was just before COVID and after about three or four months, we had to transition to work remote and I'm a new CEO and I'm in my home, like I would get out of K like to be able to go and see the clubs. But besides that, there was no, there was no office environment and there was none of those chance encounters where you're hearing and seeing what's going on in the organization. And I was hungry for information. Um And so I, I got onto Facebook and I got into Instagram and I got onto Reddit and I got on to all of these, these, these social media forums and I started to read what consumers were saying about us. Um I think historically, we've looked at tools like NPS where you're asking members and customers, would you promote us? Would you tell your friends about us? Well, I think the truest data right now is, are they? And you can tell cos there's, there's um groups and communities of members from Sam's club who are on these forums talking to each other like, oh, I just went and bought this. What would you buy for this party? You tried this? I bought this product and I couldn't get it open. What's wrong with the packaging? I was in the club and I met this delightful person. You get the good, the bad and the ugly and the truth of that data was just was, it was powerful. And so what I started to do was bring all that content into our trade meetings that we have every week, key leaders across the company. And at first, people were like, how does she know about all of this? And then as we started to work out how to ingest the information, um we started using tools like sprinkler that allows you to um really look at sentiments. And so, you know, you can look at the specific issue, you know, um Tony has on this product or you can look at what are the rising issues and where have we got people who are loving Sam's club and where have we got issues that we need to go and fix right now? And that data brought in immediacy within the organization to focus on the member and to really be accountable for fixing problems. And it was a little bit of a a revolution in our, in our company's culture. Um What could that strategy look like if you try and maybe transpose it to the 18 markets that Walmart International now operates in. Well, I mean, I, you know, day one, I was in India for a um a board meeting with flip cart and I went immediately on Reddit and started looking up like, ok, what are the consumers saying about phone pay and the things I learn about like the importance of trust of digital transactions and how they feel in that moment when they make a payment and is it going to go through and you know, the benefit of phone pay's payment system because they trust it like that immediate voice of the consumer is like it's relevant in any market and actually it's relevant across retail, into other formats as well. Now, you're a big advocate of what you have spoken to me about as being authentic leadership. Um when we, when we spoke earlier and I know you have an open door policy, you're very keen on employees at all levels of the company disagreeing with you. If they feel strongly, how do you balance that desire for employees to speak up with needing to provide stability as a leader and have a firm goal vision set of values? Yeah, I think um there's a couple of things in that first of all. Um You know, I, I think when people speak up and you have divergent views in the room, it sharpens your logic. And so what I found too often was that people wanted to agree with me versus giving voice to people who were sitting there cos I knew I was one of those people, like I came up in the organization and I would have a contrary view, but I didn't necessarily know whether like the media, like the, the, you know, large media was a place for me to, to voice that. And I want to invite those voices around the table and I want to give voice to the person who sits there and might not actually speak up. And I think that makes us better and it makes us stronger and it makes us sharper. Um But you also have to have a, a, you know, a sense of trust in the organization and people want to know who their leader is to trust them. And so there's a really big part like go back to 2019. I'm a new leader. I'm suddenly working remote, nobody really knows who I am as a CEO, like, how are they going to trust me? And so my comms team has this great suggestion that we do like an open, like open Q Q and a like just take random questions. And for me, it was kind of terrifying because I didn't know what I didn't know. And we're doing it over zoom, but we did that and it built this sense of trust because they learned who I was as an individual. Like, how do I make decisions how do I, you know, what are the values you bring to play when you're asked thorny questions? And I think there's a really large part in leadership about being willing to reveal your character and who you are when you want people to work with you and you want to build trust and alignment and move fast. And I think that was part of the magic that we had going on at Sam and maybe sometimes saying you don't know the answer to a question. 0 100%. Yeah. Oh, like there were so many times and actually, I don't think my leadership loved it either because I would be like, Lance Lance, what do you think about that? And I'd call people in because I mean, it's ridiculous to assum that I am going to know everything and have all the, all the answers I very much believe like, you know, in my leadership team, there are 11 people and I wanted 100% mindshare. So I didn't want my supply chain leader to just talk about supply chain. Like I wanted all of them to weigh in on every aspect of the business and you know, across my leadership team, I had senior directors up to evps and you couldn't actually tell who had what role because actually title is really irrelevant. Like you're there, you, you earned that seat. Now, I expect you to engage like, and I want all of your, all of your mind share. Does anyone have a question for k if not, I have many, many more. OK. I, I will continue for now but if you have a question, please just raise your hand and I will aim um to come to you. Um You mentioned earlier that you, when you were appointed to a new job, it was part of a rare really women to women ceo handover. It shouldn't be rare in this day and age. But sadly, it, it still is. And I wonder what would your advice be to other companies who want to cultivate a similarly deep bench of female executive talent? I think we need to open up the perspective of what leadership looks like. So, you know, I give a lot of credit doug for like, I don't think I'm a traditional leader. I remember when I stepped into the role, someone saying to me like, oh, you need to, you need to behave like this because that's how a CEO behaves. And I was like, oh, I'm, I'm not gonna be a very good CEO because I'm just gonna be me. Like that's all I can do. I can just turn up and be me and I can do my very best every single day. And that is what I think is required of the role. Not that I have like some big like flouncy, like ego and you know that I, I don't know that I perform like a CEO does. And you know, I think I've had the most wonderful professional four years of my life. Like, I think the last four years after us as leaders to step up and, you know, um going through all the social unrest, going through COVID, going through, like even just the, you know, the challenges of inflation, um you know, hyper growth that we went through, there was just, it called for a lot in us And I think we have to expand that view of the, of our leader can look very different these days. It doesn't look like historical views of what leadership look like. And you said earlier, we touched on wanting people to speak up in the company. How do you, what tangible steps can you take to make that happen? Because I think we hear a lot these days that people saying they want their employees to bring them wholesales to work and to be candid, it's another thing as a worker to feel like you can do that without being penalized. So when you're thinking about setting the culture now at Walmart International, what tangible steps are you taking to create that ethos? Yeah, I think first of all, the first conversation I had with my team was all around expectation around you will have an equal seat. So I think that's important. And then I, you know, I, you know, I reflect back when I left Sam's club, I got, you know, a bunch of emails and letters from people to say, you know, congratulations and the stories that they um shared, you always think as a leader that the things that you do that are important are the strategy that you bring or the vision that you have or the growth that you enable or the big bold moves that you make. Um and um the things that people pointed out was like, I had one guy say to me, you know, remember that day we were in the meeting and we were, you know, we were tasting samples and you stopped the room and asked why I didn't have one. And um, then I, I laughed it off because I, you know, I, I was the most junior person in the room and then the meeting carried on and then you got up and went and got a sample and brought it to me to eat. He said I felt seen and I felt like valued. Do you know how like it was those stories that those very human touch stories that people wanted to share? That's why they felt they had permission to speak. And I think it's, it is, it's about just like bring people to the table, ask them like notice who's not talking, notice who's like, like dwelling on their thoughts and trying to think and you know, engage and bring and invite them in. I mean, that's, it's really simple final question. And then we have to wrap. Um, Jack mcmillan, he ran Sam's Club, he ran Walmart International. You're following in his footsteps. Would you like to be Walmart's CEO one? You know what? I have the biggest job in front of me right now. And as I said before, every day, do you absolutely best. So, but thank you so much, Matt. That's a good thank you.