The statistics on the number of family businesses that do not survive the passing or retirement of the founder are staggering. Most fail, even those that continue operating with a younger family member at the helm.
Success is a tricky equation and Walmart's (NYSE:WMT) is an extraordinary accomplishment on a lot of levels. The world's largest retailer is facing yet another succession. There's a new young chairman, a youthful CEO and the injection of international leadership seems a perfect combination to ensure not just Walmart's ongoing dominance, but its much needed transformation into a modern retailer.
Some 70 percent of businesses fail after the founder steps aside, according to the Harvard Business Review. But more than half a decade after Sam Walton opened his doors, Walmart has grown beyond even his wildest imagination, revenues of $482 billion with $27 billion in profit.
On Friday, Walmart chairman Rob Walton announced his retirement and passed the position to his son-in-law, Greg Penner, as the retailer's next chairman. Penner is only the third person to lead the board since Sam Walton's passing, and it's smart business for Walmart to keep it in the family.
Just like it was smart business to name Doug McMillon as CEO and Greg Foran as president and CEO of U.S. stores. These are people that grew up, so to speak, at Walmart. They spent much of their careers in the culture, but don't seem isolated by it. McMillon, in particular, is proving to be more connected to what the world outside of Bentonville, Arkansas, wants from their retailers. He is implementing change in a way that seems like a natural extension of what Mr. Sam would have wanted.
There are employee-focused changes intended to revive a weary workforce. Wage increases, more relaxed uniforms and control over scheduling might not satisfy all of Walmart's critics, but it is energizing the workforce. Images of store associates carrying McMillon on their shoulders through a screaming crowd at last week's shareholder meeting were meant for the media, but it's hard to fake that kind of enthusiasm.
McMillon is the real deal—his energy and straightforward approach manage to combine a fresh point of view with the company's core values. No one is reinventing the Walmart way, but rather channeling it in a more focused manner.
It will be interesting to watch how McMillon, Foran and Penner innovate at Walmart. Instituting change at an institution such as Walmart is no easy feat, but this group seems up to the task. -Laura