Start With Why

PART 5 
THE BIGGEST 
CHALLENGE 
IS SUCCESS 

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194 

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195 
11 
WHEN WHY GOES FUZZY
Goliath Flinched
"A lot of what goes on these days with high-flying companies and 
these overpaid CEOs, who're really just looting from the top and 
aren't watching out for anybody but themselves, really upsets me. 
It's one of the main things wrong with American business today." 
This is the sentiment passed down from the founder of one of the 
most vilified companies in recent history.
Raised on a farm in America's heartland, he came of age during 
the Great Depression. This probably explained his predisposition for 
frugality. Standing five feet nine inches and weighing only 130 
pounds when he played football in high school, Sam Walton, the 
founder of Wal-Mart, learned early the value of working hard. 
Working hard leads to winning. And as the quarterback on his high 
school football team, he won a lot. In fact, they went on to become 
state champs. Whether through hard work, luck or just an unflap-
pable optimism, Walton got so used to winning all the time that he 
couldn't fully visualize what losing looked like. He simply couldn't 
imagine it. Walton even philosophized that always thinking about 
winning probably became a self-fulfilling prophecy for him. Even 

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START WITH WHY 
196 
during the Depression, he had a highly successful paper route that 
earned him a decent wage for the times.
By the time Sam Walton died, he had taken Wal-Mart from a; 
single store in Bentonville, Arkansas, and turned it into a retail 
colossus with $44 billion in annual sales with 40 million people 
shopping in the stores per week. But it takes more than a competi-
tive nature, a strong work ethic and a sense of optimism to build a 
company big enough to equal the twenty-third-largest economy in 
the world.
Walton wasn't the first person with big dreams to start a small 
business. Many small business owners dream of making it big. I 
meet a lot of entrepreneurs and it is amazing how many of them tell 
me their goal is to build a billion-dollar company. The odds; 
however, are significantly stacked against them. There are 27.7 
million registered businesses in the United States today and only a 
thousand of them get to be FORTUNE 1000 companies, which these 
days requires about $1.5 billion in annual revenues. That
1 
means 
that less than .004 percent of all companies make it to the illustrious 
list. To have such an impact, to build a company to a size where it 
can drive markets, requires something more.
Sam Walton did not invent the low-cost shopping model. The 
five-and-dime variety store concept had existed for decades and 
Kmart and Target opened their doors the same year as Wal-Mart, in 
1962. Discounting was already a $2 billion industry when Walton 
decided to build his first Wal-Mart. There was plenty of competition 
beyond Kmart and Target, some of it much better funded and with 
better locations and seemingly better opportunities for success than 
Wal-Mart. Sam Walton didn't even invent a better way of doing 
things than everyone else. He admitted to "borrowing" many, of his 
ideas about the business from Sol Price, the founder of Fed- Mart, a 
retail discounter founded in Southern California during the 1950s.

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WHEN WHY GOES FUZZY 
197 
Wal-Mart was not the only retail establishment capable of offering 
low prices either. Price, as we've already established, is a highly 
effective manipulation. But it alone does not inspire people to root 
for you and give you the undying loyalty needed to create a tipping 
point to grow to massive proportions. Being cheap does not inspire 
employees to give their blood, sweat and tears. Wal-Mart did not 
have a lock on cheap prices and cheap prices are not what made it 
so beloved and ultimately so successful.
For Sam Walton, there was something else, a deeper purpose, 
cause or belief that drove him. More than anything else, Walton 
believed in people. He believed that if he looked after people, 
people would look after him. The more Wal-Mart could give to 
employees, customers and the community, the more that employ-
ees, customers and the community would give back to Wal-Mart. 
"We're all working together; that's the secret," said Walton.
This was a much bigger concept than simply "passing on the 
savings." To Walton, the inspiration came not simply from customer 
service but from service itself. Wal-Mart was WHAT Walton built to 
serve his fellow human beings. To serve the community, to serve 
employees and to serve customers. Service was a higher cause.
The problem was that his cause was not clearly handed down 
after he died. In the post-Sam era, Wal-Mart slowly started to 
confuse WHY it existed—to serve people—with HOW it did 
business—to offer low prices. They traded the inspiring cause of 
serving people for a manipulation. They forgot Walton's WHY and 
their driving motivation became all about "cheap." In stark contrast 
to the founding cause that Wal-Mart originally embodied, efficiency 
and margins became the name of the game. "A computer can tell 
you down to the dime what you've sold, but it can never tell you 
how much you could have sold," said Walton. There is always a 
price to pay for the money you make, and given Wal-Mart's sheer 
size, that cost wasn't paid in dollars and cents alone. In Wal-Mart's 

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START WITH WHY 
198 
case, forgetting their founder's WHY has come at a very high human 
cost. Ironic, considering the company's founding cause.
The company once renowned for how it treated employees and 
customers has been scandal-ridden for nearly a decade. Nearly 
every scandal has centered on how poorly they treat their customers 
and their employees. As of December 2008, Wal-Mart faced seventy-
three class-action lawsuits related to wage violations and' has 
already paid hundreds of millions of dollars in past judgments and 
settlements. A company that believed in the symbiotic relationship 
between corporation and community managed to drive for wedge 
between themselves and so many of the communities which they 
operate. There was a time when legislators would help pass laws to 
allow Wal-Mart into new communities; now lawmakers rally to 
keep them out. Fights to block Wal-Mart from opening new stores 
have erupted across the country. In New York, for example, city 
representatives in Brooklyn joined forces with labor unions to block 
the store because of Wal-Mart's reputation for unfair labor practices.
In one of the more ironic violations of Walton's founding beliefs, 
Wal-Mart has been unable to laugh at itself or learn from its 
scandals. "Celebrate your successes," said Walton. "Find some 
humor in your failures. Don't take yourself so seriously. Loosen up 
and everybody around you will loosen up." Instead of admitting 
that things aren't what they used to be, Wal-Mart has done the 
opposite.
The way Wal-Mart thinks, acts and communicates since the 
passing of their inspired leader is not a result of their competitor 
outsmarting them either. Kmart filed for Chapter 11 bankruptcy
protection in 2002, and then merged with Sears three years later. 
With about $400 billion in annual sales, Wal-Mart still sells more 
than six times as much as Target each year. In fact, looking beyond 
discount retailing, Wal-Mart is now the largest supermarket in the 
world and sells more DVDs, bicycles and toys than any other 

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WHEN WHY GOES FUZZY 
199 
company in America. Outside competition is not what's hurting 
their company. The greatest challenge Wal-Mart has faced over the 
year comes from one place: itself.
For Wal-Mart, WHAT they do and HOW they are doing it; hasn't 
changed. And it has nothing to do with Wal-Mart being 
"corporation"; they were one of those before the love started decline. 
What has changed is that their WHY went fuzzy. And we all know 
it. A company once so loved is simply not as loved any-
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more. The negative feelings we have for the company are real, but 
the part of the brain that is able to explain why we feel so negatively 
toward them has trouble explaining what changed. So we rational-
ize and point to the most tangible things we can see—size and 
money. If we, as outsiders, have lost clarity of Wal-Mart's WHY, it's 
a good sign that the WHY has gone fuzzy inside the company also. 
If it's not clear on the inside, it will never be clear on the outside. 
What is clear is that the Wal-Mart of today is not the Wal-Mart that 
Sam Walton built. So what happened?
It's too easy to say that all they care about is their bottom line. All 
companies are in business to make money, but being successful at it 
is not the reason why things change so drastically. That only points 
to a symptom. Without understanding the reason it happened in the 
first place, the pattern will repeat for every other company that 
makes it big. It is not destiny or some mystical business cycle that 
transforms successful companies into impersonal goliaths. It's 
people.
Being Successful vs. Feeling Successful
Every year a group of high-performing entrepreneurs get 
together at MIT's Endicott House just outside Boston. This 
Gathering of Titans, as they call themselves, is not your average 
entrepreneurial conference. It's not a boondoggle. There's no golf, 
there's no spa and there are no expensive dinners. Every year forty 

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START WITH WHY 
200 
to fifty business owners spend four days listening, from early in the 
morning until well into the evening. An assortment of guest 
speakers is invited to present their thinking and ideas, and then 
there are discussions led by some of the attendees.
I had the honor of attending the Gathering of Titans as a guest a 
few years ago. I expected it to be another group of entrepreneurs 
getting together to talk shop. I expected to hear discussions and 
presentations about maximizing profits and improving systems. But 
what I witnessed was profoundly different. In fact, it was the 
complete opposite.
On the first day, someone asked the group how many of them 
had achieved their financial goals. About 80 percent of the hands 
went up. I thought that alone was quite impressive. But it was the 
answer to the next question that was so profound. With their hands 
still in the air, the group was then asked, "How many of you fed 
successful?" And 80 percent of the hands went down.
Here was a room full of some of America's brightest entrepre-
neurs, many of them multimillionaires, some of whom don't need to 
work anymore if they don't want to, yet most of them still didn't feel 
like they had succeeded. In fact, many of them reported that they'd 
lost something since they started their businesses. They reminisced 
about the days when they didn't have any money and were working 
out of their basements, trying to get things going. They longed for 
the feeling they used to have.
These amazing entrepreneurs were at a point in their lives where 
they realized that their businesses were about much more than sell-
ing stuff or making money. They realized the deep personal 
connection that existed between WHAT they do and WHY they 
were doing it. This group of entrepreneurs gathered to discuss 
matters of WHY, and at times it was quite intense.
Unlike the typical Type-A-personality entrepreneurs, the Titans 
were not there to prove anything to each other. There was a feeling 

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WHEN WHY GOES FUZZY 
201 
of immense trust rather than ruthless competition. And because of 
this feeling, every member of the group was willing to express vul-
nerability that they probably rarely let show the rest of the year. 
Over the course of the event, every person in the room would shed a 
tear or two at least once.
It doesn't interest me to write about the idea that money doesn't 
buy happiness, or in this case, the feeling of success. This is neither 
profound nor a new idea. What does interest me, however, is the 
transition that these entrepreneurs went through. As their com-
panies grew, and they became more and more successful, what 
changed?
It is easy to see what they gained over the course of their careers—
we can easily count the money, the size of the office, the number of 
employees, the size of their homes, market share and the number of 
press clippings. But the thing they had lost is much harder to 
identify. As their tangible success grew, something more elusive 
started to dissipate. Every single one of these successful business 
owners knew WHAT they did. They knew HOW they did it. But for 
many, they no longer knew WHY.
Achievement vs. Success
For some people, there is an irony to success. Many people who 
achieve great success don't always feel it. Some who achieve fame 
talk about the loneliness that often goes with it. That's because suc-
cess and achievement are not the same thing, yet too often we mis-
take one for the other. Achievement is something you reach or 
attain, like a goal. It is something tangible, clearly defined and mea-
surable. Success, in contrast, is a feeling or a state of being. "She feels 
successful. She