Chris Grouchy (00:05):

Hey, everyone. Welcome to another episode of the Legends of Retail Podcast. My guest today is none other than Dave Cheesewright. Dave was the CEO of Walmart International from 2013 to 2018. This episode that we recorded is an MBA of sorts for people who want to understand how to succeed at running a Fortune 100 company. In this episode, we talk about Dave's approach to work-life balance, the real job of an executive, and how he thought about setting Walmart International's strategy. We also talk about Flipkart and Jet.com, and Dave shines a light on his decision-making process around Walmart's M&A activity while he was there. This was a fun episode to record. Dave was very generous with this time, and I do hope you enjoy. Thank you.

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(00:59):

Dave, thanks for joining.

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David Cheesewright (01:01):

Oh, you're welcome.

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Chris Grouchy (01:02):

Well, I wanted to just quickly start with a question to break the ice here, which is what did you have for breakfast this morning?

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David Cheesewright (01:09):

Well, breakfast, I had some Fiber One and some muesli and a smoothie. How healthy am I?

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Chris Grouchy (01:17):

Very healthy. That sounds great. And so now that we're kind of rolling here, I admittedly asked a mutual connection of ours, your son and my close friend Jack, for a couple of questions. And he wanted me to ask about your experiences in your early days about being an athlete. He said, "My dad was an elite runner and rugby player back in the day." And so I'd love to ask you, were there any lessons you learned from sport early on in life that you later applied to business?

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David Cheesewright (01:51):

Oh, I think definitely. I mean a sport has been often used as an analogy for the workplace. As you said, I did a mixture of individual sports and team sports. And I think particularly there are lots of leadership lessons around sport, and particularly with retail. I mean it's interesting on reflection. I think retail's a good place for sports people. It's very measurable. You wake up every morning. The first thing you see is results, the sales numbers from yesterday. Sometimes they're good. Sometimes they're bad. Still have to get out and play the next day.

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Retail's a mixture of team and individual. There's times when you have to work hard yourself. There's a lot of times, given the number of people involved, that you have to get things done through other people. You have to rely on them. You have to trust them to do their job better than you could ever do, which would be true of lots of sports. And I think the other thing is there's a lot of satisfaction, particularly in team games and sports, around good performances. Sometimes they may not necessarily be winning, but a team working together and achieving something I think is more fulfilling than simply doing things on your own. So yeah, multiple lessons from sport that I've carried through into leadership and life in general.

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Chris Grouchy (02:55):

And if I just kind of double-click on that, running is a very individual sport where you're competing against yourself, and rugby inherently is a team sport. Would you say that you found more enjoyment and fulfillment out of team sports than individual sports?

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David Cheesewright (03:12):

Not necessarily. I think whatever you do gives you different things and kind of keeping the curiosity to take the best out of whatever it is you're doing is really important in life. So running was very quiet space for me. I used to be a long distance runner. I'm no sprinter. And going for a run on particularly if it was in the mountains for an hour or so or longer was just a good time to just switch everything off, forget about what's going on, maybe think about some things, but have some time for yourself. Team sports, on the other hand, were just great social, and rugby was a fabulous social sport. A lot of my friends to this day are guys that I played with during that era, all of those great things about being a team sport. And rugby was a great sport where you played hard and then you partied hard afterwards, and that's a good combination.

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Chris Grouchy (04:01):

Love the work hard, play hard ethos. I want to go a little bit deeper into that because in a talk, you mentioned that you wanted to retire without ever having ever missed a holiday. And when I surfaced that quote to Jack, he mentioned that you were exceptional at being present at home and balancing work despite the obligations of running a Fortune 100 company. So I'm very curious about that. I think a lot of executives actually struggle with this. I do myself. How do you think about setting boundaries at work? What are some practices that you put in place to ensure that you were present with your family when you weren't at work and you were home for holidays and so on?

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David Cheesewright (04:47):

That's a great question. I mean, I think I love a quote which said that "Work-life balance is a flawed concept. There's life and the components of life of which work is one." And I've always believed in that. I think the other thing before we get onto boundaries is to recognize that your work-life balance can be lots of different things. I think some people simplify it as you have to work less hard, but I think you go through stages of your life where it can mean completely different things that there are stages of my life where I might have been in a job that wasn't necessarily great at and I had to work really hard to be successful, and that was what mattered to me at that time. There are other times where I had young kids and I wanted to not miss that and therefore that became important. So I think creating an environment of work-life balance is about giving people permission to do whatever they want, and that may be to work very hard. It may be to pick up the kids every day from school. It can be whatever it is.

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(05:43):

I think for us, probably two things looking back, I think the first point is to be present. It's incredibly easy after a long day at work to get home, and you get to the door and the kids come running up when they're a young age obviously, not Jack these days, but they come running up and you kind of say, "Oh God, just let me have a cup of tea and then we'll play." And I remember a great business coach in Europe once said, "You have to think of yourself a super dad. And that moment when you opened the door..." And he used to recommend you sit in the car, put some music on, psych yourself up to be super dad. So when you walk in the door you have boundless energy for your kids. And he said, "The great thing about it is, particularly when they're young, after 40 seconds or so, they've had the "Dad's home that's really exciting," and they want to go back and play with their toys and then you can have your cup of tea. So I think be present and be involved in whatever it is you're doing would be the first thing.

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(06:38):

And then I think the second thing is boundaries are good, but you have to agree them with the rest of the family. And mine changed over the years with the different jobs, but we would always, with Claire and I in particular, would set a few things in stone. So for me, a lot of the time it was, I'll be working hard during the week, but the weekends are for the family, and I want you to hold me accountable for that. Dinners are really important. So I'll be home for a dinner twice a week. Hold me accountable for that. And as you say, I always wanted to retire having not missed a day's holiday because holiday's for the family and never had a day off sick actually was the other bit. Now I fell on the sickness when I had two days off I think in my working life with a bad back, having decided I'd learn to play ice hockey. So obviously poor judgment there. But I think not just setting boundaries but having the family hold you accountable for them is a really good way of looking at things.

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"Work-life balance is a flawed concept. There's life and the components of life of which work is one."

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Chris Grouchy (07:26):

I love that. And especially love how you are getting buy-in from your family around the boundaries that you ultimately want to set, and basically ensuring that you can be present in those moments that you dedicate towards family time. Otherwise, it's wasted, right? You could be doing something better with your time or if your mind is preoccupied, people will notice that, I think particularly family members. So I love that insight.

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(07:54):

This dovetails into a question that I had around authenticity. It's very important to be authentic at home. It's much easier to be authentic at home. But you've also mentioned in our research that authenticity is an important aspect of leadership. And I'm curious about some life experiences or insights that allowed you to discover your authentic self and be sort of who you are at home the same person you are in business.

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(08:25):

So in researching your background, Dave, we discovered this insight that you've mentioned in a previous talk, which is that an important aspect of leadership is to be authentic. And so I'm curious how you've discovered how to be your authentic self in business in particular. It's much easier to be who you are at home, but in a business setting, I think leaders often struggle with this. So were there any life experiences that allowed you to discover your authentic self and be comfortable being who you are in the context of business?

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David Cheesewright (09:03):

Yeah. I think I mean I would say authenticity is probably the word that stands out amongst really good leaders more than anything else, and I think there's two reasons for that. The first is about energy. I mean big executive roles require a lot of work. They require a lot of your energy. And if you are not being your authentic self, it's tiring. I mean it's really hard to be someone you're not. So trying to find somewhere where you can feel at home is really important.

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(09:30):

Now I'd love to tell you intentionally that I ended up trying to pick a career company that allowed me to be myself. I think I was lucky. But in hindsight, we've already talked a bit about how I think retail is a very good industry for sports people, measurable mixture of team and individual, very practical and down to earth, not all esoteric. But then I think if I think back to the company and the values of the companies I've worked with, whether it's Mars or Walmart, which is where I spent most of my work in life. They felt very comfortable for me. And certainly wherever I went in Walmart world, it wouldn't matter on the cultural differences, but I felt there were people who had similar core values to me, and therefore you found nothing that jarred. So I think the first point is it allows you to use the best of your energy.

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(10:20):

I think the second point then is it's the more senior you get, the more visible you are, and it is incredible how people watch you. And you'll be found out. You can't be someone you're not. So I think it's more a case of being thoughtful about picking an industry, a career, and particularly a company whose values resonate with you that allows you to be yourself than it is trying to... You can't change your authentic self. It is what it is.

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(10:48):

And then I guess the other part of it is I think if you have an element of curiosity about who you are, I would say it took me a long time to properly understand who I am. And certainly every year of my working life, I'd do some sort of, whether it's a Birkman or some other personality assessment. I'd really be passionate about getting 360 feedback and hear what people said about me and try to understand well why I work well with that person, not the other person. So I think learning about yourself is really important in terms of being authentic because you kind of have to be authentic and self-aware. I mean authenticity is not an excuse to be an idiot or to be rude because whoever you are will have different impacts on different people. You need to understand that, and you do need to accommodate that from time to time. But it's really about energy and consistency with people I think are the main reasons to be authentic.

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Chris Grouchy (11:38):

That makes sense. It sounds like awareness is a precursor to authenticity in that if one is able to cultivate this sense of awareness, without maybe knowing who they are deep down or with very limited information around their values, they can begin to feel physiologically when a situation may not be right for them or when they're working with people who may not be aligned to their core values even if those core values aren't legible to the individual. So it sounds like awareness is actually the precursor to authenticity, and as you develop that, you're able to then be confident in your own skin regardless of the context, whether it's home or business.

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David Cheesewright (12:16):

Yeah. I'd agree with that and I think it's amazing. I mean a lot of companies will say we're a values-orientated company, and there's a continuum for how true that actually is. I mean there are plenty of companies who mean well, but the statements just are a piece of paper on a wall that just sits there and someone reinvents every five years. There are others who the majority of the organization knows what they are and can explain them reasonably well. I think that curiosity is about making sure that they form part of what you do on a day-to-day basis.

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(12:47):

And I always felt that particularly with difficult decisions, coming back to a set of personal or company guidelines as a route map for how you make those decisions is really important. And we would talk about values certainly within Walmart that your job is not just to be a leader. I mean people always say, "What's your role in the values?" Well I have to demonstrate the values and act in accordance to values. We would also say that your role is to be a student and a teacher that every day you should be thinking, "Okay, this is a difficult decision. How would the values guide me through this?" So they work for this or do they jar? And if they jar, what's wrong with them? And then once you've learned those things, go teach someone else on it. So we would talk about those words on the wall literally every week and what they mean and how they could be interpreted and how they could be a guide map. So yeah, I think that curiosity is really, really important.

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Chris Grouchy (13:39):

I have sort of a question on not only how you operationalize values that makes a lot of sense to me and they become crystal clear when you are making a difficult decision where perhaps the easy decision is to compromise on values. My question is actually around how do you screen for core values and fit on core values for potential hires that you're looking to make and new employees that you'd like to bring on into the organization. Do you have any litmus tests that you used to screen for compatibility and core values?

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David Cheesewright (14:14):

Yeah, great question. It's amazing how many people who are responsible for interviewing executives, when you say to them, "How do you know this person will fit?" they don't have a good answer. I stumbled on ads at Walmart, and when I came to Canada in 2008 to run Walmart Canada, it was a very male dominated hierarchical organization. And when I went around and talked to executives from other companies, they all said, "I'd never join there, don't like the culture." And so to try and break that down, one of the things we did was I got a lot of the executives, they would take it in turns at our weekly meeting to stand up and we had a session called Getting To Know You, and the aim was bring in a few of those embarrassing photographs of yourself when you were a kid and talk a bit about how you grew up and what made you the person you are.

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(15:02):

And what was fascinating, we ended up, I think we did about 80 in the end, and it was amazing how consistent those stories were. Not everybody had all of these, but you would hear about people coming from humble backgrounds, not much money, learn about the importance of saving for a better life early on. You would hear about the importance of relationships, often family but could be a teacher or some other mentor in shaping their lives. You would hear about sense of right and wrong, either taught by their parents or for whatever reason, but quite a strong sense of justice. And you would also hear competitiveness, sometimes sport, sometimes academics, sometimes music, but competitiveness.

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(15:44):

And so my interview question for executives was, when you cast your mind back before 18, before leaving school and share with me a couple of experiences or people that made you the person you are, and if they played back a couple of those things, it was a pretty good track record that they would like Walmart and Walmart would like them. So I think the point is that's one formula that works. The point is you should be that student, that curious side. You should make it your mission to find out how do you screen for it, what is an effective way of screening for it and constantly look to adapt that.

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Chris Grouchy (16:16):

I love that. And early experiences in life shape not just our positive attributes and values as people but they also shape perhaps even our dark sides and the qualities that we're trying to work on within ourselves. And so you once said, "If you stop trying to get a perfect answer and work on the premise that anything you do improves things is worth doing, then life gets a lot easier." In other words, done is better than perfect. I'm a perfectionist myself and I'm curious if that's something you struggled with throughout your life. And if so, how you've perhaps combated that?

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David Cheesewright (16:59):

I can't honestly tell you I was struggled being a perfectionist, no. I mean some of that is that suits the way I think. I mean I've always been an advocate of a good plan violently execute today is better than a perfect plan tomorrow, get on and do things, or the concept of ready, fire, aim rather than any other way round. You never know what the future brings, and that perfection is content to want to know every answer to every question which they won't do, and it's only when you get moving do you start to see what's going on.

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(17:30):

I think equally I always loved on big problems just taking a rough first cut of it and saying what comes to mind first? And then I would always have kind of a collection of people whose opinions I trusted and sometimes they varied by topic that I would then start to bounce my thoughts off, and you'd learn two things that always happened when you did that. Almost always you'd get some feedback that made you think, "Okay, I'm a little bit off here but if I corrected to there that would improve things." So you'd always have some improvements.

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(17:59):

You also got ownership because people tend not to want to do that because they're worried that if they don't have the fully formed right answer and you end up going somewhere else, people will feel you're indecisive or you don't always know the answer. In my experiences, you have much better buy in if you involve people earlier. If they knew that your idea was stupid and they told you so, that they felt good about that, not making you feel stupid but in being smart and been help provide the solution as long as you build it in.

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(18:27):

So I think again you have to have two things. I think there is absolute value in moving quickly in most things because you can guarantee that other people around you will be moving quickly. I think there's value in not having totally finished solutions because almost always the best solutions are incrementally developed rather than an aha moment. There are always exceptions, and I think there's incredibly value in keeping that kind of curiosity and involving others as you form the right ideas for their buy-in. And obviously it always makes the plan better than one you could have come up with on your own.

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Chris Grouchy (18:59):

That makes a lot of sense. I think it goes against our human tendencies to want consensus and to crave validation when there is some amount of conflict that needs to be had or debate and disagreement that needs to be had between people in order to seek truth. And this is very uncomfortable for people in my experience. And at Convictional, we screen for this in our hiring process. We want people who will openly debate, overcome that fear of being judged or disliked for having conflict about a given topic. And I'm curious if this is something that you developed within your executive team at Walmart and how you went about that, or is it just something that you hire for people who are not conflict avoidant but people who can lean into it in order to get great ideas out of the debate?

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David Cheesewright (19:53):

That's a really interesting question. I think certainly there are people who are different thinkers and they can add to a team, but I think one of the things about strategy is that there is elements of it you can learn. And I always count myself very lucky that I spent my first 10 years at Mars which had a phenomenal graduate scheme. And they taught you lots of the fundamentals of strategy, and one of them was playing devil's advocate. We had in-house coaching where you know were taught that it was your responsibility, if an argument was one side, to take a differing view even if you didn't agree with it because that would stimulate debate and debate made for better decision making.

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(20:31):

Now that's fine but you have to have teams be aware of that. And I remember when I first started at Walmart, I'd be in meetings and they argue me very one sided, and I'd take an opposite view and someone would come up to me at the end and say, "I didn't think you thought that, Dave." And you'd have to explain, I didn't actually but I just thought it'd be a better argument. So the team have to understand those techniques, but the debate does give on some occasions better answers.

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(20:53):

Now the caveat I'd say to that is another lesson on strategy was a fellow who worked as during the UK. He was a McKinsey consultant, and he came to help us do some strategy, and it was a really interesting exercise he did. We brainstormed out a number of statements about where we wanted to take the business. And then he asked us to each vote on them where one was we violently disagree or what 10 was we violently agree or the other way around, I can't remember which way the scale went. And we didn't get the feedback but we came together for the next session and he picked a topic and it was something to do with pricing and he said, "Right, we're going to get into the numbers later but let's debate this topic." And for an hour, we had the most vociferous debate you could imagine on this topic. And he went on to share the numbers, and all of us were eight or more out of 10. In other words, we all agreed on that topic.

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(21:42):

And he used it to make the point that you also have to be selective where you debate. If you primarily agree you are intelligent people, you can always have a debate on things. But you should spend your time on two things. One is, I mean the ones where you all agree, just leave it and go on with it, pick it. You can nuance it as you go forward. Where most of you agree and there's an outlier, let the outlier say their piece and they'll be a far more constructive participant if they've at least been allowed to say why they have a different opinion because quite often it'll be a tactical vote anyway. And then where you spend your time is where the group is genuinely split and one group at one in one.

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(22:15):

And so I think debate is good, learning some of the techniques and having people in there who are different but have the debates selectively because there are too many management teams who spend their entire life debating things that actually they already agree on and not on the things where they genuinely have a difference of opinion that they need to align.

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Chris Grouchy (22:33):

I love that. Having a devil's advocate in strategic decision making seems like a excellent tool and very much a easily applicable tool for dealing with uncertainty. And there's also this element of focus and picking your battles and moving on where there's consensus but really choosing what's worth to spend time debating and digging deep into those decisions. Something that inspired me when we first met was something you said where you mentioned that as CEO of Walmart International, your job was to make three big decisions per year. And I might be off on the number there, but I think it was three to five decisions per year. What advice would you give to an ambitious executive on selecting and making those key decisions?

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David Cheesewright (23:28):

I think it's probably a step before that, which is understanding a lot of people will go into a job and don't really understand what the job is. And one level that can be you've been doing a fairly operational job, you've been promoted to the manager, and you still think the job is being the best operator and therefore you never really delegate or get the best out of your team. I think that Walmart International job was fascinating in I mean it's a very different business. It's being $150 billion of sales a year but spread over 50 businesses in 28 different countries. And so although I'd grown up in package goods in retail and I could probably have a coherent conversation on supply chain or buying or marketing or any of the other areas, I was never going to be there long enough to have an impact on the day to day running of those businesses.

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(24:17):

So early on, one of the biggest challenge in the job was deciding what you thought the job actually was. And in that context, it was three things. It was agreeing a broad strategy for the business that had that nice balance of it was specific enough that it guided people but it was broad enough that it could stand the test of time and allow people flexibility within it. It was hiring great leaders who could get on and execute that. And then thirdly, it was the point you made that there were some pretty big decisions that would come up that you wouldn't be able to debate to a conclusion and ultimately needed someone to decide and the CEO is where the buck stopped. So you had to make some pretty big decisions about typically an international, which markets were you in and which ones should you stay in or which ones should you enter? And so a lot of acquisition works.

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(25:04):

So I think the answer to the question is understand really what the job is. Where can you as the leader in that job add the most value? And then once you've found the area that has the most value, prioritizing the things that make the biggest difference. So I guess the number of the answer is really about you always be rigorously prioritizing, which areas can you add then what are the key topics that can add the most value, because the danger for all of us is we all grew up doing operational jobs and we all end up... It's that classic you end up in a job where you're not doing what you got you there. And unless you continually evaluate what the job's all about, you can end up spending a lot of time doing the wrong things.

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"I think it's probably a step before that, which is understanding a lot of people will go into a job and don't really understand what the job is."

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Chris Grouchy (25:43):

I think there's this sort of cliche in strategy where one should focus on their strengths and not their weaknesses. And I have my own perspective on this, but when you define the job, there might be some bullet points within that job description that actually may overlap with your weaknesses. What do you do in those circumstances where you need to get something done but you may actually not be the best person to do it.

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David Cheesewright (26:13):

There's a lot of content in there. I think strengths and weaknesses, I would be in the camp of you get more out of people by leveraging their strengths than criticizing them for their weaknesses. But I would also always hire people who had that sense of curiosity and lifelong learning that they did not ignore their weaknesses. They weren't trying to fix them, but they got them to the stage where they weren't a disability for them. So you have to be good enough at those things. And most of that, to be honest, is about awareness because for the majority of people, their weaknesses are an inverse of their strengths. So they're always going to be there. I think you just have to know what they are. So if, like me, you like solving big complex problems and your energy levels go down once you think the solution, I have to have people around me who can take the ball and then run with it in execution. So I think generally that's the way you look at things.

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(27:06):

Then I think in terms of how you build the business, it's really important not to forget that talent is three dimensional. And I mean the first dimension's obvious, which is I guess the talent part, talent. Is this executive smart, strategic, good experience, good skills? The other two of the ones people mostly forget, which is you can take a brilliant executive and put him in the wrong job or the right job at the wrong time and they'll fail. So I found increasingly through my career, talent selection was less about who was the best candidate. It was more about who was the right candidate at the right time.

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(27:46):

So starting to build models in your head around what stage is this business at? Is it an early stage where I need innovation and alignment? If you want to use the S-curve where alignment is you just running super fast roughly in the same direction but you're not dotting i's and crossing t's. Is it in a harvesting phase where strategy is set, I want someone to dot all the i's, cross all the t's, extract? Or is it in a decline stage where it needs turning around? Very different type of people needed for those.

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(28:16):

So second I mention is horses for courses, right time, right job for people. And then the third one is the one that's least remembered, which is environment that you can take the right executive and put him in the right job at the right time and he can fail if the environment is not supportive to him, so back to the cultural fit. He may be phenomenally skilled at the job. He may be an innovator when you need an innovator, but if the company culture jars with him, he won't be successful. So how often do you hear people talk at work around I thought this person was an average performer and then I got talking to them about what they do at home and they do extraordinary things in the community and they do this and that. I wish that person came to work.

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(29:01):

I mean I always think that's a great lesson for everybody in a business, particularly retail where you have a large number of employees is if you could get every single person to be the best person they could be for every hour they're at work, I mean boy you wouldn't need to do any leading. You could just let them loose and you'd deliver every plan you ever wanted.

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(29:23):

And it's a bit to do with last model I'll share on this one is I love the model about how to get things done or why things don't get done, which is can do, choose to do, allowed to do. Can do is about capability. Can the person do the job you're asking to do if they've been trained, if they've got the skills experience? Choose to do is about motivation, the incentives in the right place. Allowed to do is about barriers. So does this person not have the right resources? Have you set them an objective where there's someone else who's got a conflicting objective that's stopping them? And the reason that's a great model is most leaders default to one and two. If it's not working, send them on a training program or carrot-and-stick motivation.

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(30:04):

And in my experience, 90% of the time things aren't happening. It's to do with the leader not setting the right environment. They haven't given the right resources. They haven't managed objectives, so there's no conflicts in there. They haven't been clear enough about the objectives, and it's the leader's responsibility. It's often the team of failing not because of their ability but because of the leader's ability. So it was a great model to kind of turn things back on yourself and make sure you've done your part, the leader, to create the environment to let people succeed.

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Chris Grouchy (30:29):

The three-part framework you shared, I guess there was a couple of them in there, but specifically the one on creating the right environment and resourcing problems properly is I think it makes a lot of sense to me in the context of leaders often don't have all of the answers. And so how do they create the conditions and environment such that teams can embrace uncertainty and perhaps apply mental models to solve those problems. And one of those resources that I think is becoming increasingly common inside of organizations is executive coaching. And I'm curious how you utilized executive coaching throughout your career and was that a resource that you encouraged among the teams that you worked with?

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David Cheesewright (31:14):

Well, I have a confession here to make. My wife is an executive coach and has been for 20 years. So I'm her unfinished work in progress. So although I don't realize it most of the time, I'm permanently being coached at home. No, seriously, I mean I think executive coaching is unbelievably important, and particularly if you can find a good coach who... There's lots of different types of coaching. I think a lot of people default to if you like technical or advisory coaches, so that might be someone like me for someone who's in a senior retail position and they can ask me probably questions about most bits of retail and I'd have an opinion on it. Might be right, might be wrong, but I'd have an opinion.

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(31:53):

I think it's the behavioral ones that really add the value and the ones who are sector agnostic, but who are experts in understanding and helping you understand who you are, which helps with a lot of the things we've talked around authenticity and most importantly what impact that will have on other people. And there's a variety of tools that those people use, but I think that journey of understanding yourself better and therefore understanding what impact your style can have on different styles, which you will need in your team, you can't have everybody like you obviously, and how you get the best out of that and how they get the best out of you because it is a two-way conversation, is what behavioral coaching I think can bring.

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(32:32):

And it's again another standard interview question. I wouldn't say I would never, but I'd be pretty loathed to hire any executive who wasn't able to talk about what they've learned through executive coaching because I just find it hard to imagine that a senior executive could be the finished article unless he's got someone helping them with the behavioral side of their leadership skills.

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Chris Grouchy (32:54):

In thinking about operationalizing behavior and performance inside of organizations, one thing that coaching has taught me is that with every person that you work with, there's basically an X axis and a Y axis, and your goal is to find the equilibrium of these two lines. And so on the X axis, you have basically objective performance, right? So what are our quarterly goals? What are our annual targets? And then on the Y axis, you have the human need to provide emotional support to your people and to take care of them. And for every person, where those two lines intersect looks different.

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(33:31):

And so one thing that's been helpful for my coaching is to look at the people I work with and determine where do you fall in this plot, where are the lines going to intersect for you, and then how can I tailor my communication and my style of leadership to what your needs are as a human so that we can get the results that we want and you feel good about it and you're organically bought in. And so I think that's been one of the frameworks that's been really helpful for me.

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David Cheesewright (33:57):

I agree, and I'd call that the willingly and well framework. Willingly is about the emotional intelligence, and well is about performance and process. And I think as well as individuals, it's interesting. I think companies should understand what sort of organization they are. And if I go back to UK days, as there was a willingly business, our whole attitude as we hire for attitude, we train for skill. We want people who can interact with customers. We can teach them how to put boxes on shelves. Tesco's on the other hand was a well business. They were rigorous at process and automation and didn't worry too much about the personality.

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(34:34):

And it's interesting that generally whichever one you are, you kind of aspire to be the other. So we would always look at Tesco's performance and say, if we could just be as disciplined as them, we'd be great. And they would look at us and say, if we had a bit more personality. I think sometimes you just need to decide who you want to be and just align everything behind it. And I always remember, yeah, my favorite was Tescos would clearly want to try and put a bit of personality in their business from time to time, and the register was always the place where these things mattered. So you could get as to where the lineups would be 10 deep at the checkout and the checkout operator is merrily engaging in a chat about how are your kids and isn't it a lovely day and so on, and that person just wants to get out of there. They've been queued up for ages.

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(35:14):

Tescos, I used to do this now and again, but you could go through the express checkout with one car of an orange juice, and you'd put it on the scanner and the lady would not look at you and would say, "Do you need some help with your bag packing, sir?" And you'd say, "No, I kind of think I got that." And it was just an example of if you're not authentic to your organization, that checkout operator was probably very efficient but didn't have the personality or the EQ to recognize that I really don't need help with a bag packing for one can of orange juice, but equally as to have the other downside. So I think pick a route, be authentic to it.

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Chris Grouchy (35:49):

That makes total sense. And we've managed to spend quite a bit of time talking about leadership and self-awareness, and we haven't at all touched upon retail or the future of retail. And so I would love to slowly make our way in that direction before we cap off the conversation, Dave, and one of the questions that I had is Walmart had been through a number of acquisitions, acquiring companies or investing in companies while you were there, and as a business leader, I'm curious about how you evaluated potential opportunities to acquire companies in order to further the goals of your business. And so were there any sort of key lessons that you learned around acquisitions while working at Walmart?

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David Cheesewright (36:37):

I think the biggest learning was to be crystal clear of your overall strategy before you start thinking about acquisitions. So I would argue that certainly in the early days of Walmart International, the kind of strategy was, okay, we've set up an international division. When it started, it was primarily Mexico. And it was almost like the strategy was, well, let's look at areas of the world we're not. Try and find a business that's for sale that looks a bit like us and then buy it and then work out how to integrate it, and Walmart typically owned everything. And certainly when I took over International, the first thing we did was quite a thorough review of whether that was still the right strategy.

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(37:16):

And the conclusions we came to were the US business had had four or five years of pretty poor performance. And what you realize is however important you think International is, it does not move the needle on the US stock price, like the US... 0.1% increase in comp and the US stores business will blow anything I'd ever do in International out the water. So we were going to be a business that was investing in strengthening the US business for the foreseeable future. eCom was already really important and becoming increasingly more important. So we were going to be investing in the American eCommerce business. And therefore International was not going to get investment.

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(37:51):

So we ended up doing a lot of work on the portfolio and concluding that we had three priorities. Number one was anything that makes the US business better had to be the biggest priority. So Canada and Mexico were two very profitable businesses adjacent to the US, actually a lot of common product, common sourcing, but completely unintegrated. So strategy one, start thinking about a strong North American core and how those businesses can leverage off each other to strengthen the US business.

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(38:21):

Then two, International was really about growth. North America was slowing growth. Other markets were growing faster. But when you do the maths, although there's big markets out there, India and China is all that really matters in terms of growth. So priority to them was to say, okay, let's take a long hard look at our businesses in China and in India. India was very small. China was losing money. And let's present the board with absolute, if you want to be successful in these countries, this is what it would take. And so that involved us in the end closing a lot of stores in China, selling our eCom business, which was I think the fourth largest at the time, Yihaodian, into Jingdong. So quite big for Walmart to not be owning everything but the thinking that there's no point being an eCom if you're not in the one of the most successful ecosystems. So we were going to be in someone else's ecosystem and working out how we added value within it, really switching the priority from Walmart stores to Sam's Club, which was much more relevant for the Chinese consumer.

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(39:20):

And then in India, we had 20 stores who was meaningless in the size of India. And the analysis there said you with all the various regulation in India, you're not going to build a national store chain to compete with the likes of reliance. So it's going to be eCommerce, and Amazon is one who obviously not an acquisition, and Flipkart's the other. And then with the rest of the portfolio, we basically went through and said, look, it's either a strong business that's going to generate reliable cash for the future keep, or it's a compromise business where a merger or partnership could make it strong, do something or it's not and sell it. So Argentina sold, Brazil sold. As during the UK, we tried to merge with Sainsbury's. Regulator didn't like that and eventually sold that. And so I think the acquisitions fell out of what the strategy was.

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(40:11):

I guess the other point I'd make on this is it's also worth thinking about... So the Flipkart one was fairly obvious. If you wanted to be big in India and you believe eCommerce was the future and you couldn't get into physical, there was only one target. It was just a question of how much you pay and how you then make it work. I think if you look at US eCommerce, so the acquisition of Jet's an interesting one because people would look at that and say, "Hold on, you paid a lot of money, 3.3 billion for a business that closed down three years later."

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(40:37):

And I think what you miss there is that's probably the largest acqui-hire that's ever been, that Marc Lore and his entire team who built Quidsi first, Quidsi, Diapers.com, sold to Amazon, and then Jet from scratch. It wasn't about Jet. It was about what that group could do to Walmart's eCommerce business. And if you look at the condition that whole Walmart online business was in at the end of Marc's four and a half years, I think you would quite quickly come to the conclusion it was worth every penny.

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I think the biggest learning was to be crystal clear of your overall strategy before you start thinking about acquisitions.

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Chris Grouchy (41:11):

Marc is certainly a legend and someone I look up to in the world of eCommerce in particular. And I believe he has this framework for making decisions called VCP - vision, capital and people - in that if you just have the right vision, the amount of capital needed to execute on it, and you assemble the right people together, value will be created. And I think that that simplicity is just so beautiful.

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David Cheesewright (41:37):

Yeah. And he's one of these rare people that I would argue he's a commercial entrepreneur first who knows enough about to deliver the commercial objectives through tech. He's a rare mix that he's not a out-and-out tech guy. He knows enough about it, but he's got an instinct for what customers want and how to make money from it.

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Chris Grouchy (41:57):

Well, in closing up our conversation, Dave, we are going to move to our rapid fire round. And how it works is I'm going to give you a quick question and you'll give me your immediate thoughts in about one to two sentences or even one word. So are you ready to go?

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David Cheesewright (42:14):

Sure. Fire away.

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Chris Grouchy (42:15):

Awesome. The most exciting opportunity in retail post-COVID?

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David Cheesewright (42:20):

I think application of artificial intelligence. Retail is the classic area where whether it's operations or customers, there's an infinite amount of work and a finite amount of resource, and that is where AI, in combination with humans, I think can make dramatic strides forward.

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Chris Grouchy (42:35):

We're going to have to do a part two interview just on that topic alone, I think. A brand you love and why?

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David Cheesewright (42:41):

It would be Rapha. So I love cycling. Rapha is one of the largest clothing brands in the world. Through a lot of serendipity, I end up working for my favorite brand. So I just love that combination of a brand that's not just about product, although the product's incredibly good, but it's also about community and content. We do a lot of media work as well. So I absolutely love that brand. Incredible loyalty.

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Chris Grouchy (43:02):

That's amazing. Most important lesson in fatherhood?

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David Cheesewright (43:06):

I think prioritize. You can't do everything. As I say, there's no such thing as work-life balance. It's just life, and fatherhood is an incredibly important part of that. So I think be present when you're around and prioritize it because they grow up pretty quick.

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Chris Grouchy (43:23):

Yes. Listen to music in the driveway to shift from work to home and go be super dad. And lastly, Dave, what is the kindest thing someone has done for you?

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David Cheesewright (43:37):

Ooh. Stories could be longer than 2 cents, but I'll tell you a little story. My wife and I decided that on our 30th wedding anniversary would renew our vows, and we mainly as an excuse for a big party and particularly for Claire's mom who was in the last years of her life or last month's of her life actually it turned out. And in Claire's vows, she talked about it's the little things that are the big things. And I think she's absolutely right. So it's really hard to think of one amazingly kind thing, but what I like in my life are people who are not always kind, but who are continuously making small acts of random kindness. And I think it's, when you look at... It's funny because when she said that it always makes you reflect.

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(44:22):

And I realized that lots of my friends and people that I've liked at work, if you look for the commonality and it's not the only one, but they were just people who were kind. They would always have time for you, you know when people who you knew throughout your career, even when you were relatively junior, they'd have time to say hello to you. That might be as simple as that. Or they'd notice that you're having a bad day, or they'd remember it was your birthday or whatever it was. I think it's those lots of small little things that are actually the big things.

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Chris Grouchy (44:51):

I love that. The small things are the big things. What a great note to end on. Dave, this has been an incredible conversation. I think our chat today, my hope is that it is a concentrated MBA for people who want to be better leaders and decision makers in business and at home. And so I'm so grateful for you taking the time to chat with us today, and all the best moving forward. Thank you.

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David Cheesewright (45:17):

I enjoyed the conversation. Some good thoughtful questions. Thank you.

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Chris Grouchy (45:20):

Thanks, Dave.

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(45:26):

Hey, everyone. Thanks for checking out this episode of Legends of a Retail. In this episode, I interviewed Dave Cheesewright, the former CEO of Walmart International. I find Dave to be a Jedi master when it comes to decision making, executive management and balancing work and family life. How did he do all of this while being so effective? The secrets are sprinkled throughout the episode, but one theme that emerged was the importance of self-awareness. It was continuously clear to me throughout the recording that Dave learned to cultivate self-awareness in order to make better decisions and to respond productively under pressure. We can't predict all of life's situations and scenarios and hardships, but we can start to learn a little bit more about who we are when we are faced with stressors.

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(46:21):

And so if you can read your own inner computer programming, you can begin to operate at a higher level. And I loved Dave's three-question framework for mobilizing talent. If you missed it in the interview, here's the framework: can do, choose to do, allowed to do. That translates to what can I do, what do I choose to do, and what am I allowed to do? What Dave shared is that most leaders try to fix number one and number two when there's a problem with their people at work. But oftentimes, people's uncertainty or lack of performance comes from not knowing what they are allowed to do. And this not knowing what I'm allowed to do question causes them to fail. So to make people successful, to mobilize talent, we need to do the following. We need to define the role, we need to define what's important, and we need to define the boundaries for decision making. And if we do this, people are clear, and if you give them autonomy, they will make great decisions without you needing to be in the room.

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(47:34):

Lastly, I loved Dave's perspective on work-life balance and it being a flawed concept. Work is a part of life. It needs to be managed. Something that Dave said that I found to be interesting was that he asks his family to hold him accountable to his boundaries around work and life. He wanted to be home for X number of dinners per week, and so he asked his partner to hold him accountable to that standard. And if it's not already clear, it's impressive to me that Dave is someone who wants to be held accountable externally to the standards of the performance that he wants to operate at. Consider having your partner, your friends, your kids, hold you accountable to the standards you have for being a better parent, a better friend, or a better partner.

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(48:28):

Thanks for listening. Make sure to subscribe on Spotify, Apple Podcasts, or wherever you find and listen to your podcast. If you have any questions or just want to chat about this episode, feel free to shoot me an email. I'm at chris@convictional.com. That's chris@convictional.com. Thank you and see you next time.