Channeling his inner Sam Walton this week, Walmart CEO Doug McMillon rattled the company with the unexpected appointment of a relatively unknown newcomer to replace Bill Simon as CEO of its largest and most profitable division.
During his leadership of the company Walton was known to disrupt the executive ranks by regularly placing leaders in new and unfamiliar roles in a practice that came to be called cross-pollination. Examples abound of executives who moved from one area of the company to another, but several noteworthy instances occurred in the 90’s when former CEO Lee Scott was plucked from his position in the logistic area to lead merchandising or years later when CIO Kevin Turner was named president and CEO of Sam’s Club. U.S.
McMillon took the practice to an extreme this week by naming Greg Foran president and CEO of Walmart U.S. Foran has been with Walmart for less than three years and has enjoyed a remarkable ascension up the executive ranks during that time. He joined Walmart in October 2011 as an SVP in the international division and six months later he was named president and CEO of Walmart China. Earlier this year he was named president and CEO of Walmart Asia. Foran is a veteran retailer, but his entire career has been spent on the other side of the planet.
Whatever Foran did in his various international leadership roles prior to and with Walmart it so impressed McMillon that he has entrusted Foran with leadership of the company’s $279 billion U.S. stores division. The wisdom of his choice may be revealed in the years ahead as was often the case with the curious leadership decisions made by Walton and his successor David Glass.
Then as now, Foran’s appointment brings tremendous uncertainty to those who work for, sell to or compete against Walmart’s U.S. division. Foran represents a real wild card, which may be exactly what McMillon wants considering the U.S. division has struggled of late with same store sales declining for five consecutive quarters and expected to do so again when the company reports second quarter results on August 14. The company is also embarking on an ambitious roll out of smaller format stores and looking to serve shoppers in a uniquely Walmart way with ambitious e-commerce plans that leverage physical assets.
Foran will undoubtedly bring to his new role fresh thinking informed by a global perspective but perhaps more important his decision-making will be unencumbered by familiarity with the U.S. business. McMillon is betting that will be a good thing despite the disruptive nature of the change in the near term.