Future of Business: Walmart’s CEO on AI, Jobs, and Managing Rapid Change
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this episode of HBR Ideacast, host Adi Ignatius interviews Walmart CEO Doug McMillon as part of the Future of Business series. McMillon, who started as an hourly associate at Walmart in 1984 and became CEO in 2014, shares insights on leading the world's largest company by revenue through digital transformation, supply chain disruptions, and the integration of AI. (07:00) The conversation explores how Walmart has invested billions in higher wages, lower prices, e-commerce, and technology modernization while maintaining its core purpose of helping people save money and live better.
- Key themes include AI implementation as a growth opportunity, navigating geopolitical uncertainty and tariffs, maintaining purpose-driven leadership while managing profit pressures, and building organizational capabilities for continuous transformation.
Speakers
Adi Ignatius
Adi Ignatius is the host of HBR Ideacast and a senior executive at Harvard Business Review. He conducts interviews with leading CEOs and business leaders as part of HBR's ongoing coverage of leadership and business strategy.
Doug McMillon
Doug McMillon is the CEO of Walmart, who recently announced his retirement for early 2026. He started working at Walmart as an hourly associate in 1984 and became CEO in 2014, leading the world's largest company by revenue with 255 million customer visits per week. Under his leadership, Walmart has undergone significant digital transformation and modernization efforts while maintaining its core mission of helping customers save money and live better.
Key Takeaways
Embrace AI as a Growth Opportunity, Not Just Efficiency
McMillon emphasizes that Walmart approaches AI with an "offensive" rather than defensive mindset, focusing on growth opportunities rather than just cost-cutting. (03:00) He explains that AI presents the chance to revolutionize e-commerce beyond the traditional "search bar and laundry list" experience that hasn't changed much since the 1990s. The company is working toward creating multimedia, personalized, and contextual shopping experiences. McMillon acknowledges that every job will change in some way due to AI, from parking lot attendants to technologists, but believes this will create new opportunities while eliminating certain tasks. To prepare employees, Walmart has provided ChatGPT licenses to all associates and implemented learning tools to help them adapt and grow alongside the technology.
Build Organizational Capability for Constant Change
McMillon learned that successful transformation requires setting up the company to change continuously, not just once. (14:21) When he became CEO, Walmart was running negative comps and had minimal e-commerce presence. Rather than overwhelming employees with endless change initiatives, the leadership team identified what wouldn't change: their timeless purpose, core values, and culture of respecting individuals and serving customers. Everything else was declared "open for change," including potentially eliminating stores if customers didn't want them. This approach led to understanding that digital transformation required fundamental changes in how the company worked, including adding design capabilities, product management, and putting customers in charge while working backwards to build appropriate technology.
Delegate Decision-Making During Crisis
The COVID-19 pandemic taught McMillon to trust his associates' judgment and delegate more decisions rather than centralizing control. (09:44) Before the pandemic, leadership operated on weekly and monthly cadences, but crisis demanded daily decision-making about safety protocols, supply chain management, and community services like COVID testing. Rather than waiting for perfect information, McMillon's team was forced to delegate choices to capable associates with instructions to act quickly and report back on decisions made. This approach revealed that associates consistently made excellent decisions under pressure, whether managing inventory during supply chain disruptions or adapting to tariff changes by shifting country of origin and production timing.
Maintain Front-Line Connection Despite Scale
McMillon emphasizes that staying connected to front-line operations is "vital" for effective leadership, following Sam Walton's tradition of constant store visits. (21:58) He conducts surprise visits to stores and clubs 99% of the time without advance notice, traveling to markets in the US, Mexico, Canada, and China to speak directly with associates helping customers or fulfilling e-commerce orders. These visits consistently generate actionable insights and to-do lists that benefit the entire company. This hands-on approach provides real-world perspective that informs strategic decisions and helps maintain connection to Walmart's operational reality across its massive scale.
Balance Purpose with Profit Through Long-Term Investment
McMillon demonstrates how purpose-driven companies can maintain values while managing profit pressures through strategic long-term investments. (06:46) When he became CEO, Walmart simultaneously invested billions in higher wages, lower prices, e-commerce, and technology modernization, reducing operating income from over 8% to just above 4%. These investments were funded by shareholders rather than customers, with the Walton family and board supporting reduced short-term profitability for future positioning. The strategy worked because their evolved business model, including e-commerce, membership, and advertising opportunities, eventually allowed them to restore operating income percentages while continuing to invest in wages and maintain low prices.
Statistics & Facts
- Walmart has 255 million customer visits per week, making it the world's largest company by revenue and biggest private employer. (01:29) This statistic demonstrates the massive scale and influence of Walmart's operations globally.
- More than two-thirds of what Walmart sells in the US is made or grown domestically, with the remaining third sourced from over 100 countries including China, Mexico, Canada, and Vietnam. (11:32) This diversification helps Walmart manage tariff risks and supply chain disruptions.
- Walmart employs 2.1 million associates around the world across 19 countries. (19:47) This massive workforce requires significant investment in training and development programs, especially as the company transforms with AI and digital technologies.
