CEO Scott Praised, Cautioned On Wal-Mart Turnaround

Tuesday, 20 Feb 2007 | 3:00 PM ET

Wal-Mart Stores topped Wall Street expectations with its 9.8% jump in fourth-quarter profit. So why would anyone want CEO H. Lee Scott to quit? Consultants William Marquard and Michael Bergdahl joined "Power Lunch" to explain -- and perhaps refute -- that line of thinking.

Marquard is the author of "Wal-Smart: What it Really Takes to Profit in a Wal-Mart World" and is co-founder of Marble Leadership Partners, which has counted McDonald's, Walt Disney, the U.S. Department of Homeland Security and yes, Wal-Mart among its clients. He is in no hurry to have the CEO ousted.

Should Lee Go?
Discussing whether now is the time for Lee Scott to leave Wal-Mart, with Michael Bergdahl, What I Learned from Sam Walton & The Ten Rules Of Sam Walton author; William Marquard, Wal-Smart: What it Really Takes to Profit in a Wal-Mart World author and CNBC's Sue Herera

Marquard maintains that Scott "inherited" baggage including a market multiple that "got well ahead" of the stock and the company's growth. However, the consultant says Scott has presided over a resurgence of the firm's former "productivity loop" and "strong process organization" -- which has helped reverse the six-year downward trend in Wal-Mart's overall-sales growth rate, lifting it to 11.7% from 9.5%. But he cautions investors and C-level executives alike: Scott must maintain focused on "returning to those roots" to sustain today's good news.

Bergdahl agrees. He is co-author of "The Ten Rules Of Sam Walton" -- and served as Walton's motivational "Director of 'People'" at Wal-Mart. He told CNBC's Sue Herera that the world's biggest retailer enjoyed "record sales and revenues" in 2006, and that even if its U.S. growth is slowing, the chain store is soaring globally.

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  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

  • Tyler Mathisen co-anchors CNBC's "Power Lunch." Mathisen also co-anchors "Nightly Business Report produced by CNBC."

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Kenny Polcari