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Power Lunch

CEO Scott Praised, Cautioned On Wal-Mart Turnaround


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?

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.