BENTONVILLE, Ark. -- The man who runs the world’s largest retailer, a company so big it’s a bellwether for the U.S. economy, looks to a rural area 30 miles south of Atlanta when he ponders the people and values that landed him in the office where American icon Sam Walton once sat.
It’s been about a year since Michael Duke was named the fourth CEO in the history of Wal-Mart Stores. From the same wood-paneled office where Walton grew the company from a regional discount chain into a global powerhouse, Duke presides over its still-expanding empire: 8,291 stores in 15 countries; 2.1 million employees (it added 22,000 jobs in the U.S. this year); an estimated $401 billion in net sales in 2009.
Duke, 60, says he might not be CEO today had he ignored the sage advice dished out long ago by his Fayette County High School physics teacher, a man he still refers to “Mr. McDaniel.” Go to Georgia Tech, the teacher told him. Major in industrial engineering. And — most importantly — don’t go to work in manufacturing like all the other industrial engineers.
“ ‘Go to work in the service industry. That’s the future of opportunity in America,’ ” Duke recalls his teacher telling him. “Back in 1967, it’s amazing how wise that was.”
That bit of career guidance has taken Duke a long way, from his rural Georgia childhood to Tech to a retail career that began at Atlanta’s Rich’s Department Stores and has led to the pinnacle of the retail world.
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For the CEO of a corporation that makes news daily, Duke is a very private man. He doesn’t do many interviews. But he agreed recently to talk about his life and his Georgia roots during a 40-minute chat withThe Atlanta Journal-Constitution in his office at Wal-Mart headquarters, a low-slung, no-nonsense warehouse of a structure in the northwest corner of Arkansas.
Duke is tieless as he settles in behind a large, plain wooden desk. Behind him is a framed world map and simple veneer shelves brimming with sports paraphernalia and family photos. Overhead are a suspended-tile ceiling and fluorescent lighting. It could be your high school principal’s office, only that would be flashier.
Understatement was a hallmark of Walton, who died in 1992, three years before Duke joined the company. It’s an attribute that’s been passed on to those who have succeeded Walton in the CEO’s office, even as the company has expanded exponentially.
A competitive fire
Duke might be the ultimate “small-town Georgia boy makes good” story. Except he didn’t even come from a small town. His working-class family, one generation removed from the farm, lived about 8 miles outside Fayetteville in an area locals just called “the county.”
Born on Pearl Harbor Day 1949, Duke’s youth revolved around three younger sisters, a father who drove a local route for a trucking company and a mother who spent her days chasing children and helping tend a huge garden that produced much of the family’s meals. The Dukes had a huge extended family, and attended Ebenezer United Methodist Church.
“That small rural church had some wonderful people, Sunday school teachers and pastors who all had an influence on my life,” Duke said.
His first boss was his father, his first paying job taking care of his great-grandmother, who lived nearby. For a dollar a day, he fetched her meals and kept her company. As Wal-Mart CEO, he now makes more than $12 million a year in salary and stock options.
Duke said his parents stressed hard work, family togetherness and faith. Family vacations were rare.
“There weren’t a lot of financial resources or time,” he said. “Even my dad’s vacation time was spent fixing up the house or farming.”
Early on, Duke developed a love of sports. At Fayette County High School, where his 1967 class numbered 84, he played baseball and football, and as a 160-pound combination receiver/linebacker, was captain of the football team during his senior year.
“It was more desire than it was talent,” he said of his sports career. “I probably went into sports with a sense of competitiveness and came out of it even more competitive.”
During his senior year awards ceremony, Duke won both the Sportsmanship and Headhunter awards, the latter given to the player considered the toughest on the team.
“I said, ‘That’s pretty good. You can be a sportsman and a headhunter. You can be competitive and you can also play the game right.’ ” He still keeps both awards on his desk at home. “I think they become symbolic, somewhat, of who you are and what’s important to you.”
Duke realized he had neither the size nor talent for a major college team. So he took his physics teacher’s advice and filled out an application for Tech.
“I only applied to one school,” Duke laughed. “So it’s a good thing I got in.”
While at Tech, Duke met his wife, Susan, at a dance when he offered to help her find a contact lens. After a short long-distance courtship — she attended college in Pennsylvania — the two were soon wed. Thirty-eight years later, they still are.
Their life together began on humble terms. In Atlanta, while Duke continued at Tech, Susan got a job at Coca-Cola headquarters nearby. Their “big meal of the day” was sharing a “gigantic” 35-cent lunch in Coke’s cafeteria.To help make ends meet, Duke worked on a loading dock and delivered newspapers in the pre-dawn hours for The Atlanta Constitution.
A car aficionado, Duke beams when asked if he remembers what car he drove back then.
“1967 Chevelle Super Sport,” he said, yellow with a black top. His father had bought it for him so he could work and pay for school. “396 engine, 350 horsepower, four-speed,” he continued. “Not that I remember the details.”
Those close to Duke are quick to talk about his love of cars and speed. Today, Duke sheepishly confesses that he drives a sleek black Porsche 911.
“I would never speed,” he says, grinning widely, “but I enjoy getting there quicker than I would otherwise.”
It was partially his love of speed that drew him to retailing after graduation, when he spoke with an interviewer about a job with Rich’s Department Stores.
“What really got me ... was how he talked about the speed and competition,” Duke said. “He said, ‘There’s no business that moves at the speed of retail or is as competitive.’ I said, ‘I love competition and I love people and I love things that move fast.’ So it seemed to be a good fit.”
Duke spent his first years at Rich’s in learning to manage stores, moving to logistics about 10 years into his career. In all, he spent 23 years at Rich’s and its later incarnations, Federated and May Department Stores.
“I actually think it’s better I started by being close to customers,” Duke said. “That foundation early on helped me later when I went into logistics and other kinds of management.”
‘Challenges are immense’
Duke took the Wal-Mart reins from Lee Scott, who had hired Duke in 1995 to oversee the company’s logistics. Logistics simply means getting products from producers and into stores as cheaply as possible. It is one of Wal-Mart’s core competencies, and one honed to a fine edge by Duke before he took over the company’s international operations on the way to the top job.
New York-based retail consultant Howard Davidowitz, who knew Walton personally, said Duke brings a different perspective to Wal-Mart than the CEOs who preceded him. He’s the first Wal-Mart leader who never worked directly with the founder.
Walton liked crowded, “messy” stores, Davidowitz said. Duke will continue initiatives to create wider aisles, better lighting and fixtures that are more friendly to senior shoppers. Walton surrounded himself with a group of Wal-Mart executives known as “the boots,” many of them non-college graduates with a penchant for cowboy boots. Scott purged many of the boots during his tenure, clearing the way for Duke to take over a company largely cleansed of their influence.
“I personally think he’s a good choice, because the company is going through a transition,” Davidowitz said. “International is becoming much more important, a much larger percent of the company’s growth, and Mike Duke knows international.”
Duke faces serious challenges managing a company getting so big it is difficult to steer, while facing more nimble competitors, Davidowitz said.
“Wal-Mart is gigantic,” the analyst said. “It’s the largest private employer in the U.S. The challenges are immense.”
Those who know Duke say his mix of people skills, logistics savvy and business toughness make him a good fit for his job, which comes with responsibility for all that is respected and reviled about the retail giant. Some analysts have equated running Wal-Mart to governing a small country.
Dave Gary, now a Dallas consultant, worked with Duke at Rich’s in Atlanta after college. The two have remained close for 40 years.
“When you see Michael coming you know the glass for him is more than half-full,” Gary said. “He’s attentive and conveys the sense to everyone they are valuable and important. He’s extremely positive.”
He’s taken on the CEO’s job at Wal-Mart after a decade in which the company has experienced both remarkable growth and ongoing battles with labor unions and environmentalists.
Under Duke’s predecessor, Wal-Mart rolled out $4 prescriptions, improved health care for employees and began a series of “green” sustainability initiatives.
Fans praise the company for providing a huge array of consumer goods at reasonable prices and badly needed jobs. Critics paint it as menacing giant, intent on busting unions and running roughshod over anyone who stands in its way.
“There are many, many more people who love us,” Duke contends. “That small minority that might disagree; it’s typically because they do not know us. The people who know us as customers end up being our biggest supporters.”
Duke doesn’t hesitate when asked how long he’d like to stay at the helm of Wal-Mart.
“I’ve been in the job about a year,” he said. “I don’t think, ‘ When will this end?’ I think about how much opportunity there is.”
The Michael Duke file
Title: CEO, Wal-Mart
Hometown: Fayette County
Residence: Rogers, Ark.
Education: Fayette County High School, 1967; B.S. Industrial Engineering, Georgia Tech, 1971
Family: Wife of 38 years, Susan. Three grown children and five grandchildren.
Hobbies: Sports cars and golf (13 handicap)
Duke factoid: He gets back to Georgia to see family and friends about three times a year. He’s a huge Georgia Tech Yellow Jackets fan and plans to travel to the Orange Bowl in Miami this year.
Wal-Mart CEO Michael Duke speaks on:
When the bad economy might turn around
“I wouldn’t want to predict it. I spend my time being a retailer, not an economist. Our customers still feel it. We will know when we can tell from our customers.”
Gaining market share during the downturn
“We have gained customers for sure during the last couple of years. We have increased traffic. We have been able to take market share, and that’s true around the world.”
Possible acquisitions on the horizon
“We always look at the opportunity to serve more customers. In international markets, we have a history of doing some acquisitions. We never talk about specifics, but part of our growth strategy in international is growing same store sales, building new stores and, where appropriate, doing acquisitions.”
The legacy he would like to leave
“ I’d want Sam Walton to be proud. I came here because of the culture of the company and what we stand for ... the basic beliefs and values of our company. Do we serve more customers? Do we help out around the world with people living better? Do we make a difference in issues like sustainability and health care?”
How we got the story
In the year since Michael Duke was named Wal-Mart’s new CEO, little had been reported on his Georgia roots. So the AJC sent business profiles writer Jim Tharpe to Bentonville, Ark., where he had an exclusive 40-minute interview with Duke at his office at Wal-Mart headquarters. Tharpe also carried out extensive background research on Duke and Wal-Mart, interviewed friends, former colleagues and company analysts.