Wal-Mart’s Man With a Mission

By Eve Tahmincioglu

Mar. 3, 2005

Pepsico inc. executive Ron Parker recalls what it was like to stroll through one of the company’s California bottling plants a decade ago with the senior operations chief and to hear rank-and-file employees holler out the guy’s name with affection and respect.

    “You got a chill hearing that,” Parker says.

The well-liked executive was Lawrence V. Jackson, a corporate star who in 2002 was named one of Fortune’s most influential black executives and was hired in October to be Wal-Mart Stores Inc.’s chief human resource officer. As the leader of the biggest private workforce in the world, at 1.5 million employees, he’s going to need that kind of respect.

    Faced with monumental class-action sex discrimination and wage lawsuits, continued rapid growth and escalating union-organizing activity, Wal-Mart’s new chief people officer will have to be a peacemaker with a tough bottom-line business approach, analysts say.

    In November 2003, the company launched an Office of Diversity. Jackson, who reports directly to CEO Lee Scott and meets with him daily, is now in charge of the company’s diversity effort. As executive vice president of Wal-Mart’s people division, Jackson is also responsible for planning, training, executive development, recruiting, succession planning, human resources technology, culture change and regulatory issues.

    “The biggest problem at Wal-Mart is its extremely tight company culture,” says Brad Seligman, the attorney spearheading the class-action discrimination lawsuit. “I’ve been told by people inside that it’s very hard for an outsider to come into Wal-Mart, and it takes a long time to get assimilated and to assimilate.”

    But several people who’ve worked with Jackson say the 51-year-old Harvard MBA may not have any real experience in human resources, but he just might be the right person for the Herculean job.

    He’s a man who defines himself as a kid from a poor background who learned leadership skills at an exclusive private military high school, an admired manager who is known for an impatient, in-your-face style, a veteran of operations who is a master at schmoozing. It’s a skill he’s put to use at tasks ranging from driving out unions at Pepsico to boosting revenues at Safeway Inc.

    Management consultant Price Cobbs, who has known Jackson for 15 years and included him in a book he co-authored, Cracking the Corporate Code: The Revealing Success Stories of 32 African-American Executives, refers to Jackson’s confrontational style by saying, “Sometimes in meetings the brother (Jackson) would go off.

    “He brings a level of passion to his work that is admirable but at times it needs to be dialed down.”

    On the other hand, Cobbs describes Jackson as an “astute politician” and “master networker” who instills trust in employees, managers and board members. Adds Parker, now senior vice president of human resources for Pepsico’s Frito-Lay division, North America: “(Jackson) sent a message of trust, and if you didn’t embrace that message of values, trust, respect and integrity for everyone, you were not on his team long.”

“The biggest problem at Wal-Mart is its extremely tight company culture. I’ve been told by people inside that it’s very hard for an outsider to come into Wal-Mart, and it takes a long time to get assimilated and to assimilate.”

    For Jackson, being liked is about getting a job done. Parker says that he was instrumental in helping a few Pepsico facilities on the West Coast decertify their unions, a move that doesn’t usually engender affection from workers. This entry on Jackson’s résumé may serve him well as Wal-Mart prepares to battle what could be a $25 million union-organizing effort by the AFL-CIO this year.

    “This guy’s marching orders are to keep Wal-Mart nonunion,” predicts Paul Clark, a professor of labor studies and industrial relations at Penn State University. “If he fails at that he won’t be in the position that long.”

    Meanwhile, because of the gender discrimination suit, “people inside the company are saying there’s a difference in the treatment among men and women, whether they’ve experienced it or not,” says Sheryl Willert, a board member for the Defense Research Institute. “People question the motives of the employer and their actions, and will start to lose trust.”

    Willert says that Jackson’s most pressing responsibility will be building trust.

Early ambition
    Much of what is known about Jackson comes from his long record in corporate America, recollections from former colleagues and schoolmates, analysts who know his work and press accounts. He canceled two interviews with Workforce Management to be held at Wal-Mart headquarters in Bentonville, Arkansas, one on the same day the company embarked on a public relations blitz to counter its bad guy/stingy employer image in the press.

    Jackson did agree to answer questions via e-mail. Despite his reluctance to be interviewed or photographed for this story, a portrait of him emerges from a wide variety of sources.

    In numerous articles, he says he grew up in southeast Washington, D.C., from humble beginnings. “I have been poor most of my life,” Jackson told Newsweek in a 1979 article about budding MBAs.

    He described himself in the story as a one-time teenage militant. “When you’re growing up on the city streets, you know somebody’s going to have the say,” he told the magazine. “I came to realize it might as well be me.”

    In a 2002 article in the Pleasanton, California, East Bay Business Times, he says he was “a disruptive, mischievous kid” who “pulled a few fire alarms and talked too much in class” and wound up getting kicked out of a couple of schools.

    His late father, Vincent, was a postman and a waiter for Marriott, and his mother, Mattie, worked for 35 years as an examiner at the Bureau of Engraving and Printing, putting in many hours of overtime to help pay for his education, he says. In the late 1960s, he attended the all-boys, military St. John’s College High School in Chevy Chase, an exclusive Maryland suburb two hours away from his home.

    While at St. John’s, he began to demonstrate leadership skills. “He was a very responsible, well-respected young man who was respected as a leader,” says Brother Timothy Dean, who was commandant at the school when Jackson attended and is now retired.

    Jackson was a big kid who played football, participated in the French honor society and was a lieutenant colonel, the second-highest-ranked of 1,100 students at St. John’s.

    “Larry was all about relationships with faculty and people that could help him get ahead,” says Dr. Stephen Snow, a former classmate who now lives in Orlando, Florida, and is a gynecologist. “He was a lot tighter with faculty than the rest of us.”

   Despite advice from high school counselors to apply at midrange universities, Jackson set his sights on the Ivy League, and earned a degree in economics from Harvard in 1975. After college, he worked for two years at the Bank of Boston, returned to Harvard, where he earned an MBA in 1979, and spent a couple of years as a consultant for McKinsey & Co. before beginning his 17-year career at Pepsico.

    He held a variety of positions at Pepsico’s bottling division, including plant manager, chief operating officer and senior vice president of worldwide operations for Pepsico Food Systems.

Fostering diversity
    For a young black man with eyes on the highest leadership positions, the job at Pepsico came at a significant time. Robert Stringer Jr., a management consultant who worked closely with Jackson at Pepsi, says that in the 1980s, CEO Roger Enrico was particularly keen on marketing to black consumers.

    “Enrico was extremely interested in getting the upper hand on Coke when it came to the (African-American) market,” Stringer says. “He knew he couldn’t do that unless the company had a robust diversity initiative within its walls. He enlisted people like Lawrence.”

    Stringer says Jackson was fervent about creating equity for black employees at the company and he “was action-oriented, more so than anyone else in the black community at Pepsi. He was constantly pushing, sometimes over-pushing, to do stuff. He was a bit ahead of his time.”

    Jackson says he recruited and mentored many blacks at Pepsi and helped create the first black managers association at the company. InCracking the Corporate Code, he talks about how his own successes emboldened him.

    “As the only black line manager at Pepsi-Cola, and then the only black vice president, I was in a position to protect all the corporate people trying to promote diversity,” he said. “I had the power–the line results, the budget–so nobody could discredit me.”

    His passion for diversifying the workforce was matched by his enthusiasm to drive revenues. Parker recalls a meeting in the early 1990s about the challenge of private labor manufacturers when Jackson was the vice president of manufacturing for the bottling group on the West Coast. The topic was whether to promote 3-liter bottles heavily given that the private-label competitors were doing so.

    Jackson’s perspective was, ” ‘Let’s not play into the hands of the competition,’ ” Parker says. “He was strong on business dynamics. He was so passionate about driving change that that passion sometimes led into challenging in a direct way. He would get animated, use his hands.”

    Parker says he and Jackson developed a code that would be a signal to Jackson when he was getting too in-your-face with other managers. Parker would either say aloud “L.J.” or he would stand up.

    While at Pepsi, Jackson moved from Texas to California before settling in Atlanta. His wife, Kimberly, is a Harvard graduate who was an investment banker before becoming a homemaker. The couple has three children.

    Jackson left Pepsi in 1997 to become senior vice president of supply operations at Safeway, where one of his chief responsibilities was to grow the private-label business. Neil Stern, a senior partner at Chicago-based McMillan-Doolittle, a retail strategy firm, worked with Jackson during his years at Safeway and describes him as a hands-on manager who “very much believes in setting a vision (and) taking that vision through to execution.”

“He was strong on business dynamics. He was so passionate about driving change that that passion sometimes led into challenging in a direct way. He would get animated, use his hands.”

    Coincidentally, the supermarket industry at the time was coming under attack from large discount chains such as Wal-Mart, Stern says. Jackson was part of the team that had to figure out how to change the Safeway model to compete. According to Stern and published reports, Jackson was successful. During fiscal 2001, the East Bay Business Times reported that Jackson was given credit for generating a big portion of the company’s $34 billion in revenues.

    After Safeway he briefly held the highest position yet in his career as COO of Dollar General in 2003, where his efforts were focused on the firm’s theft rate and high employee turnover.

    Stern believes that Jackson will move boldly to make changes at Wal-Mart. “Once he understands the vision he will build and design programs around that vision. He will say, ‘We can no longer stand back and think our superior business model will carry the day. Now we have to be aggressive in marketing why this is a good place to work, why it should remain a nonunion environment.’ ”

    Stern made this prediction to Workforce Management before Wal-Mart embarked in January on its nationwide “unfiltered truth” ad campaign, which featured full-page ads in 100 newspapers across the United States. Wal-Mart CEO Scott said in launching the effort that “it was time for the public to hear the ‘unfiltered truth’ about Wal-Mart, and time for the company to stand up on behalf of a workforce that includes 1.2 million Americans.”

    Was this Jackson’s handiwork? Wal-Mart spokeswoman Clark says Jackson was an “integral part” of the recent campaign but, she adds, the retailer had embarked on a broad public relations effort well before Jackson arrived.

Union rumblings
    At a time when the AFL-CIO is embarking on a large organizing campaign, Jackson has his work cut out for him. When asked if Jackson’s primary function is to keep unions out, Wal-Mart spokeswoman Clark says that “our associates are the ones who decided whether or not they want a union.” (There are no unions at any Wal-Mart stores in the United States. Last month the company closed a store in Canada after its employees voted to form a union, saying that the store was unprofitable.)

    Coleman Peterson, the retail giant’s former human resource head, oversaw a labor team that would swoop down on stores where union activity was percolating. Peterson, who now runs his own human resources consulting firm and says he left Wal-Mart because he had enough of retail after three decades, maintains that the teams were an effort to educate local managers about labor laws.

    But Jill Cashen, a spokeswoman for the United Food and Commercial Workers union in Washington, says the tactic was used to “intimidate workers.”

    Jackson, meanwhile, sees himself as being one with the masses. “My upbringing taught me the importance of respect for individuals, and I tried to build that relationship with frontline workers,” he said by e-mail.

    Steven Katz, author of Lion Taming: Working Successfully With Leaders, Bosses and Other Tough Customers, says Jackson’s task is to be authentic with workers, but at the same time not alienate executive officers. The trick is “not to be viewed by either management or the employees as selling out.”

    As others try to predict what the chief people officer will do, Jackson says of his new job, “Hopefully, others see that I have a drive to get things done and a passion to get everyone going in the same direction.”

    He’ll need all the drive and passion he can muster. Wal-Mart has become the butt of jokes on everything from “South Park” to late-night TV; communities fight to keep the retailer out; the perception of its jobs and wages is at an all-time low; labor-related lawsuits are rampant; and there’s a workforce of 1.5 million and growing.

    Jackson credits his wife with helping him make the decision to accept the job. “She was instrumental in persuading me to come to Wal-Mart and looked into my heart and said, ‘You need to go do this.’ She thought if I didn’t explore this, I would regret it. She made a huge sacrifice to make the move.

    “She thought Wal-Mart’s culture fit me perfectly,” he says.

    Those who know what Jackson is up against say his job will be difficult. He’ll have to run the human resources department almost like a military operation, says Eugene Fram, the J. Warren McClure research professor of marketing at the Rochester Institute of Technology’s College of Business in New York.

    While strict policies are critical, Jackson will have to be responsible to his employees in an “intelligent manner,” Fram says. “He needs to develop a deep understanding of the culture, talk to workers and quickly figure out where the problems lie.”

    He must earn the respect of employees, just as he did at Pepsi. Fram points out that if even 1 percent of Wal-Mart’s workers have problems or create them, that equals 15,000 problems. That means that one of Jackson’s biggest challenges will be this: “He’s got to watch out for ticking time bombs.”

Workforce Management, March 2005, pp. 32-38Subscribe Now!

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