0:02 Who are you and where are you going? What do you want? [Music] Hello and welcome to Business Lessons from the Military. I'm your host, Kevin Bemmel, and I'm here every Tuesday at 10:00 a.m. Pacific time to talk about business history. uh uh military doct I'm sorry not business history sorry military history military doctrine and the practices of great military leaders
0:38 all by way of distilling from them lessons that we can apply to our businesses and professional practices to make them work better be more successful so as I've mentioned many times on this show this is a way for me to give back to you my fellow citizens for the kind of support that you gave my colleagues and and and me while when I was in the military and continue to do so uh very different from what was going on when I was a child. So today is the
1:13 127th anniversary of the battle of San Juan Hill. This is the famous uh incident where where uh Teddy Roosevelt led the Rough Riders up what is what most people think was San Juan Hill. It was actually Kettle Hill which was very very close by. Um but in any event, it was part of the SpanishAmerican War. Um eventually the United States did win that war. Um and as a result uh the Philippines became uh
1:49 an American territory in essence. Um there were other other changes. The Philippines was eventually uh given its independence and is now an independent country. It was kind of the height of what might be called American imperialism. Um although by by any measure the Americans were slackers when it came to building an empire compared to uh the British and the Dutch and the Germans and and the Japanese etc. So uh but but in any event um this this battle and I'm going to I'm going to talk about
2:24 the history of the battle first so you can understand the context and then we'll you know talk about some lessons to learn from it. So, first of all, um this being literally the 127th anniversary, the battle took place on July 1st, 1898, and it was near Santiago de Cuba um during the SpanishAmerican War. So the strategic objective was to capture San Juan Heights. Um and and this was um and this would give it uh sort of a critical launching place to gain control
2:59 of Santiago, which was a major Spanish stronghold uh in Cuba. So, excuse me. The American forces were led by Major General William Rufus Shater and the US forces included regular army troops and volunteer regiments. Uh among them uh were the Rough Riders which was a a volunteer cavalry cavalry regiment led by uh Theodore Roosevelt. This was long before he was president. There were approximately 490
3:36 um men in the Rough Writers. Um they were a mixture of uh cowboys and um um excuse me and miners and Ivy League athletes, a very eclectic group all you know following the the very charismatic leadership of Theodore Roosevelt. Uh, also there, I think little known, unless you're a real history buff, were what what be what were known as the Buffalo Soldiers. So, these were regiments of African-American
4:11 uh troops, including the 9th and 10th Cavalry and the 24th and 25th Infantry. uh and and there were roughly two and a half times as many buff buffalo soldiers participating in the battle of San Juan Hill as there were rough riders. Uh and and just to to give you an idea, so um this is a a challenge coin. I I came across it in in some military exchange. Um this one is for the ninth and tenth cavalry. I don't know if you can see that there. Um but um and there there's
4:46 a wonderful movie about the Buffalo Soldiers and and they really epitomized um you know bravery and and and um and fidelity to duty um in the United States Army. So altogether there were about 8,000 American troops taking that took place or that that were involved in the battle of San Juan Hill. The Spanish defenders who were offending who were defending the heights uh numbered roughly 750 men. So a tenth of the American forces. They were led by uh
5:23 General Arsenio Linares. And they, you know, you say, "Wow, it was such a lopsided 750 versus 8,000." But the Spanish were defending fortified positions. They had the high ground, which is of course a a much easier position to defend because the attackers have to come uphill. They're under the guns of the defenders. Hence why the Americans needed such a huge numerical advantage. And they the the Spanish defenders had positions both on San Juan Hill as well as Kevl Hill.
6:00 Excuse me. the so the um Americans had to attack through jungle uh and and it was very slowgoing through this very thick you know jungle environment. They had poor maps. there were logistical delays um and they by the time they had arrive they arrived at the base of the hill they were under intense heat and fire from the Spanish defenders. So the initial assault was a
6:38 frontal assault on Kettle Hill and San Juan Hill um under heavy Spanish uh rifle and artillery fire. Now, artillery cannons, um, I believe howitzers had been, uh, invented by then. And so, you know, it was it was a a a dangerous assault, uh, for the Americans to make. Um, the most famous part of the military action is Teddy Roosevelt's charge up up Kettle Hill. Actually, it was a frontal assault on on on Kettle Hill. um and he
7:17 led from the front. Okay. So, uh that was not necessarily what commanders of regiments did. He was a colonel and and but Roosevelt felt he had to sort of set the tone. Um and he um earned national fame for this very dashing, daring uh military action that he took. and and actually in 2001 of course over a hundred years after the event took place and posthumously uh Roosevelt was awarded the Medal of Honor uh for for
7:53 this daring action. So in in the event the US troops captured both Kettle Hill and San Juan Hill forcing the Spanish forces to retreat to Santiago Duba. Um the casualties were heavy. Out of approximately 8,000 troops, there were uh around 1,300 US casualties killed, wounded um and missing. Uh Spanish casualties were considerably fewer. Um but they the Spanish could not afford to be losing men. Um and so so the the
8:28 losses were a strategic um loss that for this for the Spanish troops. Um the the victory at San Juan Hill was also a a a symbolic victory um because it really showed the American bravery making this frontal assault um and and it it boosted US morale um throughout the country as well as launching uh Teddy Roosevelt's political career. So the battle led directly to the siege of Santiago
9:06 uh and and it it eventually fell uh about two weeks later on July 17th, 1898. This was the turning point in the SpanishAmerican War. Uh and and it really signaled not just the decline but really just the the the unraveling of Spain as a colonial power in the Americas. um South American countries started fighting for their independence and and you know o over the succeeding decades
9:42 uh Spain lost essentially all of its influence and power in the western hemisphere. Uh and the legacy is uh still stands to this day. So the the you know daring charge led by Theodore Roosevelt up Kettle Hill stands still as a as a hallmark of of army bravery. Uh Roosevelt too and interestingly enough praised the Buffalo soldiers uh for their bravery um in the battle, their
10:17 fortitude in battle. um and and they became and he and he became legendary throughout the United States eventually uh rising to the presidency in 1901. So uh you know you you can see how the the it it's hard for us to appreciate this because we don't have the sort of sense of gallantry in combat any longer. wars are heavily mechanized. There's no, you know, cavalry dashes on
10:52 horseback and and these these kind of war today is really typically asymmetrical against, you know, terrorist groups and that sort of thing. So, it's I think it's hard for the contemporary mind to really appreciate just how galvanized Americans were by what happened at San Juan and Kettle Hills and and and what an icon Theodore Roosevelt became as a result of this. Uh but but it really it really, you know, changed the perspective of Americans um
11:27 at at the time. So uh there are many lessons that we can take from a business perspective uh from the the battle at uh at San Juan Hill. And the the ob the first one and the and the obvious one is that bold leadership inspires action. Okay. Teddy Roosevelt leading from the front leading his rough riders to to victory. Basically, it it it as I mentioned just a moment ago, it not only inspired his 490,
12:05 you know, eclectic cowboys and miners and Ivy League athletes, it really captured the attention and and romance of Americans in general. So any business leader can capture the same sense of of of Alon we call it. Um um romance may not be the quite the right term for business, but but really sort of capture the spirit of his team by leading from the front by really showing that he's
12:42 he's really 110% committed to what the business is all about. And especially when a shift in momentum is required to get the business moving into a different and and better direction, this kind of bold leadership really can make the difference. So you know leadership needs to be visible. It needs to be decisive. It needs to it needs to show personal commitment
13:19 from the lead from the leaders of the company of the organization in order to drive the innovation or the motivation and and the enthusiasm of of the team. So an example of this is in uh starting in around July 2017. So um Tesla's Model 3 car was in production uh and and it was there was a a very severe crisis in production. So animation was failing. There were
13:55 production bottlenecks and orders were were increasing. It was really the sort of point in time when Tesla really started to begin to take off and Elon Musk realized that that this was this was an inflection point uh for his company. And so he slept on the Tesla floor during this period from like I said around July 2017 till about mid 2018 for about about a year in order to demonstrate to the
14:31 people working at Tesla that he was absolutely deeply committed to the success of this venture. right now. You know, for all of what you may think about Elon Musk today and what he's been involved with, I as you know, setting I set the politics aside, there's no doubt that that back in 2017 2018 for the leader of a company to do something like that was a bold move. And it turned out to be the right move because the
15:06 production problems got straightened out. They fixed the automation and Tesla went on to become the most valuable automobile company in the world. Now, they've certainly had their challenges of late uh but there's there's no denying the dominance of Tesla as a car manufacturing company and technology company on the worldwide stage. And so Elon Musk was willing to to display bold leadership in order to bring that about at the point of when he hit when the company hit the point of crisis. Okay.
15:43 Uh next the next uh issue or the next lesson I should say is um so excuse me. So preparation can be inadequate. you're gonna have to adopt anyway. Okay. So, as I mentioned in in the the history I gave of the battle, u the US troops, they didn't have good maps. Um they were not properly equipped. Um they had to slog through this jungle and they didn't really have the the the proper tools to do that
16:19 well. And so it it it was they had to adapt to these chaotic conditions in real time. And in the event they did, right? And they were successful. So businesses require innovation, but even more so agility, especially when the proverbial fit hits the shaman, right? Plans go arry. Almost inevitably they go ary. We need to count on that and we need to build into our teams agility so that
16:54 when faced with the plans falling apart they can make the pivots the changes in direction that are necessary in order to still achieve the objective. So uh Airbnb is a good example of this uh during the the COVID 19 uh period. This was you know in in 2020. So, um, you know, they they they really had to adapt their business model and they had to they had to pivot, um, to to local travel and online experiences,
17:31 uh, because people weren't flying. So, they, you know, they weren't going to fly from, you know, Los Angeles to New York and get a be and get a BNB, an Airbnb in New York. That was just not going to happen. Now, nobody anticipated the CO 19 situation uh and and and so whatever plans Airbnb might have made, they didn't make plans for that, right? And so they on the fly they figured out well. So instead of relying on business travel and and uh and and you know interstate travel or
18:06 international travel, we're going to pivot and and have you know people staying locally maybe just to have a change of scenery, things like that. And and in the event they were pretty successful in making that pivot and sustaining the sustaining their business, right? And so this shows you that the adaptability and agility of a business is crucial especially when something happens that just really can't be anticipated. Okay. And that's that's the main thing. So clearly the
18:42 leadership of Airbnb had the ability to do this even though there there was there were no you know contingency plans for such a a thing as a you know global you know travel shutdown that happened during CO 19. Okay. So next we you need to leverage momentum. Okay. And that's that is what so the the rough rider uh assault frontal assault up Kettle Hill led by Teddy Roosevelt. So he created momentum
19:20 among his you know roughly 500 cavalry men and that one small part less than 10% of the American troops right created enough momentum to carry the rest of the eight of the of the 8,000 uh troops I into the battle and on to success capturing both uh as I mentioned San Juan Hill and Kettle and then eventually going on and capturing Santiago as well. So you we don't always need to start out
19:57 with the entire organization being successful. Sometimes if we can engineer a small success, as long as we quickly build on the momentum created by that small success, so then we can pull the whole organization to victory, right? So, and so oftentimes it's better to initially focus resources on creating a smaller success that will build some momentum than it is to try and get the whole, you know, parade moving. So
20:34 the idea is to first of all create that small success at a at the proper moment and then to be prepared to build on it in order to keep the momentum going. So a good example of this in the business world uh is is Netflix, right? So, they started out, as I've talked about in other shows, as as a sort of a male, you know, DVD uh service and then they eventually got into streaming. Okay. And so, their
21:11 the the success they had as a mail uh mail orderer DVD or mail order rental DVD service, they were able to parlay that into success as a streaming service. And from there they were able to become they were able to produce original content and become one of the most significant content producers in the world today. So network produces a tremendous amount of of video content
21:46 uh you know because they were able to create some momentum initially as first a male a male rental service and then building from there right and so I you know I don't know if the founders of Netflix had in mind you know to become one of the largest producers ers of of of entertainment media in the world when they started out the service. I I suspect probably not. Uh but but in any event, they were able to capitalize on their initial initial success that
22:21 created some momentum. They steamrollered the largest video rental company uh in the United States at the time, Blockbuster. Eventually, Blockbuster went bankrupt. And today Netflix competes with the largest of the of the legacy studios whether it's uh un NBC Universal whether it's uh Paramount whether it's Disney Fox um Netflix uh competes with them absolutely toeto toe along with other new entrance like like Apple right and so by getting going that
22:59 was that's that's the most important thing because then you can leverage the momentum and go on to bigger and better things. America is a maritime nation. Our freedom and security depend on strong sea services. The Beverly Hills Council of the Navy League stands with our Navy, Marine Corps, Coast Guard, and Merchant Marine through community support, education, and advocacy. For over 120 years, Americans of all walks of life have heeded our call. No prior military
23:37 services required to join our mission. The Beverly Hills Council of the Navy League of the United States. Help us support those who serve at sea. Visit navyleague.org. I realize I didn't reset my my crawl and and and background image. So was quickly doing that during the break. So, we're talking about the 127th anniversary of the Battle of San Juan Hill, which al which also took place on Kevl Hill on on
24:13 on Cuba. uh led to the victory at the o over uh Santi Santiago Deuba and and America eventually uh winning the uh the SpanishAmerican War and solidifying the decline of Spain uh as as an imperial global power um and and and especially in the Western Hemisphere. So we've we talked about some business lessons that we can take from the battle of San Juan Hill. The first was bold leadership
24:48 inspires action. Uh the second was preparation can be inadequ inadequate but you have to adapt and be agile anyway. And the third was we need to leverage momentum. And that that a a strategy actually aimed at creating a small victory first that then we can build on may very well be a much better strategy than trying to lead you know than trying to create a you know a victory for the overall organization uh from the get-go. Okay. So so those are three. Let's go on and look at some
25:23 more now. So excuse me. collaboration beats competition within teams. Okay? And and the the various units that participated in the Battle of San Juan Hill. I've mentioned the Rough Riders a number of times. I've also mentioned the Buffalo Soldiers. They had both cavalry units, the 9th and 10th Cavalry, and and infantry units, the 24th and 25th. So there were numerous regular army units as well as volunteer army units. And
25:58 rather than creating a competition between the regulars and the volunteers, uh the the the uh commanding the American commanding general uh Shaft, he really looked to create a collaborative plan so that all the units worked together most effectively in order to achieve victory. And that's really what we want to do in our companies and organizations as well. I know it there was a time it was very popular to have sort of internal teams set one in
26:34 competition with another and and while that that may work in some limited circumstances overall it's much better off to foster an environment of cooperation among different parts of your organization so that everybody is working to achieve the same goals. Okay. So uh we we don't really we don't want to create a situation where you know efforts are siloed. So the marketing people they're doing their thing and the sales people are doing their thing and over in product development they're
27:10 doing something else. Right? We want all of the parts of the company working together for the overall benefit of the organization. So, one of the reasons that Apple sites for its launch of the iPhone being so successful in 2007 is because Apple really succeeded in bringing unprecedented cooperation between hardware developers, software developers, marketing people, breaking down all the
27:46 internal silos and all focusing on launching this new technology that we now call smartphones um and and in a way that it didn't limit innovation the way it had in the past. Okay. And so that's that's one of the key reasons why the the iPhone it wasn't just that the iPhone was so revolutionary and so cool. Basically, I mean, there's been lots of revolutionary and cool products that have been introduced that went nowhere.
28:22 So rather than risk the flop of its product, right, because of internal squabbbling, the leadership of Apple really worked to create a again an interactive web is the wrong word. An an interactive cooperative environment in Apple so that all the different parts were seeking the same goal, right? And that's what we want to do with our businesses as well. We can't do product development or or new service development in a vacuum. We
28:58 have to do it in concert with marketing so that the company can grow more organically as opposed to having to completely revamp marketing because now there's this new product or service and we've got to get it out, you know, to the public. So things need to work the be the the le the more silos we can break down the more cooperation we can foster the more likely it is that our company will be successful. Okay. So collaboration beats competition within teams.
29:33 Next small wins matter. Okay. And I will be I'll be honest. This is one that I struggle with. My friend Bill Gross is always telling me celebrate the small wins and and I'm not good at doing that at all. So, all right. So, um so the um the battles um the battle um that that fought and won uh Kettle Hill was essential to the larger success at San
30:09 Juan Hill, right? And so the fact that Teddy Roosevelt led this gallant cavalry charge that ended in the capture of Kettle Hill that that snowballed and allowed for the capture of San Juan Hill which eventually led to the uh to the capture of Santiago Duba, right? And so um this is this is you know somewhat similar um to um uh what I was talking about in terms of of bold leadership. Um but but this is this is
30:44 refining it because we can have a small win and that may not necessarily create bold leadership may not necessarily be required to create that small win. What may be necessary to create a small win is to stay focused. Okay? so that we're not uh uh dispersing our resources in a way that we're not able to gain any victory at all. Okay?
31:22 So, a great example of this is Amazon. Now, you know, if you if if you've only been around, you know, as kind of a a shopper and and and such for the last, you know, 10 years or so, you've only known Amazon as the largest online retail seller, and they sell virtually everything. Okay? But in the very earliest days for Amazon, all they sold was books. They were they they were just an on they were
31:57 the the the main online book seller. Now they ended up wiping out most of the bricks and mortar books book business because they they could have a a much larger selection of books available and they could sell them at a a lower price because they didn't have to maintain bricks and mortar stores. Okay. Um but it but after they gained dominance in selling books then they started using the systems they had built for for fulfilling ecommerce and and and for
32:32 marketing products online. they were able to use that to expand into other categories of products and and and now they've gotten like like I just said today to the point where you can buy virtually anything on Amazon and especially if you're an Amazon Prime member, you can have virtually anything you want within 24 to 48 hours, it seems like. Now, there may be there may be some product you can't get that quickly. I I've never encountered it. Okay. I confess to being um an you know an
33:09 Amazon user. Uh and and it it it is you know it is absolutely dominant. The only close competitor to it is Walmart and it's only because Walmart has made a tremendous investment over the last few years in building up its e-commerce operation. But the key to Amazon's success was to start to to start small to win in online book selling and then move on from there. So small wins absolutely matter. Okay. Next, logistics
33:46 and planning are crucial. Now, just because your plans may fall apart, not come to fruition, and you'll and you'll need to be to adapt and be agile, that doesn't mean that, okay, so then I won't even bother planning, and I won't even worry about logistics. No, quite to the contrary, these are crucial aspects of any success that we seek. Okay? And the the better we deal with logistics, the better we plan, the more likely it is
34:23 that we'll be successful when we need to pivot, when we need to exhibit agility and adaptability. Okay. So, uh it was uh the the famous uh German field marshal von Molki. I've I've I've quoted him many many times. No plan survives first contact with the enemy. That's essentially what he said, right? Uh but and and this is this is sort of General uh Dwight Eisenhower said this, I believe during World War II, he kind of said something similar that you know
34:59 uh that that plans fail but planning is crucial. Okay. And what he meant by that was just this, that the more thoroughly we plan, the more we consider logistical needs and work to make sure that they can be met, the even even when our plans fail, okay? We will be able to make those changes in directions. We will be able to um adapt to meet our objectives in the best way possible. Okay? and and
35:36 we saw that in the Battle of San Juan Hill. I've already talked about all the logistical failures. Okay. Um and and one of the things that that that the battle did was show the US Army it had a lot of work to do still in these areas to in order to be more successful in battle in the future. So even great strategies will fail unless there's strong operational and tactical planning and logistical support behind them. Now luckily for the United States,
36:11 the poor logistics didn't sabotage uh their the success at at San Juan and Kettle Hills. Uh but but it could have and in other battles uh it did mean setbacks for the United States. Okay. Now, on the business side of things, a good example of where poor logistics uh basically caused a a colossal failure was with Target when it entered the Canadian market in around March of 2013.
36:46 So, you know, it Target wanted to make a big splash moving from the United States into Canada. It it should have been an easy thing to do. uh the the the cultural differences between the United States and Canada are not nearly as great as they would be between say you know the United States and China or something like that. And and nonetheless uh Target was not able to build a successful business there. And so roughly two years later in April 2015,
37:21 Target exited Canada. By then they had they had lost $2 billion dollar. Okay. Now we we think of billion dollars now as kind of a billion here, billion there.$2 billion is a lot of money. Okay. No matter what time you're in, no matter what you're doing, $2 billion is is a lot of money. Okay? And Target basically had to file for bankruptcy in order to keep its business alive. and a lot of the problems that it experienced in Canada were due to poor logistics. So
37:56 there were other factors that that created the failure, but poor logistics is one of the top if not the top issue that caused targets failure in Canada. So when we plan an initiative for our companies, whether it's a new initiative, whether it's support for something ongoing, whether it's a just part of what the company is, we have to make sure that there's proper logistical support and planning for these so that
38:31 they can be sustained. Okay, so we talked about building momentum. One of the easiest ways to kill momentum is to not have the proper logistic support planned so that now you've got this small victory. You want to take advantage of it, but you can't because as you turn back to look at the things you need, they're not there and ready to go. Okay? So, logistics and planning are crucial. Even though often times plans will go ary, that doesn't matter. We
39:07 still need to plan. We still need to especially make sure that our logistics are in place in order to enable our teams to succeed. Okay. Next, reputation can be built in a crisis. Perhaps it can be built most quickly in a crisis. Okay, so Teddy Roosevelt leading the Rough Riders up Kettle Hill, as I mentioned at the beginning of of the show, galvanized not
39:42 just his Rough Riders and the 8 thou and the other troops making up the total of around 8,000 that ended up being victorious at San Juan and Kettle Hills. It galvanated Americans in total. Okay. and it created a reputation for Teddy Roosevelt that essentially swept him into the White House. Okay? All amidst this desperate battle where they had slog through jungle, dealt with heat, poor logistics, wrong equipment.
40:18 Okay? And yet they were able to get through and be victorious. So crisis does reveal character. You you probably will learn more about a person when you see how that person responds to crisis than you could in 10 years of of watching the person deal with just regular day-to-day life. Okay? Crisis galvanizes and it shows a person's true colors. Okay? And so an example of this was in 1982
40:53 when uh Johnson and Johnson had to deal with an incident where some some bottles of Tylenol had been poisoned. And I don't remember the exact number of people now, but there were some people I believe who were killed as a result of taking Tylenol laced with poison. And people were they absolutely would not buy or take Tylenol after that. they were they were petrified that they would get poisoned by it. Right? So, uh Johnson and Johnson stepped up to the plate. They did an a a complete recall
41:31 of Tylenol. They pulled it all off the shelves and they they made it clear that what they cared about most was the safety of people to whom they sold products and and that they weren't going to reissue Tylenol until they were absolutely certain that it was safe for people to take it. And so by taking fast bold action, by essentially accepting the situation and accepting responsibility for fixing the the the situation, Johnson and Johnson was able
42:08 to weather the Tylenol recall quite well. Okay. And Tylenol remains today a very very potent, valuable brand. And in fact, we generally don't refer to uh to the the the drug that is Tylenol by its name, which is acetaminophen. We call it Tylenol, whether it's, you know, plain wrap Tylenol, whether it's actual Tylenol or some other uh brand name for it. Tylenol is used the way Kleenex is used instead of facial tissue or Xerox
42:44 copy is used instead of photocopy, right? It has that iconic brand status that only a handful of brands really ever achieve. One of the reasons for that is because of how Johnson and Johnson responded to the the the Tylenol scare and recall back in 1982, right? Over 40 years ago today. Okay. So reputation can often times is built in a crisis. Okay? And we need to remember that if our business hits a crisis point
43:21 because we can really take it on to a higher uh and more successful level if we keep our heads and do the right thing in a crisis. and and you and and uh unite our team around dealing with the crisis, resolving it, and moving on to better things. Okay. Um next, um know the terrain literally and figuratively. Okay. So, unfortunately for the American forces, uh the they
43:57 really did not understand uh the terrain in Cuba. Uh and that's why this whole sort of jungle slog that preceded the the charge up San Juan and Kettle Hills uh was was so difficult. They were not prepared for the kind of terrain that they encountered, right? Almost criminal negligence, you might say, on the part of army planners to not know what they'd be faced with in, you know, in in this invasion. Okay. and and as a result
44:33 it took very bold leadership to turn the tide um in the battle. So from a business standpoint, okay, we need to understand the business landscape. We need to understand market conditions, we need to understand customer needs and we need to uh we need to understand competitive threats. Okay? And if we don't, it's unlikely that we will be successful. And and and a good example of that is when Germany uh I'm sorry, when Walmart decided to enter the German
45:12 market. So um initially, uh Germany um I'm sorry, Walmart uh bought uh two companies. Um I I have their names right here. uh work off and interspar. Okay. A total of about 95 stores. Okay. And that and and and so Walmart planned to essentially relaunch these stores as Walmart stores in Germany. Okay. Uh and and and this this initially took place in 1997 1998. And un you know unfortunately for
45:48 Walmart over the succeeding decade they struggled and uh in 2006 in fact on July 28th 2006 just uh what 19 years ago not quite 19 years ago Walmart announced it was exiting the German market. It sold the remaining 85 stores it still had uh to a German uh retail group and it incurred a billion dollar loss as a result. Now why was Walmart not successful? Well there
46:23 there are several reasons. One is cultural misalignment. So Walmart stores in the United States, they have mandatory cheerleading uh uh in in and when in the morning when the stores open among the employees, they have smiling greeters. Uh the way they bag groceries, all of this confused or annoyed German shoppers. By the way, I I get it. I I just I that kind of stuff is I I find it annoying, but but whatever. Most people don't in America, but they they certainly did in Germany.
46:58 Germans in general prefer a a low interaction, calm, efficient shopping experience. They're not into all the cheerleading and that kind of stuff. And so that was a major market misread on the part of Walmart. Next, they faced very tough competition uh from discounters like Aldi and LLE uh where they had ultra- low prices, very streamlined operations. And so Walmart's everyday low prices did
47:33 not stand out in Germany the way they did here in the United States. Right? Walmart is pretty much the the only, you know, absolutely low price major retailer in the United States. Target really doesn't fill that market anymore. Target is more of kind of a niche player these days and and things like dollar stores and such, they're just not large enough to compete with Walmart where you can get ver like like Amazon, you can get virtually anything uh at at Walmart.
48:08 And so in but in Germany, there were two large major competitors to the Walmart business plan. And so why would Germans shop at Walmart when why would they switch to Walmart? what what was the re what would be their reason for doing that when they're getting the same thing from Aldi and Lindle and and you know which were you know German German businesses so that was another problem so another problem was they did not Walmart did not understand the legal and regulatory climate in Germany so their pricing strategy violated German laws
48:46 against predatory pricing where you're not permitted to sell below cost and also their labor practices were out of out of alignment with German labor practices where there's strong worker protections, there are work councils and so uh they so Walmart had a lot of labor issues as well. So, um, those those are some of the main reasons that Walmart failed in Germany. And you can see they were all as a result of Germany not understanding the
49:21 terrain. I'm sorry, I keep doing that. They were all as a result of Walmart not understanding the terrain on which they would be dealing when they when they opened up in Germany or when they bought the two chains and converted them to Walmart stores in Germany. Right? Major major misread on Walmart's part. Billion dollar loss out of the market and and all because they just did not properly understand the terrain. So I'm gonna I'm gonna I'm going to stop there. There are some other lessons that that we could draw from uh from from the battle of San
49:58 Juan Hill, but I think that you know the the ones I'll I'll quickly review uh the the uh the lessons that I that I covered. Uh so first of all, bold leadership inspires action. Uh number two, preparation can be inadequate. You have to adapt and be agile anyway. Number three, you need to leverage momentum. Number four, collaboration beats competition within your teams, within the different parts of your company. Uh, number five, small wins matter. Okay, they they they are the
50:35 they are the basis on which we can build momentum. Number six, logistics and planning are crucial, right? Plans come and go. They always have to be supported by strong logistics and good planning so we can make those those adaptations, make those shifts. Uh number seven, reputation can often times is built in a crisis. Okay, so crisis is as much an opportunity a as anything else. And then uh number eight, know the terrain
51:12 literally and figuratively. The failure to do that will ultimately mean failure in your venture. So I thank you very much for joining me today. Hope you found this useful, interesting. Uh would love to hear your comments. All the links to social media will be in the show notes after the episode posts on YouTube. And let's see, tomorrow at 10:00 a.m. Pacific time is my show, People Making Money. And I'm going to be talking about a phenomenon known as
51:49 lifestyle creep. Okay, if you're not familiar with this, it will eat away your finances. Okay, so we're going to talk about lifestyle creep tomorrow, Wednesday, 10:00 a.m. Pacific time. on Thursday at 5:00 p.m. Pacific time. Join me at Jigger's Place, uh, Jigger's Place, I should say. This is my every other week show where we sit back, we have a cocktail, and we talk about all of the things not related to finances. And this Thursday, we're going to be talking about etiquette. It it is uh one
52:24 of my favorite topics. And yes, Emily Post will come up. Uh if if if if you think that etiquette is what uh wealthy and upper class people do in order to put the rest of us down, uh I I I urge you to to join me on Thursday at 5:00 PM at Jiggers's Place and find out really what etiquette is all about. By the way, if a wealthy person puts someone down, they are exhibiting absolutely horrendous etiquette. And then on Friday, which is July 4th, we'll have a
53:00 I'll be uh having a special edition of the Way to Wow shows in honor of Independence Day at 10:00 a.m. Friday. I hope you'll join me for that. Uh and and I hope you'll be inspired in your celebration of the day. And then next week on Monday, we're back again 10:00 a.m. Pacific time with Trust and Estates Weekly. And a week from today, I'll be back for the next edition of Business Lessons from the Military. So, thanks again for joining me. Really appreciate your viewership. and signing off as I always do.