In Fort Smith, Arkansas the visitor center is located in a former bordello. Miss Laura bought an elegant Victorian hotel, with beautiful wood trim, The iron fram double bed is draped with garments, the wallpaper and drapes are attractive A room in Miss Laura's twelve-foot ceilings, and large elegant guest rooms, and turned it into the "Finest House West of the Mississippi," or so they say. It continued serving that purpose until the late 1940's, when it fell vacant. The local philanthropist and newspaper magnate bought it and helped restore it to its original splendor, then gave the building to the city.

The next morning we headed north on a beautiful country road through the Ozarks, stopping at Bentonville. We thank our correspondent cousins Earl and Martha for recommending the Sam Walton museum. We came away mightily impressed, and as a measure of our approval, have copied out "Sam's Rules" for building a business at the end of this report. You can skip that part if you've already read it. But seriously, the Walmart story is more about building a corporate culture than a retailing empire. And that culture is built out of the values of middle America -- pragmatic, considerate, and trusting. The way Walmart works with its "associates" made it a certainty that the company would continue to prosper after Sam's death. And the Walmart story is a A small plain building labelled Walton's 5-10 with a red and white striped awning in front was Sam Walton's original store. Sam Walton's original store healthy antidote to the disease of fast-buck swindlers like Enron. The ability to build a private corporation with more employees than any other company in the world is perhaps a uniquely American phenomenon, and relies on the high level of trust placed in large organizations. Exporting this corporate trust might be the best thing we could do to help build a more peaceful world.

Later we visited Carthage, MO, which has a truly beautiful courthouse. The construction material is a grey marble, quarried locally, and used for the Missouri statehouse, as well as numerous public buildings, including the lovely high school, the library, and several churches. You can also see the marble as part of some of the old mansions. Besides the courthouse, which has a mural depicting the city's history, we visited two museums. The Powers Museum was endowed by the daughter of a local family, who willed her property and her parents' keepsakes to the city as a museum. This presents the staff of the museum with a special responsibility -- continually creating interesting displays from the odds and ends, the scraps of paper and articles of clothing and old photos and such. The Romanesque building shows turrets, balconies, and a clock tower, all in beautiful local marble Carthage courthouse

The Civil War Museum is quite interesting, as the first major battle of the Civil War was fought here, as a thousand trained Union soldiers, mostly Germans from St. Louis, tried to intercept the Governor of Missouri with a six-thousand man untrained militia. The Union troops were able to make an orderly retreat with few casualties. Missouri soon fell to the Union, but the southwest corner of the state was the scene of bloody guerilla raids by confederate cavalry throughout the war, and the city of Carthage was sacked. Only a few dozen hardy residents endured the raids out of a prewar population of several thousand. Carthage was rebuilt after the Civil War, however, and became quite prosperous by the end of the nineteenth century.

The weather has turned cool; autumn is here, and we're enjoying the sunny days with cool mornings and warm afternoons.


RULE 1. COMMIT to your business. Believe in it more than anybody else. I think I overcame every single one of my personal shortcomings by the sheer passion I brought to my work. I don't know if you're born with this kind of passion, or if you can learn it. But I do know you need it. If you love your work, you'll be out there every day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion from you - like a fever.

RULE 2. SHARE your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations. Remain a corporation and retain control if you like, but behave as a servant leader in a partnership. Encourage your associates to hold a stake in the company. Offer discounted stock, and grant them stock for their retirement. It's the single best thing we ever did.

RULE 3. MOTIVATE your partners. Money and ownership alone aren't enough. Constantly, day by day, think of new and more interesting ways to motivate and challenge your partners. Set high goals, encourage competition, and then keep score. Make bets with outrageous payoffs. If things get stale, cross-pollinate; have managers switch jobs with one another to stay challenged. Keep everybody guessing as to what your next trick is going to be. Don't become too predictable.

RULE 4. COMMUNICATE everything you possibly can to your partners. The more they know, the more they'll understand. The more they understand, the more they'll care. Once they care, there's no stopping them. If you don't trust your associates to know what's going on, they'll know you don't really consider them partners. Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors.

RULE 5. APPRECIATE everything your associates do for the business. A paycheck and a stock option will buy one kind of loyalty. But all of us like to be told how much somebody appreciates what we do for them. We like to hear it often, and especially when we have done something we're really proud of. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They're absolutely free - and worth a fortune.

RULE 6. CELEBRATE your successes. Find some humor in your failures. Don't take yourself so seriously. Loosen up, and everybody around you will loosen up. Have fun. Show enthusiasm - always. When all else fails, put on a costume and sing a silly song. Then make everybody else sing with you. Don't do a hula on Wall Street. It's been done. Think up your own stunt. All of this is more important, and more fun, than you think, and it really fools the competition. "Why should we take those cornballs at Wal-Mart seriously?"

RULE 7. LISTEN to everyone in your company. And figure out ways to get them talking. The folks on the front lines - the ones who actually talk to customer - are the only ones who really know what's going on out there. You'd better find out what they know. This really is what total quality is all about. To push responsibility down in your organization, and to force good ideas to bubble up within it, you must listen to what your associates are trying to tell you.

RULE 8. EXCEED your customers' expectations. If you do, they'll come back over and over. Give them what they want - and a little more. Let them know you appreciate them. Make good on all your mistakes, and don't make excuses - apologize. Stand behind everything you do. The two most imporant words I ever wrote were on that first Wal-Mart sign: "Satisfaction Guaranteed." They're still up there, and they have made all the difference.

RULE 9. CONTROL your expenses better than your competition. This is where you can always find the competitive advantage. For twenty-five years running - long before Wal-Mart was known as the nation's largest retailer - we ranked number one in our industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you're too inefficient.

RULE 10. SWIM upstream. Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction. But be prepared for a lot of folks to wave you down and tell you you're headed the wrong way. I guess in all my years, what I heard more often than anything was: a town of less than 50,000 population cannot support a discount store for very long.