Making It Easier to Get It Right

asset protection at Walmart

Navigating the asset protection responsibilities at the world’s largest retailer requires patience, perspective, partnerships, and outstanding leadership. Mike Lamb, LPC, is the vice president of asset protection and safety at Walmart US. A seasoned industry leader, Lamb has served with some of the nation’s most prominent loss prevention programs. He has also offered his guidance and leadership throughout the loss prevention community as a board member with the Loss Prevention Foundation (LPF), the Loss Prevention Research Council (LPRC), the Loss Prevention Research Foundation, the Retail Industry Leaders Association (RILA) LP Steering Committee, and LP Magazine’s editorial board.

Recently LP Magazine sat down with Lamb and key members of his senior leadership team including Paul Jaeckle, LPC, senior director of asset protection strategy and operations; Tom Arigi, senior director of asset protection; and Gary Smith, LPC, senior director of asset protection. [EDITOR’S NOTE: Just prior to publication, Jaeckle accepted a new position as vice president of asset protection at Meijer.]

When you first came to Walmart, what was your vision for the department?

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Mike Lamb, LPC, Vice President of Asset Protection and Safety, Walmart US

LAMB: When I first came to Walmart my vision was, “How can I make a measurable difference for the company, given what they’ve hired me to do and my ambition to ultimately accomplish more over my career here?”

Walmart is a fantastic organization with a tremendous legacy of success. I think it’s important that no matter the organization you step into, whether you’re a long-term employee working for the only organization that you’ve been a part of or someone that has worked for many organizations, it’s important to seek to understand before you seek to be understood. I think there’s a stop, look, listen, and learn aspect for any leader, and I tried to practice that coming on board here.

Embracing the culture of an organization is vitally important. There’s an outstanding culture at Walmart with tremendous core values that I embrace, so that transition was very easy for me. I think that we all get paid to bring fresh ideas to the business no matter what the level in an organization—to challenge the norm, to look at things differently and through a different lens from time to time, and to make recommendations on how the business can be better. And I’ve really tried to focus on those things in my time here.

When you took over the leadership role, what did you see as your top priority?

LAMB: I think the starting point in many ways was to say to the organization that we are going to come up with solutions. Our approach was to provide a simplified way of working, focusing on what matters most. This begins by assessing the business, determining what needs to change, and understanding where the opportunities exist to improve our overall performance.

Working as a team, we wanted to identify the most significant tasks at hand and determine what was really critical to work on. There needs to be a balance between resolving process-related shrink and the opportunities we have in that space versus the malicious shrinkage that we see with respect to theft.

My boss has a saying: “You’ve got to make it easier for the stores to get it right than to get it wrong.” There were too many priorities, both within the asset protection team as well as the operators. There was no singular focus on the work that needed to get done and the things that needed to be executed in the stores for us to deliver successful results.

How did you approach that with your team?

LAMB: We relied very heavily on data and analytics. One size does not fit all in any retail environment, and it certainly didn’t for Walmart. First, we took a risk-tiered approach to our stores, realizing that some stores were more opportunistic with more risks than others. We looked at the potential tools that we could provide to the organization that would allow them to make it easier to get it right.

Among those tools was a shrink dashboard, which provided diagnostics, particularly around inventory management. This was intended to identify more process-related shrink opportunities and really point the stores to the areas of the business that they needed to address to effectively manage shrink.

We got serious about training and education for the asset protection teams. We reinvigorated our mid-level AP training through our “MAPM Academies,” bringing those men and women in on a regular basis to train them on the expectations of the role.

We realized that we had to reach our team using various forms of communication, which led to the creation of the LEAP digital newsletter. LEAP stands for Leadership and Excellence in Asset Protection—an outstanding tool that we developed in partnership with LP Magazine and LPM Media Group.

We also took advantage of satellite TV. Walmart has the capabilities of transmitting a broadcast to all our stores, and we set up a broadcast we call Same Page. Once a month we engage all the men and women in asset protection around the most relevant topics in the business, with half of that broadcast dedicated to an open-line question-and-answer session.

This helps ensure that the folks in the field know who we are and what we were doing to support them while sending a strong message that they have an open line of communication to us. We give anyone and everyone a chance to speak their minds on this broadcast while emphasizing the need to drive execution and actions in the store.

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Paul Jaeckle, LPC, Senior Director, Asset Protection Strategy and Operations

Paul, you’ve been with Walmart your entire career and worked your way up from the ground floor with the company. How do you feel the employees have responded to the new asset protection strategy?

JAECKLE: The thing that’s probably the most interesting about how the department operates today is that it isn’t simply a top-down strategy. The team is given the opportunity to provide feedback on how we adjust, how we learn, and how we move forward. Mike has created a culture that invites feedback. He has a very sound understanding of where we need to go, but is cognizant of some of the nuances that are unique to the culture of Walmart. He’s learned to ask the right questions before making decisions.

There’s never a circumstance where he’s not transparent about where we need to go or a time when you don’t feel like your input is valued. There’s a true diversity of thought that leads to strong, unified, and joint decisions that are the right thing for the business.

What do you see as some of the biggest changes?

JAECKLE: Mike challenged us to simplify the business. He challenged us to not simply maintain the status quo. He’s challenged each and every one of us to be a student of the business—not just within the company, but with what’s happening within the industry. We needed to pay attention, and it’s made a big difference.

We’ve partnered with the Loss Prevention Research Council and are an active partner in industry research and development. Walmart is investing in the team through LP certification with the LP Foundation, which provides an industry standard and a way that you can better yourself.
Looking at it from my personal experience—I have my LPC now—it just fundamentally changes things and exposes you to a very different side of the business. We’ve taken a critical look at the way we approach the department, the team, and the business, and it’s making better partners and better leaders at every level.

Also, if there might be a smarter, more efficient, more effective way of operating, then it’s open for discussion. Restorative justice is now part of the conversation. We’ve re-energized the greeter programs at the doors. We’ve reinforced our return program. All the steps we’re taking strengthen both the department and the company mission.

Tom Arigi, Senior Director, Asset Protection
Tom Arigi, Senior Director, Asset Protection

ARIGI: I have a three-year perspective now, and it’s changed a lot in that time frame. I imagine that anyone that’s been around any longer can really see it. I think that AP around here is in a much better place today.

A lot of good leaders focus on different things—compliance, operations, and whatever. Mike came into the role and brought balance and perspective to the job because of his experience in the industry. You can’t just be great operators. You can’t just catch shoplifters. You can’t just focus on internals. It’s that blend that builds a winning program. I think what the team was looking for was a little role clarity. It’s interesting to see how all of these things have aligned to get maximum push.

Gary Smith, LPC, Senior Director, Asset Protection
Gary Smith, LPC, Senior Director, Asset Protection

SMITH: Having had roles in several different areas of the company, I think broadening our perspective and our role has been extremely important. For example, something that we’re really focused on now is the digital path—how we’re interacting with the customer and how things are intersecting with the Internet. One of the things my team is really focused on now is understanding all the different aspects of loss that occur in that world.

It’s one of the challenges that we’ve been given both from our leadership team and that we’ve given ourselves within the asset protection department. Where do we fit in? We need to understand how that loss occurs and how we can make an impact because that’s the future. The future isn’t just brick-and-mortar stores. It’s learning how to perform for the next generation. That’s exciting, and we’re learning as the business is learning.

How have you gone about gaining support in the stores?

LAMB: There’s been a myriad of things that we’ve done. We actually look at shrink and plan our shrink goals knowing that as we improve shrink we improve profitability for the stores. That makes us more relevant. We don’t necessarily share all the proprietary information, but we share the progress that we’re making and the success that we’ve had across the organization.

The other thing I think we’ve done effectively is to market asset protection across all areas of the business. Our merchants are our key stakeholders, and as we think about merchandising, we know that there are select departments, as there are for all retailers, where there’s an inordinate amount of shrink. There are certain departments where you are at a higher risk for loss, and partnering with our merchants in a way that’s meaningful is very critical. Your work there is never done, but we’ve made really strong progress. So it’s been a journey. And it’s not necessarily been one or two or three things but an overall culmination of things that have led to our success.

How did you approach this strategy with company leadership?

LAMB: When you’re dealing with executive leadership, you had better bring facts. You had better have done your homework. Your hypothesis or suggestion or recommendation should be grounded in solid data, analytics, and fact. It’s okay to have the passion and the emotion, but you must have more than that. You have to make a compelling business case to leadership that there will be a return on the investment, whatever that investment is.

I can tell you that I’ve had unwavering support here. We knew that we could do better on some of our deliverables. The definition of insanity is doing the same thing over and over again and expecting a different result. We knew that we had to approach the business differently.
You have to be persistent as well. You can’t just walk away at the first no. You have to demonstrate that it is a business priority that our strategic objectives will not interfere with our good customers. In fact, you’ll make it a customer-service enabler, and this is how you’ll make it happen.

Taking the opportunity to fall back on your history, showing that you’ve done it before and done it successfully, serves as a good model for doing it again. I had worked for another large retailer where we had successfully rolled out a similar strategy, which allowed the opportunity for our organization to recognize it made sense for us to do it and it’s right for the business. You can’t just go in with an emotional argument. You’ve got to bring facts, you’ve got to bring data, and you’ve got to bring a conviction that what you’re advocating for is going to make a difference as well.

How involved is the rest of your leadership team?

JAECKLE: There’s rarely a time when Mike goes into a meeting with senior executive leadership without pulling one of us along with him. I remember Mike and I going to executive steering committees with all the C-level individuals—merchandising, marketing, supply chain, and so forth—and having to gain their alignment and support on programs or investments in the business.

Most thought that it was all about investigative work because that’s the image we had provided them previously. We worked at informing and educating them to understand that there was a whole different side of the AP business and that loss is comprised of a lot of different things. And the responsibility that everyone has in that is considerably different than what people believed it was before. That was a really interesting time.

ARIGI: Mike has taken the lead, and our executive leadership has responded. We’ve developed a strong working relationship with executive leadership, and that makes all the difference. But it wasn’t simply the reporting structure for asset protection in the organization; it’s the individuals that make the difference.

We reacted to the things that our leadership wanted us to, and we’ve gained credibility along the way. Not only did we execute, but we’ve also exceeded some of those expectations. We took ideas and made them a little bit better—a few more features, a little bit more predictive. As that relationship evolved, I found that our thought processes were very much aligned. That builds credibility and ultimately builds trust, which is why you see all the smiles on this side of the table. It’s fun when it all comes together that way.

SMITH: Mike had experience and understanding of how to manage, how to instill confidence to help us perform, and how to take the team, galvanize them, and get them going in the right direction. There have been a lot of different dynamics and a lot of pressure, but it’s been handled in a way that’s very collaborative both inside and outside the department. I think that’s really been the key—to have someone that shows consistent leadership and has played a few seasons in a leadership role and understands what must happen versus what can we get to later.

Part of accomplishing the things that you want to do involves having the right players. Tell us a little more about how you put together your team.

LAMB: I think as a leader if you rely too much on micromanaging and don’t allow people to leverage the skills that they bring to the table, then you’re never going to accomplish the things you set out to accomplish. I know it’s cliché, but everything starts and stops with people. You can have the best-laid strategy and the most well-thought-through and formulated plan, but having the right people that have a passion about making a difference and are willing to go out and work hard to demonstrate that is absolutely essential.

And it’s not just a question of having quality people; it’s having the right people in the right jobs. I think for any leader perhaps the most challenging decisions you make is getting those people in “the right seat on the bus,” as the saying goes. We’ve been very fortunate to have some really good men and women on the asset protection team, who with the mere notion of a vision or idea or concept have the unique ability to bring that to life.

For example, two years ago, our restorative justice program was just an idea. We challenged the team to make an effective difference in the communities and for the stores with a diversionary program. The new program is being expanded to over 1,500 stores. It has been largely perceived as absolutely appropriate for the business, allowing for good corporate citizenship and serving us in a way that we hoped it would.

In another situation, we took a very calculated but somewhat risky step in reallocating resources. We shifted resources at the door in the highest-loss stores across the United States, a program we’ve dubbed “More at the Door.” The way the leadership team took that concept and made it a deliverable for the stores was just exceptional.

I’m very blessed to have talented people that don’t wait for the day-to-day direction, but take the ball and run with it. Sometimes you’re better served to execute something with speed rather than having meeting after meeting to determine what that next step will be, and just say, “Let’s go.” And I’ve got a group of men and women that really operate with that sense of urgency, and it’s made a difference in the business.

Looking at the idea of finding the “right seat on the bus” from the perspective of someone who aspires to be in that spot, what types of things are you looking for in that type of individual?

LAMB: I would say that above all, it’s attitude. When you spend a little time with someone, you learn to gain a sense for their energy, their passion, their attitude, and their desire to make a difference. Most of what we do in retail that’s technical can be learned.

But having that drive and inner passion—the motivation to really make a difference—is one of the big delineators for me. If an individual can demonstrate those qualities, I think that the sky’s the limit for what they can do.

Certainly, there are some complicated components of retailing. But for me, attitude is everything. You can teach and train the technical skill sets, but it’s hard to teach willingness and attitude. I look for those things above all else.

To me, it makes good sense to spend a dime if you can save a dollar. We’ve really tried to make recommendations and investments in the business where we think it’s most relevant and where we’re going to see the largest payback. Many of our programs are accomplishing just that.

For example, our store returns program has been extraordinarily successful in vetting out and identifying the abusive and fraudulent return customer while ensuring the highest level and quality of service for our good customers. There was a lot of work that went into that in terms of investment, time, cross-functional alignment, and partnerships. A year later we can look back on that and say we know that this is going to be a difference-maker as we move forward.

In the LEAP newsletter, you always send a personal message to the field AP team. How do you decide what that message is going to be?

LAMB: The business we run is fast-paced, and things change with short notice. Whatever we feel is most significant in the business at the time, or is most relevant for the team to hear about from me, is generally what guides that content.

I think it’s important that the team hears from their leader. I also think it’s critically important that they hear how we’re doing as a whole because the newsletter reaches all the way to the hourly AP associate. The majority of our shareholders care about the well-being of the company, so I generally try to incorporate a message that takes into account the health of the department or anything I believe they need to be made aware of or reacting to, based on what’s trending. We’ll attempt this in a variety of ways. We may shoot a video, or sometimes it’s in text. But I always try to bring a message to them that they’ll find relevant and worthwhile.

These meetings that you hold on an annual basis—that seems to really bring your team together. We understand there was a special moment at the last meeting. What was the “shearing of the Lamb?”

LAMB: That was one that started earlier this year. In early 2016, we had a few years where we weren’t necessarily moving in the direction that we wanted to with some pieces of the business. And as a lot of companies do, we set a shrink target.

There’s an expectation to manage that controllable loss, and we tried to set a pretty aggressive target. We owe that to the business, and we owe that to the shareholders. So in an impromptu moment on one of our monthly AP broadcasts, one of my colleagues challenged me that if we were to deliver on our shrink target by our end-of-August annual meeting, I would shave my head—thus the term “shear the Lamb.” So I acquiesced.

Quite candidly, while I had every faith that we would deliver improvement, I had no realization nor did I have any expectation that we would reach this stretch goal. Well, to the team’s credit—due to the hard work of the men and women in AP and our operators—we did in fact just that.

But you know what? I felt going into it that it would be a moment of trepidation, but it was actually a moment of joy. Because, actually, to realize that you’re taking a haircut for the team that had worked so hard to deliver such a meaningful business result made it all worthwhile.

Sounds like it was a moment of joy for a lot of people.

LAMB: There was a lot of laughs and jeers, but all in good fun. I’ve always believed there is nothing wrong with laughing on company time.

Let’s focus a little more on your leadership style. What was the most difficult decision that you’ve had to make as a leader?

LAMB: I don’t think that I can point to one specific decision and say it was the most difficult. But I can tell you that the most difficult decisions that I’ve made on balance is when you have to make the tough decision involving people that, either through lack of willingness, capabilities, or competencies, you’ve got to make a change.

The significance of changing or altering someone’s career, their job, and their ability to earn a living should never be taken lightly. As a leader, I believe it’s incumbent that you always give them every opportunity to demonstrate that as an individual they can succeed and there is a place for them. For me, the most difficult decisions occur when there are no good answers to those questions and you have to make that change.

What do you think are some of the most important lessons that you’ve learned over the course of your career?

LAMB: I would say that, on balance, it’s never as good as it seems. It’s also never as bad as it seems. I’ve always tried to use that as a leveler to make sure that you don’t get overly concerned when you shouldn’t, nor do you get a false sense of security when you shouldn’t.

I also feel it’s important to maintain a healthy paranoia. Looking at some of the best leaders in retailing, I look back at the leaders that I’ve most admired. You really didn’t see them manage things any differently when things were at their best or when things were at their worst. Manage things the way that they need to be managed, and the results will be the results. You don’t want to over-index or declare victory. Particularly in our industry, you can work hard and achieve a desired result. But the reality is you’re going to recalibrate and start over the next year.

I think one of the most difficult challenges for leaders in our industry is to ensure that you work equally as hard or harder as things are improving as you do when they’re not.

The first time I had an opportunity to present to the team at our national meeting after having been appointed to my current role, I knew that we had a lot of opportunities. And as I thought about what message I could leave them with, I wanted it to be a message that not only applied to them, but also applied to me. I wanted my message to say that we’re all in this together and have an equal challenge. Thinking it through, four thoughts came to mind.

Expect to win. I look at business and retailing a little bit like I do collegiate sports. I happen to be a big college football fan, and I believe that winning is an attitude. You’ve got to believe. You should go out every day and expect to win, knowing that you can make a difference—and when you make that difference, you will win.

Be relevant. Insert yourself and have a seat at the table. Make sure your voice is heard. You can, do, and are required to make a difference in the business. Don’t just comply with what you believe isn’t appropriate—speak up no matter your level in the organization. Be a difference maker, and be relevant in the things you do each and every day.

Take a swing. As a baseball fan, you learn that you don’t want to strike out without swinging at the ball. We have programs. We have identified actions that the stores need to take and you need to take as an asset protection professional. Don’t look for the walk—get the bat off your shoulder. Take a swing and make a difference in the business. You’re expected to do that. You have an obligation to do that. And if you’re not doing that, start doing it now.

In too many cases, we wait for someone else to make it happen. Don’t assume that someone else will be the star. You have to take personal ownership, and you have to be the person to take that swing. It’s okay to make a mistake. The road to success is paved with a lot of errors. And don’t be shy about trying to make a difference, even if what you’re doing doesn’t turn out in the way that you think it should. At least swing the bat.

Take it personal. Refuse to lose. We are in this thing to win. Effort is important, but never confuse effort with results. And expect to have that pit in your stomach if you’re not delivering on the things that you have a responsibility to deliver on.

These concepts resonated with me because I could apply each one personally as part of my job. I’ve committed to practicing this each and every day throughout the year, looking to make the same difference that I’ve challenged the team to make themselves.

Let’s talk about the notion that you have to make it easier for the stores to get it right than to get it wrong.

LAMB: I must admit, I took that phrase from my boss. He’s our executive vice president of central operations, and I heard him say it not long after my reporting relationship to him began.

When you walk into a Walmart Supercenter, you’ve got eight or nine businesses in one: apparel and home and automotive and pharmaceutical and food and toys and on and on. It’s a very complex business, and there are many things that will attribute to the losses that we incur as a retailer. As a result, we should spend our time and energy where it’s going to matter most.

Let’s look at the things that are truly critical to the business versus those that may be more trivial. Let’s just be insanely good at driving execution around a select number of things versus trying to be a jack of all trades and a master of none.

We’ve developed reporting and diagnostic tools that apply not only to AP, but also for store operators. That way, we can focus on a select number of things that are going to make a bigger impact on the business as opposed to trying to solve everything.

We always know that there’s going to be shrink in our business. It’s impossible to reduce shrinkage to zero. Focus on the biggest chunks of opportunity, the biggest priorities within the business. And once we’re able to knock those out, we’re able to move on to something else.

In far too many circumstances across retailing, we tend to make it more difficult to get it right than we do to get it wrong. I think you’re better served when you’re able to more appropriately level your resources.

You’ve commented several times on the importance of marketing.DDD_Blocks-(2)

LAMB: I used to work for a leader who would say, “If you don’t know where you’re going, any road will take you there.” For us, we’ve tried to define the road and the road map. I believe that it’s very important to have a mission statement. It’s very important to have an ambition. It’s very important to talk to those things routinely and continue the redundancy of talking about those things that matter. So we’ve set up a three-dimensional approach to managing our business within asset protection we call “Direct. Deter. Detect.”

The “direct” portion means we have a responsibility to design the right tools, the right diagnostics, the right reports, and the right actions for both the store operators and the asset protection teams to take to manage shrink.

“Deter” means we have to do a much better job of at hardening the target and making it more difficult for someone to commit a malicious act of theft at Walmart, whether that’s a customer or an associate. Asset protection will always be responsible for the identification and apprehension of those that engage in theft. But we knew that we had to get more preventative in our approach, so we took a critical look at resources in the field and reallocated those resources, knowing that we had to get better at preventing the incident versus trying to detect it.

It’s the old proverbial saying that, “An ounce of prevention is worth a pound of cure.” We knew that we had to come up with a method that would apply at all levels throughout the organization, being very intentional about the way that we worked and what we asked the stores to do.

The last is “detect” because, despite our best efforts to prevent, we also know that theft is going to occur in our business. We understand that apprehension of those individuals that take advantage of us is just a natural function of what we do.

So we’ve trademarked it, we talk about it, and we’ve got wristbands around it. I think the team has rallied around the idea that these three things matter, and we’re going to keep talking about them because they do matter.

You’ve said, “If you’ve repeated something twenty times, you’re just getting started.” How does that apply?

LAMB: It’s about the redundancy of communication. Communication is arguably the lifeblood of your ability to execute. If you don’t talk about what it is that you expect, if you don’t reinforce through communication the things that need to happen in your business, how do you engage your teams to execute it? You just don’t win.

And you can’t talk about it just once. You’ve got to talk about it—whatever the “it” is—routinely. Repetitively. And when you do that, you start to see the effects, and it becomes contagious. Others talk about it. Then it becomes the way of working, and it’s embraced more by the organization.
We do that a lot, and we’ve selected a few vehicles that we feel will help us accomplish that. The broadcast is one; the newsletter is another. We want them to hear from us what it is we intend to do and how well we’re doing the things we said we’re going to do.

What are some of your thoughts on setting shrink goals?

LAMB: We set an ambition for the organization to reach a measurable point of shrink that we think would represent best-in-class and to maintain that outcome over an extended period of time. We’ve established what we feel that number should be, we talk about it internally, and we rally behind it.

But you must also have a degree of patience. This will be an evolution, not a revolution. The one thing that I think we all have to safeguard against is that shrink has a long tail, and when you begin taking the steps that will help effectively manage it, it takes a while for that to manifest itself.

You also have to be careful that you don’t initiate the launch and leave. Once you implement a program, you can’t look at it ninety days later and realize you’ve left it on the side of the road or you’ve simply stopped talking about it. It may take months and months before you realize the benefit of that initiative and the trailing indicator that is shrink.

What we try to do is identify and understand the leading indicators along the way, those things that give us confidence that the lagging indicator—shrink performance—is going to be at an acceptable level. We have to believe that whatever that initiative is, it will work for us and drive that number down.

Patience is a virtue. What I’ve found in my thirty-five-plus years of managing in this industry is don’t give up too soon. There’s a point with every initiative where you say, “We’ve tried it, it didn’t work, and let’s move on to something else.” But it takes a degree of patience to understand if it will work, and we shouldn’t walk away too soon.

What’s next at Walmart?

LAMB: I’m very fortunate to work for a company that’s very receptive to our suggestions and ideas. Some work for you, and some don’t. But it all goes back to being relevant, taking a swing, and expecting to win. You target those things and make recommendations for the business—no matter what your level in the organization. You then hope that you can make a compelling case, one that makes sense to the business, and in some way, large or small, you feel like you’ve contributed to the success of the company.

Walmart has such a significant footprint and serves such a large number of individuals that no matter what’s happening in society—good, bad, or indifferent—it’s happening at or near a Walmart. That brings about unique challenges and keeps us always in the mindset of continuous improvement.

I’m very pleased with the progress we are making with respect to what we’re doing from the law enforcement outreach perspective, ensuring that we are vested partners with law enforcement agencies across the country. We’ve been able to make inroads through restorative justice with a program that affords the first-time offender the opportunity to avoid criminal prosecution, which lessens the burden on law enforcement. It’s good for the offender who has the opportunity to be rehabilitated and quite frankly good for our business.

We’re constantly looking at how we continue to be a good corporate citizen within our communities, serve our customers in a way that matters to them, and do it in the safest and most secure way possible.

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