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Exit Interview

Exit Interview: Leslie Dach, Walmart

<p>The departing executive VP who oversaw the retail giant&#39;s sustainability efforts shares what he&#39;s learned.</p>

Exit Interview is an occasional series profiling sustainability professionals who recently have left their jobs.

Leslie Dach, Walmart's executive VP of corporate affairs and government relations, has overseen the company's sustainability efforts since his arrival in 2006.  He arrived at a time when the company faced withering attacks on a host of environmental and social issues. During his tenure, the company launched a spate of sustainability initiatives, from energy conservation to supply-chain issues, partnering with a wide range of nonprofits along the way. Dach himself came from that world — he lobbied for Audubon and Environmental Defense Fund, in addition to working in the Clinton administration and for John Kerry's 2004 presidential run.

I spoke with Dach about his tenure at Walmart, which ended last month — what he learned about trying to make change, at scale and in a fishbowl. The interview has been edited for clarity and length.

Joel Makower: First, tell me what your job description has been at Walmart.

Leslie Dach: I would say overall it's been to try and help make us a better company by looking at the large issues where we can make a difference that are good for the business and good for the customer. And underneath that, being responsible globally for government relations and public policy and communication. And putting that together with what we call our Live Better initiatives, which includes finding, designing and building the work that we do on sustainability, agriculture, women's economic empowerment and job opportunities. And then our giving, which is still quite large. Last year we gave away over $1 billion in cash and in-kind.

I think the goal of the job description, in business terms, is creating our freedom to operate, improving our relationships with the key decision makers and with our customers, and continuing to position us as a good neighbor and a good partner in all the countries in which we operate.

Makower: Talk a little bit about the Walmart that you walked into in 2006, in terms of environmental and social reputation.

Dach: I felt that Walmart, like many other big brands, found itself in a position where, in a sense, the world expectation of the brand had changed. They were a company that had tremendous customer trust that went to work every day and saved people money so they can live better, and behaved in an ethical way. And they felt that’s what they needed to do. They had a great business. Their business helped people. They ran it ethically.

I think what happens is that as you get to be of a certain size and your brand reaches a certain place and you grow around the world, people understandably have different expectations of you. And the company needed to catch up with that. So when I came, it was realizing that it needed to do that, that just doing what it had done wasn't going to be all that it needed to do.

I think (Hurricane) Katrina was very important because the company responded naturally to that, and it got a lot of positive feedback for using its business in a way that people said made a difference. That allowed, when I came here and had the first conversations about, "Okay, how do we have people see us for who we really are? How do we combat some of these embedded negatives that the brand had issues like its impact on small business?” — I think the leadership made a fundamental decision that rather than just tell a better story, it would need to be a better business.

In my consulting days, there were so many companies who wanted for people to think better about them, but they were unwilling to be a better company. They just wanted to tell a better story. And they just felt that if people just knew the real facts, things would be better. That was all true for Walmart. A lot of people thought the company didn't offer health insurance, but it did. So just telling people the facts made a difference. The company said, "We're not just going to stand still and just tell people we're misunderstood. We're going to go be a better company."

For a long time, companies, including Walmart, saw this engagement with civil society — the willingness to go out there and talk about these big issues, and to put itself in the public debate on that — as a risk, and they saw addressing these issues as a risk-management strategy.

The other inflection point that the company was at, was that it said to itself, "These are opportunities for us." When you see something as an opportunity you can go much further than if you see it as just a risk-management strategy. I came at a time where those things were kind of ripening, and one could begin to both fertilize them and harvest them together.

Makower: Of all the issues on your plate, it seems that you took on environment first, at least in terms of a big public way. What was the calculus behind that?

Dach: I think the company looked at it and said, "Where are the places where our business has an impact, and where our business can make a positive difference?" And it happened to be a personal interest of some of the leaders, and I think that all came together.

And it appealed to the everyday low-cost model of the company because energy, waste reduction — those were everyday low-cost strategies as well as sustainability strategies. So it was a great marriage between the business model and the issue that was clear to people.

Makower: This is also a personal interest of yours. You've lobbied for Audubon and Environmental Defense Fund.

Dach: It was a great thing for me because it was a place that I'm personally passionate, having, as you said, worked for both EDF and Audubon, and been on the Audubon board and the World Resources Institute board. It was a place I could make a contribution, so it was a great personal opportunity. I think what happened is that the model got established there — the model, the methodology and the rewards — you could bring elsewhere. So success in sustainability gave us, internally and with civil society, the credibility to do other things.

The company learned to talk to people who it would normally not have talked to before. It learned the value of talking to people who might be skeptical. It learned the value of being transparent about these things. It learned that you could learn so much from civil society on these things. We developed this model of reaching for really big things, even though we didn't know how to get there. And we succeeded, so people inside the company saw the value of it. And then when we moved onto these other things.

I think the foundation world, the government world, the civil society world and the business world all realize that if they really wanted to do things, they were better doing them together, and people were willing to work on the upside of that and not have arguments with each other about who was more right. People were willing to stretch and find common ground. That’s made a big difference — not only for us, but I think for almost everybody who's worked in any of these areas.

Makower: You've been on all sides of the fence on the NGO front. You've been part of them, you've worked with them and you’ve faced them, perhaps in some less-than-pleasant circumstances. What have you learned about working with NGOs that other companies might benefit from?

Dach: First, it's about working transparently and sincerely. That way your relationship is the best, and it means that you can share uncertainties with each other. You can be more honest with each other.

Recognizing the core elements of the partnership, which is that we rely on civil society for their expertise and for their conscience, and they rely on us to be a way to get things done at scale.

You can't change the way people fish unless the people who fish and buy fish change the way they do things, no matter how great an idea you have. Working together in that way allows both sides to see the value.

A lot of the NGOs we do the most with we don't have a financial relationship with, because it helps preserve their independence and credibility. But we're doing really deep work together. Looking at the relationship as how do you solve a problem together, not how do you do a reputation thing together, or how do you fundraising together, is another secret to this.

Makower: What are some things you shouldn’t do together with NGOs — roads that you went down that maybe weren't as fruitful?

Dach: I think it's always tougher to go down the road of fundraising first, because they have an agenda and you have an agenda, and now all of a sudden, you can be disappointing each other. But there's so much commonality in the work. I think if you look at it through the prism of the work, there's so much to do. But if you look at it through the prism of kind of pure financial support, that limits you.

Makower: Are there some type of problems that you found were easier or more effectively addressed than others?

Dach: Take an issue like climate, for example. Nothing we’re doing is solving that issue, and nothing we’re doing is a replacement for an ultimate engagement of government on an issue like that. But the retail sector and the supply chain can make a meaningful difference. So you have to recognize that. If you think you're solving a whole problem through these partnerships, that's just not correct, and it isn't the right way to go. I think you have to recognize where the contribution is and where the contribution just can't go.

Makower: There's a phenomenon that I long ago dubbed the Tyranny of Brand Leadership, where brands leaders are never seen as good enough. I sum it up in six words: “Nobody beats up on Burger King.” Has that been true at Walmart?

Dach: Very true. We're in a fishbowl and we know that. We fully understand that our partners don't need to be fully satisfied in order to be helpful, that they have a job to keep pushing. You can't have a thin skin when you read in the papers it's “a great first step.” Also, you have to realize in today's world there are professional critics. There are just going to be some people who no matter what you do, they're going to paint it negatively.

The part that I find the most frustrating in what you described is that people have a tendency to criticize each other's change — "My change is bigger than your change. My change is better than your change" — as opposed to working together. And so if the NGO's going to criticize, "Our change is bigger than your change," you're not going to get things done.

What the media does and so many people do is they just put it all into a public relations box, and this is what frustrates me the most. People say, "In an effort to deal with their reputation… " That is really wrong, but it also, I believe, inhibits progress. Because first it says to everybody, "You can't have this new model because it's all about looking good.” And that when it's really about being a better business — lowering cost, being able to recruit better, providing your customers with something that they value. So I think that's a big issue and a big problem.

If people just said, "Is this good for PR?" you wouldn't do these big things we're doing.

Makower: To that point, I think a lot of what you and other companies do, you don't really talk about much. The paradox is that often, the things companies do that are most impactful they don't talk about, and the things they do talk about aren't always that impactful. Is it easier to work under the radar in some ways?

Dach: I think it's important to work under the radar. If you have a business the size and scale of ours, in order to put the systems in place to get the work done, it is a lot of work. I think it's a really interesting story that kind of gets under-written. We'd love to get recognized for all the things that we do. But to what I was saying before, if that's why you do it, that's a bad strategy. If how much you could get covered was your filter, you would do one-tenth of the things that you did. So having the media be your filter is a really bad idea.

People also underestimate the amount of work. So we say we're going to source $20 billion in women-owned business. Well, first we spent nine months trying to really understand: is the number $17, $20, or $25 billion? There’s a back-and-forth of us bringing the business to a place it’s a stretch goal, where we're willing to be on the public hook about it but we still don't know how we might get to the last $8 billion or something. Then we have to do even more work. We've got to go sector by sector and say, "Okay, of all the things we sell, where can we find more women-owned businesses?"

Then we have to from advisory committees. Then we have to hire people to find and nurture and train suppliers that work within our system. Then we have to give report cards to each of our buyers, and then we have to figure out how to agree that there's going to be something in their evaluation. And then we've got to provide recognition for them so that they understand that they can get recognized for doing that. So there's a lot of work. You've got to see it through that lens or else you can't get it done.

One of the things that NGOs see is that it's not easy to get these things done. If you're in civil society, you learn a lot by hanging out with us because you see what it takes to do these things. Many of them start off with a simplistic version. They don't understand all the work it takes to do $20 billion worth of sourcing or to multiply our renewables sixfold across 28 countries with each having different incentives, different cost of electricity to blah, blah, blah, blah.

Makower: The assumption is that you're Walmart. You're the biggest retailer in the world. Whatever you say goes, and you can just do it.

Dach: Look at the Sustainability Index. We spent years, along with others, creating the structure, getting people to join, doing all the science and putting the science into scorecards, training our people to have a conversation based on the scorecards, getting our most senior people when they meet with a CEO to bring that into the conservation, giving them the talking points and experience they need to have a real conversation. All of that is years of work, and it's a lot of work.

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