BE PERSISTENT AND WORK HARD How To Hold Your Own.(LEADERS & SUCCESS)(IBD'S 10 SECRETS TO SUCCESS)

Byline: CORD COOPER

5The idea that Wal-Mart is killing small merchants is both hit and myth. To be sure, the giant has closed up a lot of smaller shops. But in many cases those merchants didn't know how to compete, says Michael Bergdahl, a former Wal-Mart executive who worked with Sam Walton.

A number of independent and chain stores are thriving in the shadow of the big box, Bergdahl says in "What I Learned From Sam Walton." They're holding their own, he says, by consistently using these principles:

** Be tough on expenses. "Develop a "wastebuster' expense-reduction program and get employees involved," Bergdahl suggested. "Manage your schedules to avoid having employees work overtime. Place the appropriate emphasis with your staff on shrinkage control.

"Ask employees to contribute one good methods-improvement idea per week, and reward (all) expense-reduction ideas that actually reduce costs."

** Learn from competitors. To compete with Wal-Mart, rivals have mined Walton's strategies.

"He believed in looking at every area of the operation, all the time, with an eye on improvement," Bergdahl said. "Small improvements in a company the size of Wal-Mart, multiplied across the chain of stores, potentially represented (sizable revenue increases)." Walton empowered everyone to streamline methods and implement change.