DAVID GLASS WON'T CRACK UNDER FIRE Wal-Mart's boss makes following a legend look easy. His retailing peers have voted him their most admired CEO. And he's not about to let a little bad press ruin his day.
By Bill Saporito REPORTER ASSOCIATE Sally Solo

(FORTUNE Magazine) – ''SO YOU'RE the big man,'' says the shopper, sizing up Wal-Mart's six-foot CEO David D. Glass as he tours a newly opened store in Auburn, New York. Glass doesn't miss a beat. ''Nah,'' he says, ''I just front this deal.'' Some deal. Sales under Glass have grown from $16 billion in 1987, before he was named CEO, to a projected $55 billion for the year just ended. Earnings also more than tripled, from $628 million to an estimated $2 billion. Needless to say, the late Sam Walton, an entrepreneurial supernova, is a tough act to follow. But Glass wears Walton's mantle comfortably, like a favorite sweater, and within the company his leadership is unquestioned. Indeed, the transition at the top has been as smooth as a certain silicate. Although hardly a household name, Glass, 57, emerges from FORTUNE's survey, conducted last fall, as the most admired CEO of the most admired companies. The same executives, outside directors, and security analysts who rated the companies also judged the CEOs. Glass was ranked tops by 58% of those surveyed in retailing -- the best score for any CEO in any industry. (As a company, Wal-Mart is ranked first in retailing and third overall.) His predecessor was a master at publicity, but Glass learned about publicity's downside following an appearance on NBC's Dateline television program in December. He was embarrassingly unprepared when the company was accused, among other things, of buying shirts from a factory in Bangladesh that used child labor, forcing a domestic sweater factory out of business despite a buy-American policy, and displaying imported goods under MADE IN THE U.S.A. signs. Wal-Mart prides itself on being way aboveboard in its dealings with the public -- this is at the core of Sam Walton's philosophy. NBC's implication that the company acts otherwise frayed tempers all over Wal-Martland. ''I bet I've got 100,000 signatures of support ((from associates, as Wal-Mart calls employees)) in my office,'' says Glass. ''They are irate. They want to organize, arm, and eliminate. We can't do that -- although I've thought about it.'' In the on-camera interview, Glass was led deftly by correspondent Brian Ross into commenting on a damning tape showing Bangladeshi children at sewing machines. Glass dismissed the tape with uncharacteristic coldness -- ''There are tragic things that happen all over the world'' -- and shortly afterward another Wal-Mart executive halted the interview with cameras still rolling, the kind of drama reporters live for. As it happens, Wal-Mart's total purchases from Bangladesh last year amounted to $700,000 -- or less than 0.0002% of all the goods the retailer bought. The company insists that its supplier followed that country's labor laws, which allow young people to work at 14 -- the same age as in the U.S. -- and that a surprise visit to the same factory by a company officer found nothing untoward. Glass says that Wal-Mart's payment policies are specifically crafted to deter suppliers from breaking child-labor laws. Observes the CEO: ''I can't tell you today that ((illegal child labor)) hasn't happened someplace, somewhere. All we can do is try our best to prevent it.''

NBC also accused Wal-Mart of playing fast and loose with its ''Bring it home to the U.S.A.'' campaign, in which the company endeavors to buy from domestic sources where possible. A company called Sweaters U.S.A. in Siler City, North Carolina, went belly up, NBC alleged, because Wal-Mart moved its orders offshore to obtain a slightly less expensive product. Glass suggests that mismanagement caused the downfall, not Wal-Mart: The company was still ordering sweaters from the factory when it closed. The knitting machines were bought by a company in New Jersey that is now producing sweaters for Wal-Mart. The network had Wal-Mart dead to rights on one issue: Items in 11 stores sold under a MADE IN THE U.S.A. sign turned out to be imported. The company admitted the transgression but contested the notion that it deliberately misled the public. Wal-Mart says the mistakes were made by associates who simply filled empty racks with merchandise without checking the labels for manufacturing origin. NBC is standing by all aspects of its story. Says spokeswoman Tory Beilinson: ''It caused the biggest reaction of any Dateline show.'' The program generated 7,000 calls and letters, Beilinson adds, ''mostly from Wal- Mart employees, from sales clerks on up, yelling at us for slinging mud at the company.'' If the program actually hurt business, you couldn't prove it by Wal-Mart's December sales, which rose 10% in stores open at least a year and 25% overall, leading the industry by a wide margin. No. 2, Kmart, for instance, posted increases of just 2.4% for stores open a year or more. SAM WALTON had to try several times before he could persuade Glass to join the company as executive vice president of finance 16 years ago from the Consumer Markets chain in his home state of Missouri. Walton was forever stirring the management pot, and in 1984 he pulled a high-level job swap, making Glass, then the CFO, president and chief operating officer and requiring vice chairman Jack Shewmaker to give up the stores for the financial chores. The switch created a very public succession race in which Glass became the front-runner. Unprepossessing is an adjective that fits Glass nicely, although even this word might strike Wal-Mart types as too luxurious or expansive. Sam Walton had more wealth than a warehouse full of sheikhs but traveled like a Bedouin. Although Glass is fond of telling stories about how cheap -- er, thrifty -- Sam was on the road, his style isn't much different. Yes, he does have a Learjet, a concession to the transcontinental distances that he now has to cover. But an empty seat on a Wal-Mart aircraft is viewed with a Calvinist sense of wanton excess. On a 2 1/2-hour trip from Bentonville, Arkansas, to Syracuse, New York, to visit two new stores in nearby Auburn and Seneca Falls, the six-seat Lear is jammed with buyers checking out what customers want. Glass spends two or three days a week in the stores and would like to spend more. To him it's simple: ''Not much constructive ever gets done in Bentonville,'' he says of headquarters. Pulling into Auburn, Dennis Ford, a local manager, explains that Wal-Mart visitors are staying at the Super 8 Motel. It's not as if the other choice is the Four Seasons; the local Holiday Inn wouldn't make a special deal. ''They wanted $75!'' Ford says indignantly. The visitors check in, and Wal-Mart saves $35 a head. Dinner is at the Ground Round, where a college basketball game is blaring so loudly from the TV that serious conversation is difficult. So Glass talks hoop. Like all Wal-Mart executives, he is a de facto University of Arkansas Razorbacks fan, although he went to Southwest Missouri State. UNLIKE SAM, a tennis and hunting fanatic, Glass is mostly a spectator -- and a baseball junkie. This year he is particularly excited because he claims to possess a contract from the Houston Astros to play shortstop on Tuesdays and Thursdays. Explanation: His friend Drayton McLane, a Wal-Mart vice chairman who sold his $3-billion-a-year family wholesaling business to Wal-Mart in 1990, just bought the team. Says the rookie infielder: ''You can bet I'll be scheduling some store visits in Florida during spring training.''

A day of touring stores in upstate New York begins with a 6:15 A.M. breakfast with the buyers from Bentonville and local associates. Glass announces that he is pleasantly surprised with sales and operations in the region, and in the Northeast in general. Some analysts figured that this part of the country wouldn't cotton to Wal-Mart's just-us-folks style. At the stores, Glass's style consists largely of breezing along the aisles, notebook in hand, and asking about a million questions, not counting ''How y'all doing?'' How are sales? he wants to know. What's the competition doing? How is apparel selling? Who's the biggest competitor in menswear? Department 19 isn't doing well; got any ideas? Should we be doing something different? Where did you work before you came to Wal-Mart? Are you challenged enough by the work? He is absolutely at ease on the sales floor, bantering with associates and customers, and injecting wry comments. One department head complains that the store doesn't have ecologically correct trash bags: ''No? Well, the buyer's up here today. Just go and hang him.''

Glass never goes anywhere without checking out the competition, which provides him with an endless source of ideas. In Auburn and Seneca Falls he is disappointed: Neither Kmart nor Ames seems to have much worth stealing. But Kmart is deadly serious about claiming the low-price crown, and Glass is particularly intent on holding it. Again and again he asks his own managers about pricing. He tells one not to play tit for tat with prices on a couple of items. If you're going to have a price war, he says, have a big one on a slew of items. His orders: ''Don't be defensive. They think we're offensive anyway. So go ahead and offend.'' If the competition starts a price war, they'd better have their checkbooks handy. Throughout his tours Glass is stopped by employees seeking him out. At the fabric department, the manager presents him with a garish, red, patterned tie. + He dons it immediately. Repeatedly, associates at all levels ask him for autographs, or to have their pictures taken with him. He unfailingly obliges. Associates need not wait until Glass comes to town to talk to him. At the motel in Auburn a call comes in around 11 P.M. from a warehouse worker in Texas who complains that he was unjustly fired. How did he get the number? The worker, one of 475,000 Wal-Mart employees, called Glass's house and Mrs. Glass gave it to him. The Glass house is on the east side of Bentonville, Sam's old neighborhood, and if anyone wants to throw stones, they know where it is. He gets calls at all hours -- ''after the bars close,'' he says nonchalantly. Wal-Mart executives know better than to confuse Glass's self-deprecating style with a tolerance for mediocrity. At one warehouse a manager proudly tells him the depot is 99% in-stock; the industry average for having goods on hand is 95%. ''Bill, why would it only be 99%?'' Glass wonders. Says a senior executive: ''There's no question that his expectation is 110%. I mean, he never has to tell you. You know what it is before you ever talk to him.'' Although Wal-Mart's rah-rah style is sometimes criticized by sophisticated types, a steady stream of corporate heavyweights finds its way to Bentonville to see what the noise is all about. GE boss Jack Welch is a welcome visitor -- despite owning NBC. When former Procter & Gamble CEO John Smale took over as chairman of General Motors, one of his first exercises was to cart CEO Jack Smith and other GM executives to a Wal-Mart management meeting, presumably to learn how to make a decision without using a calendar. Executives from IBM, Eastman Kodak, Southwest Airlines, Sara Lee, P&G, and Anheuser-Busch have all made the trek. Another chief executive, President Bill Clinton, is an admirer, as is Hillary Clinton, who was a Wal-Mart director for six years. Despite Wal-Mart's stupendous growth, Glass believes that ''there's more opportunity ahead of us than anything we've experienced before, if we're smart enough.'' To him that means maintaining an organization of compulsive overachievers, constantly challenging them to listen and learn and accomplish more than they do currently. The company is growing internationally, with operations already under way in Mexico and Puerto Rico. At home, there's heavy money on a concept called Supercenter that combines a discount store and grocery store under one roof. The division is off to an underwhelming start, but Glass is not alarmed. Wal-Mart associates, he says, will find a way. Says he: ''Our people are relentless.'' Just like their boss.

CHART: NOT AVAILABLE CREDIT: SOURCE: CLARK MARTIRE & BARTOLOMEO CAPTION: THE MOST ADMIRED CEOs

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: WAL-MART STORES