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BW Businessworld

Every Little Word Helps

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Terry Leahy grew up in a working class Irish-origin family, lived in a thin-walled prefab home in a poor Liverpool neighbourhood and stacked boxes in a supermarket. He eventually became the CEO of the same chain he got a part-time job at, Tesco — the third largest global retailer. In Management In 10 Words, he distils all his experience and learning in retail, but never talks about his personal story, except for a brief mention at the beginning. And that makes this a unique work. Leahy is unlike other CEOs who have gone to town to self aggrandise ‘their’ story in books on their organisations. He looks at how Tesco grew thanks to great teamwork and puts the spotlight on the values and the people (consumers and staff) that built the brand.
The Tesco story itself is well known: Jack Cohen started selling tea from a wheelbarrow, and created the brand blending the first two letters of his surname with the initials of a tea supplier. Cohen built a business that eventually became the third largest retail chain in the UK by the mid-1960s. But the original family business motto of ‘Pile ’em high, sell ’em cheap’ could only take the chain to a certain point. Leahy documents the changes both Tesco and retailing have gone through since then. He does this by identifying 10 words (values, rather) that he sees as critical to driving a business and creating the leadership which changed Tesco: truth, loyalty, courage, value, act, balance, simple, lean, compete and trust.
The book has a chapter for each, with examples from Tesco in particular and retailing in general. But the Tesco examples make for more interesting reading. The book illustrates the values that are core to Leahy’s beliefs — from tackling employees who call in sick (or often just didn’t call) to building an emotional connect with customers with the ‘Every Little Helps’ strapline or getting farmers to develop mobile pack houses to ship fresh lettuce.
Leahy’s motto is simple and basic: ‘be close to the customer’. Earlier, realising that customer satisfaction at Tesco was in a silo, a number of areas were picked to focus on the customer. These included ensuring that all 3,000 managers spent a week every year in the store, setting up a club card loyalty programme to predict customer spends and behaviour, involving employees in identifying consumer problems — a simple moving of the barcode on the sandwich packing (an employee idea) resulted in a million sandwiches sold daily by Tesco being scanned quicker, improving customer satisfaction by reducing time at the till and saving half a million pounds — and launching a financial service based on the trust Tesco developed with customers (a study found customers visited a Tesco store more often than their doctor) and more.
While Leahy mentions some failures (China and East Europe, and not anticipating the bouncing back of the small convenience store in the UK) and understands that organisations need to learn from failures, he glosses over some — problems with the US initiative, for example. An important omission is the probe by the UK government into allegations of supermarket chains squeezing and bullying their suppliers. Following a recommendation by a UK commission, the government has set up an ombudsman to monitor supplier relationships. Probably, Leahy is too close to the event to comment on it. Quite interestingly for us in India, Leahy identifies the Tatas (with whom Tesco has a tie-up) as a family that runs a fairly unique business globally, in terms of  ethics, value and beliefs that the family brings to business itself.
Given the wide experience and lessons that Leahy has in management and business, I suspect that we would hear of him again in another avatar, possibly bringing his 10 words to the public, including government and social issues.
Badhe is a retail and marketing consultant
(This story was published in Businessworld Issue Dated 01-10-2012)