Ten Management Lessons From Sir Terry
In 1992, Tesco was about half the size of behemoths Marks & Spencer (then the most profitable company in Britain) and J. Sainsbury (the leader in food), both of whom occupied leading positions not only in sales, but in the hearts of consumers. Today, Tesco, which offers its customers everything from food, electronics and clothing to financial services and mobile phones, has outpaced those companies exponentially, to become the third largest retailer in the world. This didn't happen by accident. In a Super Session at the National Retail Federation's (NRF) annual conference last week, Tesco's chief executive Sir Terry Leahy shared the following 10 management lessons he's learned over the years that have contributed to the company's soaring success.
1) Find the Truth
It's "difficult to confront the truth" says Leahy, "but if you can figure out where you are, you can map a path" that will lead you in the right direction. Most people look for confirmation of what they want to believe, and there are plenty of people who will provide that for you. "Everyone is trying to get up the greasy pole," says Leahy, but if you really want to find the truth, the best person to talk to is your customer. Customers will tell you what's good and bad about your business. They'll even tell you how to fix it.
2) Audacious Goals Do Work
As an example, Sir Terry Leahy references his hometown of Liverpool, which was falling off the charts in terms of growth and prospects. Instead of a 250,000 square foot mall originally proposed, the city decided to take a massive leap and built a 1.5 million square foot mall, which attracted major business to the city and proved a valuable vehicle for growth. Liverpool is now the 2nd largest city in the British Empire. At Tesco, the company set a goal to become the No. 1 Choice in the United Kingdom and a leader in global retailing. At the time, the goals seemed lofty, but they tapped into the desires of what people at Tesco wanted to achieve, and they did.
3) Vision, Values, Culture
People matter more than everything else, but you have to galvanize them behind an idea. It's about making small improvements in peoples' lives to earn their loyalty ââ€塬â╬Å" both employees and customers.
4) Follow the Customer
Businesses change slowly, but customers change in an instant, says Leahy. Whatever is going to be big in five years is already happening now. You just have to pay close attention. Case in point. In Britain, it was traditional for shoppers to do one big shop per week, says Leahy, but Tesco noticed that busy schedules were changing the way they shopped, to more frequent but shorter visits. To accommodate this change, Tesco launched its convenience stores, which he says have been very successful. The category of "convenience" is, he says, the fastest growing sector in the world, with the exception of the United States. Still, the company is finding some success with the launch of its Fresh & Easy convenience stores launched here a few years back.
5) The Steering Wheel
Make sure to set up a structure (in Tesco's case, a "wheel" chart) that relates the big picture goals and ideas of the company to all of your employees, regardless of their position.
6) People, Process, Systems
These three areas of business are often viewed separately, to their detriment. If you link all three areas: what people do, the workflow, and the systems that support that, you will create the ability to execute rapidly. Wal-Mart, Leahy says, had an early understanding of this and it is part of what has made the company so successful.
7) Lean Thinking
Citing Toyota's lean manufacturing system, Leahy stresses the importance of identifying the bottlenecks in your system ââ€塬â╬Å" within or between organizations -- and fixing them. After all, you're only as strong as your weakest link.
8) Competition is a Good Thing
Don't expend energy trying to figure out what your competition's weaknesses are. Seek out instead their strengths. "You can copy them as much as you like," says Leahy.
9) Simple Beats Complex
We have more and more information at our fingertips. The only way to navigate through this complexity is with a culture of simplicity.
10) Leadership
It does matter, says Leahy. It makes a difference. But it's not so much what you do as a leader, as what you cause others to do. "A leader takes you farther than you would have gone on your own," he says.
Jordan K. Speer is editor in chief of Apparel. She can be reached at [email protected].
1) Find the Truth
It's "difficult to confront the truth" says Leahy, "but if you can figure out where you are, you can map a path" that will lead you in the right direction. Most people look for confirmation of what they want to believe, and there are plenty of people who will provide that for you. "Everyone is trying to get up the greasy pole," says Leahy, but if you really want to find the truth, the best person to talk to is your customer. Customers will tell you what's good and bad about your business. They'll even tell you how to fix it.
2) Audacious Goals Do Work
As an example, Sir Terry Leahy references his hometown of Liverpool, which was falling off the charts in terms of growth and prospects. Instead of a 250,000 square foot mall originally proposed, the city decided to take a massive leap and built a 1.5 million square foot mall, which attracted major business to the city and proved a valuable vehicle for growth. Liverpool is now the 2nd largest city in the British Empire. At Tesco, the company set a goal to become the No. 1 Choice in the United Kingdom and a leader in global retailing. At the time, the goals seemed lofty, but they tapped into the desires of what people at Tesco wanted to achieve, and they did.
3) Vision, Values, Culture
People matter more than everything else, but you have to galvanize them behind an idea. It's about making small improvements in peoples' lives to earn their loyalty ââ€塬â╬Å" both employees and customers.
4) Follow the Customer
Businesses change slowly, but customers change in an instant, says Leahy. Whatever is going to be big in five years is already happening now. You just have to pay close attention. Case in point. In Britain, it was traditional for shoppers to do one big shop per week, says Leahy, but Tesco noticed that busy schedules were changing the way they shopped, to more frequent but shorter visits. To accommodate this change, Tesco launched its convenience stores, which he says have been very successful. The category of "convenience" is, he says, the fastest growing sector in the world, with the exception of the United States. Still, the company is finding some success with the launch of its Fresh & Easy convenience stores launched here a few years back.
5) The Steering Wheel
Make sure to set up a structure (in Tesco's case, a "wheel" chart) that relates the big picture goals and ideas of the company to all of your employees, regardless of their position.
6) People, Process, Systems
These three areas of business are often viewed separately, to their detriment. If you link all three areas: what people do, the workflow, and the systems that support that, you will create the ability to execute rapidly. Wal-Mart, Leahy says, had an early understanding of this and it is part of what has made the company so successful.
7) Lean Thinking
Citing Toyota's lean manufacturing system, Leahy stresses the importance of identifying the bottlenecks in your system ââ€塬â╬Å" within or between organizations -- and fixing them. After all, you're only as strong as your weakest link.
8) Competition is a Good Thing
Don't expend energy trying to figure out what your competition's weaknesses are. Seek out instead their strengths. "You can copy them as much as you like," says Leahy.
9) Simple Beats Complex
We have more and more information at our fingertips. The only way to navigate through this complexity is with a culture of simplicity.
10) Leadership
It does matter, says Leahy. It makes a difference. But it's not so much what you do as a leader, as what you cause others to do. "A leader takes you farther than you would have gone on your own," he says.
Jordan K. Speer is editor in chief of Apparel. She can be reached at [email protected].