Tesco: strategy, implementation, brand and sports metaphors

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LONDON — ‎In America they call is being ‘an armchair quarterback’. I’m fond of the term back-seat-driver. I think there are more.


Yesterday for UK football fans the sight Glaswegian misery that is Sir Alex Ferguson ‎sitting in a Man City armchair watching his old team Man United lose was enough to make everyone in the building feel about 2 inches tall.


Today it’s Terry Leahy’s turn. His contribution to the Tesco debate is to say that his successor at the controversy-hit food retailer is a bit rubbish. And, perhaps more importantly, not Leahy.


Although reports on Leahy today come from a call organised by one bank for other financial analysts, the contents are still sharp and stinging. You know that the parts of that discussion that have emerged in black and white are either planned, or they should have been. And the handbags between old and new CEO seem likely to help no one.


Strategy and implementation


Sir Terry says that Tesco has pursued the wrong strategy. In commerce that is the equivalent of a schoolyard invocation‎ on someone’s mother. Your strategy is what you are there for. And it’s also the easiest target. Those close to Tesco talk about the extent to which the business was limping into its final days of Leahy’s 16 year reign. Exhausted, angry and over-stretched. A new and more coherent strategy may have been just what they needed, or it may not.


However, blaming strategy‎ is somewhat akin to blaming the Manager for poor play on the field. The strategy needed to be effectively implemented for it to be successful. And over the last 5 years Tesco has started to lose its ability to implement. When that happens then very little can go right.


Donut brands


Leahy also levels the accusation at his successor that the business has failed to protect its core. And is instead focusing too much on things for which it is not know. “What it is, is a very big brand in the centre of the market, and clearly if you’re weak in the centre you can get attacked from all sides,” Leahy said.


And it is a compelling picture. How to manage and profit from your brand is a major issues for many great companies. And one that many of our clients are also taken with. However, Sir Terry was famously known for the Tesco venture into America that went horribly wrong. And the business in the UK has expanded so quickly in recent times that the modest management provided from 1950s offices in Cheshunt hasn’t been able to keep up. Like the city of Atlanta, the centre had probably become so unliveable that everyone flocked to the suburbs.


Keep moving


Businesses like Tesco, in vital and dynamic markets that don’t slow down and constantly change, need to be forever agile. There’s no hanging around. You may need to keep adjusting and fine-tuning the strategy‎. But you have to keep implementing. You cannot stand still.


Similarly you have to approach your brand more like a crumpet than a donut. Keep your focus broad but with space for air to get in‎ at every part. The brand strength is definitely at the centre but can most easily burn value at the edges. And it needs to be open and receptive enough to accommodate whatever comes its way.


Sir Terry surely set out to cheer on his old business. And his ‘quiet’ chat with analysts was undoubtedly set out in good faith. The issues the business face are institutional and need the support of everyone: team, Manager and spectators.

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