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Terry Leahy, a CEO view on communication
29 June, 2012 - 09:15
'Management in 10 Words' by the former CEO of Tesco puts communicators in their place - but he offers some insights into what good employee communications looks like from the top.
Terry Leahy is arguably the most successful business leader in the UK. He not only turned the company into the largest supermarket chain in the UK but also transformed it into the third largest retailer in the world with 6,000 stores and operations in 14 countries in Europe, the US and Asia.
His success is perhaps all the more interesting as he does not fit the classic hero CEO model; he does not have the charisma of a Branson nor the brash aggression of a Sugar. Highly intelligent from a modest background, introvert and a meritocrat he is the epitome of a middle manager; diligent, hard-working but maybe just a little dull. When he was promoted to Marketing Director he did not indulge in a dramatic rebrand and advertising campaign. Instead he commissioned the most exhaustive customer research in the history of Tesco - and I suspect of any FTSE 100 company. And then he acted on what customers told him they did not like about shopping at Tesco and set about fixing things detail by detail.
Perhaps it is no surprise therefore that he has been so successful; the man is completely transparent - there are no hidden agendas. Apart from of course global domination. And unlike many UK retailers who have tried to force their brands on uncomprehending cultures, Tesco seems to have had some success adapting their winning formula to very different markets such as South Korea.
Management in 10 Words is divided into 10 key topics headlined in each case by a single word. The chapter that resonates most for internal communicators is the one called Values.
"Values have become part of the wallpaper of every corporate communication, plastered up by well-paid consultants who devise the values and then walk away, leaving the management to ‘implement’ them. Organisations that behave like this fail to understand that values are critical to success. Without them, a company has no soul, no guiding compass. Clear values set a framework for good behaviour, a sense of discipline and an environment in which people feel confident and secure."
Leahy is not always rude about consultants- but only if they stick to the brief of what customers want - and can prove it with hard data. This is the man after all who pushed through the Tesco ClubCard - a key plank in the company's growth as it got closer to everyone's buying habits. Also values do actually mean something at Tesco. When almost all large companies were ditching their defined benefits schemes Tesco hung on to theirs and today a Tesco pension is worth two and a half times that offered by the other large retailers. It was an expensive choice for the company but Leahy was determined that he would live by the value of treating others as you would expect to be treated yourself.
The man may be dull but he is principled and it is clear from the book that he eschewed the bullshit of old-school internal communications:
"Usually, the ‘internal communications’ department at a company’s headquarters produces presentations and piles of bumf for managers to dole out to their teams. That would have defeated the entire purpose of the exercise. Our teams had to express, in their own words, what we were trying to achieve: it had to be their plan, not ours. And this worked well. Whenever people from outside visited Tesco, they always commented that, no matter who they spoke to, at whatever level, Tesco staff always seemed to know and feel part of the big picture. The Town Meetings began to paint the canvas."
In the 14 years he spent as CEO Leahy reckons he has met face to face over 10,000 managers. He did this the hard way - just 200 managers at a meeting sat at round tables with him in the middle. The majority of his time spent with them is in Q&A.
"To help a team in any organisation understand what is expected of them – how they should behave, what the purpose of the organisation is and how they fit in – you cannot rely on a memo or an email, nor can you take the easy option of sending round a DVD to be played. Nothing beats a face-to-face talk. I stress the word ‘talk’: not high-flown rhetoric, full of gushing phrases and big words, but a simple chat, explaining what you are there to do, how you are going to achieve it, and why each and every person listening has an important role to play."
Face to face is not just for senior management. Leahy describes the cascade process they implemented which is short but frequent to match the fast rhythm of their mammoth retail operations:
"Each day in stores, depots and offices, managers would brief their team leaders who, in turn, briefed their teams. We called them Team Five meetings – because they only took five minutes and so they could be done standing up. Those five minutes made a big difference, as everyone then knew what was going on and that they had a part to play. Even in the age of instant communication, it takes a manager longer than five minutes to compose a bad email."
As you can tell from the last comment Leahy's book is not without pith and wit and I am sure that anyone working in retail or a large distributed business will benefit from reading 'Management in 10 Words'. The abiding sense you get from the text though is that Leahy is more a man of action than words and it is perhaps a shame that his formidable talents are not being put to use in another FTSE behemoth.
Terry Leahy talks about how Tesco adapted to the context of local culture in South Korea and how that experience changed their own view of customer service.
Marc Wright is the publisher of simply-communicate and chairman of the simply-group
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