Consumer

UK Retail: The Silver Linings Playbook

 



  1. Leadership & Talent

    • The crisis did not create world-leading CEOs overnight. Those that excelled had the building blocks in place: a leadership team they trusted and vice versa; a robust operating model; a flexible channel strategy; and a balance sheet that allowed for an escalation of costs.
    • What the crisis has achieved is shining a light on the stars further down the organisation; those who have stepped up, displayed bravery and empathy, and made their voices heard. On the reverse, there were also leaders who shrank from the challenge, unable, or unwilling, to make their voices heard when it mattered most.
    • Unwieldy teams, over-engineered structures and (unnecessary) bureaucratic processes have revealed themselves to be a hindrance when fast decision-making and bold leadership is required.

    LEARNINGS FOR ORGANIZATIONS

    • Leadership has been tested: replace those that didn’t show up, and build on the success of those who did, recognising them through development plans, succession sign-posting and promotion.
    • Engagement and kinship among colleagues within the organisation is at an all-time high. It’s important not to get complacent but to supercharge this energy and goodwill.
    • Talent market: the grocery industry and broader retail sector is being viewed with fresh eyes. Companies and leaders are seen as resilient, pacey, pragmatic and innovative. Retail has become an authentic and attractive place to work. It is also seen as a hotbed for impactful talent.
  2. Pace & Agility

    • Necessary at the beginning of the crisis when the news flow was relentless. Big decisions were made with fewer committees, fewer meetings, less information and expedited approval processes.
    • Ingrained ways of doing things vaporized: age-old term sheets were torn up to keep small suppliers solvent; TV ads were shot using mobile phones; typically rigid trading hours were relaxed and flexed; recruitment processes rewritten.
    • The impact was phenomenal: tens of thousands of workers were hired and trained in weeks; the online grocery share almost doubled to 13% in 12 weeks (it had taken 23 years to get to 7%); and partnerships were quickly formed with third-parties.

    LEARNINGS FOR ORGANIZATIONS

    • Tighter and flatter teams enable faster decision-making as well as the ability to course correct. Bringing different levels of the organisation together provided leaders with a more vivid and far better understanding of front-line challenges.
    • Transparent decision-making, fueled by video conferencing, forced decisions with a fixed deadline. This also removed backdoor conversations and canvassing.
    • Colleague empowerment both at head office and in stores: once the direction was set, teams have been allowed to get on with their work and pivot where necessary at a local level.
  3. Colleagues & Community

    Frontline workers in the grocers (in stores, warehouses and on the road) fed the nation in stressful and dangerous circumstances. Key Worker Status was granted at the beginning of lockdown and was reflected in how colleagues were treated:

    • Protection: the provision of PPE, the increasing of contactless limits, the hiring of additional security, reduced trading hours all combined to better protect colleagues.
    • Celebration: On social media and in TV ads, colleagues were deservedly celebrated and recognized for their collective contribution. This has had a powerful impact on brand.
    • Remuneration: Morrisons has committed to treble colleague bonuses (versus 2019) for the next 12 months. M&S has promised an additional 15% bonus to all colleagues, while Tesco, the Co-op and Sainsbury’s have also committed to one-off rewards, recognizing the extraordinary contributions that have been made.

    LEARNINGS FOR ORGANIZATIONS

    • Front-line colleagues are standing taller. However, the economic reality is that they are the least well paid in their own organisations. Grocery leaders are recognizing the moral implications and facing up to this. If the disparity is addressed, even by one player, this will have the single most fundamental impact on the industry in generations.

This crisis has also established that deeper community and stakeholder engagement can mobilize an organization to do extraordinary things. What are you doing next?

AUTHORS

  • FRANCESCA BAILEY is a member of Russell Reynolds Associates’ Board and CEO Advisory Partners. She is based in London.
  • BEN BRINDLEY is a member of Russell Reynolds Associates’ Consumer sector research team. He is based in London.
  • GREG HODGE is the Global Knowledge Leader for Russell Reynolds Associates’ Consumer sector. He is based in London.
  • KATE WALSH is a member of Russell Reynolds Associates’ Consumer sector and leads the UK Retail practice. She is based in London.
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UK Retail: The Silver Linings Playbook