This book by the recently retired chief executive of Tesco is worth reviewing simply because he is among the most successful leaders of his generation.
As Terry Leahy tells us early on, Tesco was struggling to compete with more successful retailers such as Marks & Spencer
when he joined the company’s board.
Now it is the third biggest retailer in the world and, despite recent hiccups, by far the most successful UK retail business of the last 15 years. The book is about his view of management, as expressed in the 10 words that constitute the chapter titles.
Leahy recounts many examples of his experience to make his point but, while generally interesting, they are mainly about the business rather than personal challenges that he experienced within Tesco’s unique culture.
His few descriptions of the attitudes that he faced when trying to introduce change – the insults and contempt for his ideas shown by a bullying top management team – made me want to hear more about what had happened and how he’d dealt with it instead.
Despite Leahy’s justified claim to have been part of Tesco’s success, this book is not simply an ego trip for him, however. He is clearly a modest man who is almost surprised by his own extraordinary achievements.
As a result, Leahy makes it clear that he is not writing a biography and, almost apologetically, provides a thumbnail sketch of his life in the introduction. In it, he tells us how he was initially rejected by Tesco and only got the job after its first choice turned it down – although he has certainly made up for that situation since.
As to the 10 ten words that make up his book’s chapter headings, they are truth (which he later suggests is number one on his list); loyalty; courage; values; act; balance; simple; lean; compete and trust.
Because there is not space to comment on each chapter individually, I will refer to a few highlights to give a feel for his approach and the issues that he raises:
Truth – Leahy’s view is that organisations tend not to confront the truth, but continue with strategies that are clearly not working. This led me to think of Tesco’s US venture which although, Leahy claims, can still succeed, is regarded by many analysts as mistake that should have been divested years ago.
After reading his justification in a later chapter, I concluded that failure by the firm to confront the truth and cut its losses was precisely the issue.
Loyalty – Leahy believes that the retailer’s introduction of a loyalty card scheme in the mid-1990s was the single biggest factor in its success because it both provided valuable information and promoted and rewarded customer loyalty.
While he also talks about employee loyalty, his obsession is with customer loyalty, which he sees as key to successful retailing.
Balance – He mentions the concept of the balanced scorecard as the driving force behind the ‘Tesco steering wheel’, which became the basis of the firm’s strategic planning and performance management activities.
Compete – Leahy is a great believer in free market economies and the positive benefits of competition, rejecting criticism that the retailer puts small firms out of business. Instead he claims to be keen to learn from competitors.
For instance, the move into convenience stores was driven by the knowledge that well-run small stores were still thriving, despite competition from the big supermarkets. Leahy also stresses the importance of assessing potential new rivals.
His forecast that Amazon was likely to develop its business outside of the book market was a big factor in Tesco’s pushing its online sales function, for example.
Trust – His view is that good leaders require trust to operate, but must also show it to their teams. He is fond of quoting military heroes – Field Marshals Slim and Montgomery from the Second World War are among his favourite – and clearly sees leadership skills as transferrable from one organisational context to another – although I am not entirely convinced.
This book is worth reading, although it is not as entertaining as it might have been if it were a more conventional biography. The structure comprising the 10 words and chapters works well even if you do end up moving from one time period to another, which can sometimes make the narrative difficult to follow.
But more than anything, it is useful to learn from someone who is so far among the top business leaders this century.
- Our reviewer this time was Alan Warner, a founding partner at management training company, MTP Plc.
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