TESCO In this case study we look at some of the key factors behind the rise of Tesco to become Britains

most successful food retailer. It was not just a question of building bigger and better stores and inviting in the customers; the store culture and management attitudes had to be reviewed and enhanced, and customer service given a higher priority. More recently, there has been a company-wide initiative, involving all departments. The year things really began to happen was 1987, when Coca-Cola initiated research into the performance of a number of retailers. The research was carried out by Verax. When Verax had finished, we proposed to Coca-Cola that it would be to everybodys advantage - including CocaColas - if they made their retail customers aware of the findings. Coincidentally, Tesco was starting its own initiative to make their store managers more professional. As a result of Coca-Cola making its results available to Tesco, Verax was asked by Tesco to see if we could help to measure how their store managers compared with managers from other retailers. A pilot programme revealed that the stores and store managers were performing at a lower level than their competitors; the store managers performance, for example, was 75 per cent below that of other retail managers. Between them, Tesco and Verax designed a development programme for all store managers and departmental managers in the stores. Included in the programme was a measure of their performance and the stores performance. The measure covered five areas: managers attitudes; managers management skills; retailspecific skills, including customer service; the rewards system used (e.g. praise and recognition or pay/bonus); and the store culture. A major project was the Store Management Development Programme. This had two levels MDP (Management Development Programme) and SMDP (Senior Management Development Programme) and was carried out to evaluate and change behaviour. Over a four-year period Tesco moved from being in the bottom 25 per cent of store manager performance to being better on average than 60 per cent of retail managers.

Next phase When the Store Management Development Project had achieved the results that Tesco management originally intended to achieve, the company initiated a new, broader-based culture measure, assisted by Verax. This was to help implement the new professional and customer service oriented culture throughout Tesco. Christine Cross, a Tesco trading director who has been heavily involved in its implementation, takes up the story: The first Tesco initiatives were about recognising the need to change and ensuring change happened within a relatively quick timescale. The culture survey gave an objective measure of where we were and where we wanted to be; that is, a focus to enhance what is essentially a continuous change programme. She adds: We have moved on from need-driven change. The new glue that holds the organisation and its objectives together is a set of values which management and staff have developed." As part of the change programme, Verax carried out a survey of 1,200 staff, of all grades, from in-store trading managers and distribution managers to the main board, to evaluate their views and help us see where further improvements could be made. Since then, a total of 3,500 staff have been surveyed. After the initial survey we refined things further by producing a report on where Tesco was with service culture. This report was based on a survey involving several departments and some main board members and focused on what their vision, or target, was for the company. Importance of measuring Christine Cross emphasises the importance of asking questions and measuring: It is important to set up the programme as a continuous monitoring process. This approach has allowed us to track movement and close the gap between our ideal and our current position. Being able to see that the gap is narrowing is highly motivating.

Other key benefits of the programmes include: Helping staff give a better service to the business; more interchange between departments as people make better use of their individual skills and either help other departments or move to where their skills are best optimised; and helping staff to realise what other skills they have. Conclusion The cultural change and measurement programme has swept throughout the organisation and helped to move Tesco into the number one slot among supermarket chains. The perception by some staff of the programme has changed. Initially some people saw it as a slightly odd nice thing to have, but now it is generally realised that it is a management tool and will drive changes in working style. It is important to stress that the changes have not started in isolation. All the initiatives in Tesco revolve around the values and the new way of doing things and top management have been involved in the process, says Christine Cross. There has been a complete turnaround to become number one in the market, she adds. The values we have instilled in the company since 1993, and which came from staff and management themselves, have been instrumental in this success. Continuous improvement and customer service are key parts of these values; the values wont change but they are flexible and represent a good ideal to pursue. In summary, it can be said that measuring and diagnosis on its own will not produce effective organisational change. Change needs resources, time and effort. On the other hand, good diagnostics will ensure that the effort and resources are channeled with pinpoint accuracy and so increase the likelihood of success. After all, you cannot manage what you dont measure.