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In the current business environment, competition is a common variable in the market and, hence, there is a need to ensure that an organization has a clear performance policy that it utilizes in setting, evaluating and attaining the required goals. A clear way of managing an organization’s performance is useful in ensuring that the concerned organization has the needed performance date that helps in the formation of the relevant strategies that best serve the interests of the organization (Marr, 2010). In the same line of thought, below is an analysis of the Tesco on how it manages, measures and maximizes the performance with the goal of identifying the crucial lessons that can be utilized in another company in the line of attaining a similar high level of performance.
Tesco’s Managerial Culture
After Sir Terry Leahy had taken over the leadership in Tesco, there was an intentional change in the company’s strategy regarding how performance is being measured and managed. The most conspicuous change was the use of customer data as the main factor in the decision-making process and ensuring that everyone in the company is actively involved in the improvement of the company’s performance. With the Tesco’s operations being spread across 14 countries and accounting for 4331 stores, there was the need to have a single action plan that all the stores have to follow (Marr, 2009). Sir Terry Leahy brought about the use of ‘Tesco’s Corporate Steering Wheel’, which provides a common direction to all the employees in different countries and stores. This was also a tool that empowered all of the employees by informing them on what is expected of them, while serving the customers. Tesco also has a very inclusive leadership under Leahy upon which all the views of the employees are heard and the corresponding point of action is taken (Marr, 2009). Tesco’s good performance has also been as a result of a unique culture when it comes to strategizing; Leahy did away the strategy department and bestowed the responsibility to all the employees in the company (Marr, 2009). This was an approach that was necessitated by the fact that Leahy wanted a new culture, where many leaders were involved in strategic-based undertakings, paving the way for more information and insights.
At the heart of the good performance in Tesco was the company realization of the special role that customers play in any performance. Thus, the leadership utilized the approach, where customers’ feedback plays a crucial role in dictating the changes enacted in the company. To ensure that the company makes the most out of the availed information, Tesco contracted Dunnhumby - a data analysis company which it later bought a 53% stake (Marr, 2009). The aim was to ensure that the collected information was presented in an actionable data that the company could use it to make the necessary decisions and actions. Moreover, there was an intentional decision for the company not to concentrate on all of the available information but only focus on the information that can help in improving the company’s performance.
Tesco’s good performance is a result of ensuring that all actions are influenced by the customers’ demands, are empowered by the analysis of the collected data and are centered on the need to ensure that there is a constant improvement in the company’s operations. Moreover, Tesco’s deliberate action of ensuring that all the employees are involved in strategizing and improving the performance of the company is a phenomenon that aids in enhancing the element of collective responsibility and teamwork, which are vital for the performance of any company.
Application of Tesco’s Lessons in All-Shelved Stores Retail Company
All-shelved Stores Company is a company that has been characterized by high performance when its founder was at the helm. However, when the first generation family members took over, the company has experienced massive losses that were accompanied with high employee turnovers. Tesco model of managing the performance provides helpful lessons that can help change All-shelved Stores Company’s fortunes. One of the Tesco’s key lessons that can be useful regards the inclusive and participative leadership (Marr, 2009); it is a phenomenon that is completely lacking at All-shelved Stores Company, where the current leader - the heir of the founder runs the company with an iron fist. This has led to a lot of employees being frustrated by the fact that their opinions are never incorporated into any decisions taken by the leader. In the context of Tesco, the leadership is keen on ensuring that all of the employees are heavily involved in improving the company’s performance - a phenomenon that has led to huge gains by the company, with the company now being rated as the second retailer based on profits (Marr, 2009). The almost dictatorial leadership at All-shelved Stores Company is the primary reason why the company continues to face high employees’ turnovers.
Another lesson that can help All-shelved Stores Company to improve its performance is by emulating Tesco’s approach of being selective but effective, whereby the aim is not to stoke everything but only what is important to the customers in terms of their needs and trends. The current leadership at the All-shelved Stores Company still continues to follow the founder’s model of stoking, where the intention was to ensure that the retail have what was perceived as important to the customers under retail, mainly the food and drinks. What this approach has done is that it has led to All-shelved Stores Company losing their customers, since it is not availing its product in a customer-centered manner, but rather on a perception of what customers want. Moreover, Tesco has a clear and detailed path towards the attainment of the set goals that is dictated by the ‘Tesco’s Corporate Steering Wheel’ (Marr, 2009). On the contrary, in All-shelved Stores Company, the leadership profoundly defines the strategy, and the approach to be followed. This approach continues to be limited concerning its scope due to the alienation of the employees’ input a variable that has proven to be important in the Tesco’s context. A clear path regarding existing expectations from the employees not only improves the employees’ motivation, but also makes it easier for them to identify their needed input (Waal, 2013). Tesco’s utilization of customers’ feedback through the loyalty program dubbed “Clubcard”, where, contrary to the common norm of issuing discounts, Tesco loyalty program aimed at empowering the customers into availing the necessary information that can be utilized to serve them better is another vital lesson worth learning.
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There is the need by All-shelved Stores Company to come up with a policy that is going to avail the non-prejudiced customers’ demands feedback that will help in strategically stoking the company. Success comes as a result of meeting the customers’ demands in the most efficient manner (Waal, 2013), and, thus, the use of customers’ feedback in shaping the nature of decisions made will help the All-shelved Stores Company to get back to old successive days of good profit making. Tesco’s operations are centered on the need to ensure that the treatment given by the employees to their customers is reflective of the customers’ expectations and serves in a customer oriented manner (Marr, 2009). This is a phenomenon that can only be availed by the highly empowered and motivated employees. This a lesson that All-shelved Stores Company need to embrace and make sure that there are strategies aimed at training the employees and coming up with a good performance-reward system that will make sure the employees are motivated and also caution the company from high turnovers.
It is evident that teamwork plays a crucial role in upholding the good performance within a company. Moreover, it is clear that there is the need to empower the employees through training in the line of ensuring that they are better placed to serve the customers. It is also apparent that the primary lesson from Tesco for All-shelved Stores Company is on the need to use participative leadership, where there is a healthy consultation between the leaders and their junior employees. Over and above, if All-shelved Stores Company wants to get back to profit making, it is evident from the Tesco’s experience that customers’ feedback need to be analyzed and adhered to when making the decisions on how to stock and serve them.