There have been a number of stories over the past 24 hours about how two former Tesco CEOs - Sir Terry Leahy and Philip Clarke - are sniping at each other, casting blame for the retailer's recent failures and crisis.
The BBC writes, for example, that Leahy, who presided over the company for 14 years of sales and profits growth, says that Tesco lost its reputation for low prices, which "eroded" the trust of its customers. ""Tesco is the biggest, people expect it to have the best prices and know they can trust Tesco to deliver that and not have to shop around and check that they're getting the best deal," he says, placing the blame firmly on Clarke.
""In the end that's a failure of leadership, not a failure of the business, not a failure of the people who work hard every day in the business," he says. "When you're the CEO, if it goes well, you get credit, if it doesn't go well, you must take responsibility and Phil Clarke has taken that responsibility and paid the price with his job."
There has been some criticism of a corrosive culture that permeated Tesco, and Leahy blames Clarke for that as well: ""I think the culture did change under Phil Clarke and not for the better ... I think if you talked to people who knew Tesco, worked in Tesco when I was there, actually the culture was pretty positive and it has to be because it employs half a million people and you can't make them do things, you have to motivate them to do things, they've got to want to do it."
Clarke, who has kept a low profile since leaving Tesco, responds that changes made at Tesco when he took over the CEO role were necessary because of issues " "that had been building for some time," and all of the strategies embraced had the full backing of the board.
"Although the company had enjoyed unprecedented success in the past, it was plainly the case when I took over Tesco in March 2011 that it faced a number of critical challenges which had been building for some time," he says. "It was recognised that this involved achieving cultural changes as well as business ones in order to move the business forward."
The stories have been prompted by a television documentary that also found that Tesco demanded a million-pound payment from L’Oreal as part of a supplier agreement; L’Oreal threatened legal action if that demand was not withdrawn.
The BBC writes, for example, that Leahy, who presided over the company for 14 years of sales and profits growth, says that Tesco lost its reputation for low prices, which "eroded" the trust of its customers. ""Tesco is the biggest, people expect it to have the best prices and know they can trust Tesco to deliver that and not have to shop around and check that they're getting the best deal," he says, placing the blame firmly on Clarke.
""In the end that's a failure of leadership, not a failure of the business, not a failure of the people who work hard every day in the business," he says. "When you're the CEO, if it goes well, you get credit, if it doesn't go well, you must take responsibility and Phil Clarke has taken that responsibility and paid the price with his job."
There has been some criticism of a corrosive culture that permeated Tesco, and Leahy blames Clarke for that as well: ""I think the culture did change under Phil Clarke and not for the better ... I think if you talked to people who knew Tesco, worked in Tesco when I was there, actually the culture was pretty positive and it has to be because it employs half a million people and you can't make them do things, you have to motivate them to do things, they've got to want to do it."
Clarke, who has kept a low profile since leaving Tesco, responds that changes made at Tesco when he took over the CEO role were necessary because of issues " "that had been building for some time," and all of the strategies embraced had the full backing of the board.
"Although the company had enjoyed unprecedented success in the past, it was plainly the case when I took over Tesco in March 2011 that it faced a number of critical challenges which had been building for some time," he says. "It was recognised that this involved achieving cultural changes as well as business ones in order to move the business forward."
The stories have been prompted by a television documentary that also found that Tesco demanded a million-pound payment from L’Oreal as part of a supplier agreement; L’Oreal threatened legal action if that demand was not withdrawn.
- KC's View:
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To me, it seems patently absurd to suggest that Clarke, who was CEO for three years, is completely responsible for problems at a company where his predecessor was in charge for 14. Not that Clarke is blameless, but it strikes me as fair to suggest that there is plenty of blame to go around.
After all, it was Leahy who decided to go to the US with the Fresh & Easy experiment, which quickly became the Fresh & Easy debacle. Financial pressures on the company were at least in part created by the losses being generated by Fresh & Easy ... Clarke's biggest mistake may have been not cutting off that particular limb within 24 hours of taking over. (He should've done what Brian Cornell did so decisively with Target Canada.)
I also think that Clarke makes a legitimate point when he says that the board supported his strategic and tactical moves (until, of course, it couldn't and didn't anymore). Again, this isn't an excuse ... but it is a reality. Plenty of blame to go around.
Here's another reality. Twenty-first century retailing is incredibly difficult and amazingly challenging - there is so much competition, so many moving parts, that it isn't hard to screw up. That's what happened at Tesco. Trying to assign blame to the other guy is entirely self-serving, and - except for the fact that it gives me something to write about - I kind of wish they'd shut up.
