Tesco Values Employee Loyalty, Too

MICHAEL GARRY

NEW YORK — U.K.-based Tesco is well known for cultivating the loyalty of shoppers, but the chain tries hard to earn the loyalty of employees as well.

Terry Leahy

Take its employee training program. Tesco has established six or seven employee levels, from shelf stockers and cashiers to the chief executive officer, and training is available for anyone who desires to move up the ladder. “It's not for everybody, but everybody knows they can be trained for the next level up,” said Tesco CEO Sir Terry Leahy in a speech at the National Retail Federation's 99th Annual Convention and Expos here earlier this month.

Many of the senior people on Tesco's executive board, said Leahy, started as teenagers and worked their way up. “We take people with all sorts of academic qualifications, but once they are in the organization, it's who they are and how they contribute that matters. There's no officer class or glass ceiling.”

In addition to its internal training and leadership program, Tesco now “matches it” with the opportunity to earn external qualifications, Leahy noted. “So you can get a degree while working at Tesco.”

A company's values are also important to employees, especially younger employees, said Leahy, noting that young people will join companies that reflect their values. “Young people want to be proud of the place where they work,” he said. “They've got to feel, ‘I've got as much of a chance to contribute here, irrespective of my background.’” And they seek firms that “do worthwhile work — that help people out.”

Retailers have the ability to offer all of that, he said. “It's a great place to work, and it's changing more now than any time in my 30 years.”

At Tesco, a key management strategy, said Leahy, is to emphasize “vision, values and culture,” which he considers more important to business success than marketing strategy and tactics. To that end, the company seeks “to create benefits for customers and earn their lifetime loyalty,” he said. “It's about people coming to work to create small improvements in people's lives. That's something worthwhile that our staff wants to belong to.”

At the same time, Tesco employs a “steering wheel” that sets specific measures of performance for individuals, departments, stores, countries and the entire company. In this way, “people know what they have to do and can see how they're doing,” Leahy said. In addition, “everybody knows how they connect to the big picture” — that is, the company's broader goals relating to customers, community and finances.

Leahy also pointed out how Tesco — unlike many companies — links its people to business processes and technology in what is called the Tesco operating model. “The key is to see those three as one,” he said. “It creates the ability to execute rapidly.”

Another important management strategy at Tesco is to value simplicity over complexity. This takes the form of reducing decision-making to a fundamental consideration: “How do we make this better for customers?” said Leahy. It also applies to communications, both internal, and external to customers.