Tesco versus supplier: the #marmitegate scandal

November 17, 2016 11:55 am
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In the most recent Tesco versus supplier clash, the supermarket removed some of the most recognised household brands from their shelves. The removal of the products was the result of a dispute with Unilever after they adjusted pricing following Brexit and the falling value of sterling currency. Whether you love it or hate it, #marmitegate caused a social media frenzy amongst diehard marmite fans, causing incredulity that Tesco would dare to remove such an iconic product from their shelves.

Tesco stood their ground in the dispute and went as far as to remove numerous big name household brands including Hellmann’s Mayonnaise, Marmite, Ben and Jerry’s (see below) and several other popular products from their online grocery site.

So what damage did this cause to the supermarket giant?

We don’t yet know the cost to Tesco in terms of sales revenue, but judging by the popularity of many of the Unilever brands, the impact could be huge. Consumers took to visiting other supermarkets to get their condiment fix…

Unilever owns over 400 brands which are available across the globe. Their products range from bleach to convenience snacks, and Tesco briefly axed over 200 of their brands when they implemented a 10 per cent price hike on wholesale costs due to the current economic climate. Experts say that this could be the first in a long line of food and drink suppliers needing to adjust their pricing substantially as a result of Brexit. The pound had experienced a 17% drop in value since the result of the EU referendum.

Unilever and Tesco have now ended the dispute, with the impact on both brands yet to be identified. Unilever did have to back down on their initial 10% proposed price increase, and Tesco, ASDA and a number of other supermarkets reached an agreement. For now, the dispute is over, but experts suggest similar disputes within other sectors is highly likely during the transition out of the EU. The future for smaller suppliers needing to negotiate without Unilever’s level of brand recognition, financial clout or resources is unknown. For now, we will just have to wait and see what the future holds for Britain outside the EU.

 

Written by Ben Allen, Coriolis Ltd

References:

http://www.bbc.co.uk/news/business-37650234

http://www.independent.co.uk/news/business/comment/tesco-v-unilever-is-over-but-the-real-brexit-battles-wont-be-so-easily-settled-a7360946.html

http://news.sky.com/story/unilever-rues-brexit-currency-hit-amid-its-supply-row-with-tesco-10615193

http://www.dailymail.co.uk/femail/article-3835991/How-bargain-Tesco-s-axed-Unilever-products.html

http://www.bbc.co.uk/news/business-37609114

Project leadership: what you need to succeed

November 11, 2016 4:51 pm
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The Raconteur recently reported on the skills shortage affecting the project management industry, suggesting that this was caused by a lack of students taking up STEM subjects. STEM subjects would prepare individuals with the necessary technical knowledge, but the shortage was further exaggerated by the lack of broad leadership qualities possessed by those that do study STEM.

The Project Management Institute forecasted 57% industry growth between 2010 to 2020, reaching a total economic impact in excess of $18 trillion. For UK employment, this is great news and should result in nearly one million jobs being available to Project Managers. So with so many jobs available and considering the key skills that are required for this challenging role, how is the market gearing up to be able to find enough people who fit the bill?

It will come as no surprise to my Coriolis colleagues to hear that Raconteur believed a shift of focus towards an individual’s mind set over their toolkit was required, which of course our 3D Talent framework entirely supports.

Project management is a relatively new industry experiencing huge growth. The focus of running projects in a separate way to Business as Usual has led to a booming industry. In discovering ways in which to attract millennial talent, the industry has become more innovative, using technology to stay ahead of the curve. Four key areas Raconteur consider are:

  • Advances in information technology
  • Development of enabling concepts
  • Expansion into new fields
  • Broadening of entry routes to the profession

The first two concepts could be considered the ‘how’, the latter the ‘what’.

At Coriolis I can think of clear alignment with how our Project Managers use our I.T toolkit MiMo to advance the information we can provide and analyse for our clients using the data they already have. For enabling concepts we have aligned with the APM to ensure we stay up-to-date with the project management tools we utilise.

In terms of mindset, some of the attributes required when running a project were highlighted by Raconteur. Identification of those attributes was carried out in 2015 for individuals working in high-performing organisations and found some were particularly prevalent:

  • Actively engages sponsor – 81%
  • Organisations see the value in project management – 80%
  • There is a high alignment of projects to strategy – 57%
  • High program, project and portfolio management maturity – 35%-40%

In another article in the project management of this website there are some great infographics on the key leadership qualities for project managers which I’ve found really helpful to reflect on for my personal development:

http://raconteur.net/business/skills-needed-in-successful-project-leaders

Further to this, there is a nod to STEM which I wrote about last year and my experience as an ambassador:

http://coriolis.co.uk/were-talking-about-another-great-british-this-week-the-great-british-stem-campaign/

I hope you find these articles insightful, especially if you are considering a future in project management.

 

Written by Nicky Redfern, Coriolis Ltd

References: http://raconteur.net/business/mindset-and-not-toolset-its-all-about-people

Governance lessons: learning the hard way

November 11, 2016 4:37 pm
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How would you define governance? Sir Adrian Cadbury, the pioneer of good governance, described it simply as “the system by which companies are directed and controlled”. Years of interest from the corporate world, business schools and certainly the media have proved how organisations (and projects and programmes within them) can thrive or fail because of it. So, what are some of the factors behind the successes and not so pleasant stories?

The concept of governance evolved around 3,500 years ago from the ancient Greek word Ʀubernetes: the person giving steerage/direction to a ship. The notion that organisations need a person or small group to be competent at seeing the way ahead, controlling their slim resources effectively aligned with achieving their goals derives from this…

Compliance with structure and processes plays a fundamental part. But it’s not the be all and end all.

The failure of the Enron Corporation in 2001 signalled the largest corporate bankruptcy in the USA and raised a myriad of questions about the effectiveness of corporate governance practices. Extensive research was carried out to establish what went wrong at Enron and other institutions like Tyco and WorldCom. Many of the accepted standards for high-performing governance operations were followed; engagement with a system of regular interactions, roles and responsibilities clearly defined, documented codes of ethics, and even personal money invested by those steering the ship.

However, this covers only the processes – and there are other considerations that must be made. Something that is at the heart of the well-researched Harvard Business Review article ‘What Makes Great Boards Great’ suggests that it is not about rules and regulations, but rather the way people work together…

‘We will be fighting the wrong war if we simply tighten procedural rules for boards and ignore their more pressing need – to be strong, high-functioning work groups whose members trust and challenge one another and engage directly with senior managers on critical issues facing corporations’.

Dysfunctional behaviours

Research into failing corporate governance carried out by the Governance Forum identified four types of dysfunctional board behaviour detrimental to performance:

  • Group Think – Referring to a desire for harmony and conformity that outweighs the need to explore and critically evaluate alternative viewpoints. Decisions of course should be made through an ability for the board to work collectively, but still debate dispassionately; constructively challenging. This is often a result of poor diversity in skills, experience and knowledge.
  • Conflict – For example, a highly dominant chairperson whose decisions may not consider information and interests of other parties involved, or who may generally set a tone of distrust that results in a lack of openness and transparency.
  • Operational – Where a board or committee fail to act strategically and become ‘bogged down’ in the detail, investing time disproportionately into avenues of low return on time invested.
  • Passive – Failure to challenge decisions of the executive and not taking an active interest in development. A what will be will be attitude.

Regardless of how effective your governance framework is and what your structures and processes are; if these behaviours prevail then outcomes will be negatively influenced.

“The Fish Rots from the Head”

This Chinese proverb expresses the idea that problems can ultimately be traced back to Leadership.

In Bob Garratt’s excellent book on the topic, he remarks that, for organisations to survive and grow, their rate of learning needs to be equal to or greater than the rate of change in their environment…

This is all too true and should be reflected in good leadership and governance execution, delivering on strategic vision and engaging stakeholders. Rigorous horizon scanning for external insights to enable strategic planning, as well as listening closely to internal organisational issues can define whether the direction headed is most appropriate. Creating a culture of intelligent, informed and collaborative decision makers who are absolutely aligned on the organisation’s vision and mission is key. Ensuring transparency, individual accountability and appropriate risk management all matter when fostering a climate of trust and candor. Surely that must mitigate a recipe for disaster?

There’s still much to learn and embed in terms of good governance – but one thing we can be certain of is how wide the lens needs to be in fully exploring it.  It could in fact be concluded that the right systems and processes are key governance compliance drivers that are very much demanded as a foundation for effectiveness. However, performance drivers are then closely linked with effective behaviours and leadership.

So, how will you improve governance practices in your organisation to help steer the ship?

 

Written by Paris Clark-Roden, Coriolis Ltd

References:

Garratts, B. (2010) The Fish Rots from the Head. Profile Books.

George, K. (2015) The Governance Handbook. Governance Forum Limited.

The Financial Reporting Council (2011) Guidance on Board Effectiveness. Published March 2011.

Sonnenfeld, J. (2009) What Makes Great Boards Great. https://hbr.org/2002/09/what-makes-great-boards-great.

Vinten, G. (2002) The Corporate Governance Lessons of Enron. Emerald Publishing.