Lessons from Tesco: Strategy is Everyone's Job

Last Updated Sep 4, 2008 4:07 PM EDT

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It's usually the recipient of media bashing, so it's refreshing to see Tesco's name attached to praise for a change. Robert Kaplan, posting on his return from the 2008 European Balanced Scorecard Summit, singles out Sir Terry and his team for praise.
The challenge for Tesco: how to deliver a consistent, high quality buying experience when you have 400,000 employees in retail outlets all around the world. How do you ensure every store manager and their teams are as intent upon providing customers with the best possibler shopping experience?

Widen it out, too, and you've got a question applicable to any business with distributed teams, whatever its size or industry sector -- how do you keep dispersed teams engaged and acting to further the business's strategy?

The solution: Using an article on the Balanced Score Card by Kaplan and David Norton as a guide, in 1992 Tesco clarified its mission, values and strategy to employees by adapting the four focal points of the BSC and putting them into a "steering wheel" -- a symbolic and visual tool.
The wheel has five segments, four representing the Balanced Score Card's quadrants: financials, customers, operations, employee performance. The fifth, more recently added, is community.

Tesco uses the wheel to give each of its outlets monthly feedback on their performance in each of the quadrants. It also uses a 'shopping list' to present the strategic goals to employees in a concise format they can apply to their day-to-day work. That way, Tesco's teams can make a direct connection between what they do and how it impacts the business.

It still takes a lot of work to keep up with changing consumer tastes and expectations. But the concept means that employees are not just informed as to the company's specific strategic objectives, they make them happen.

Kaplan notes this is turning Tesco into "an engine of social mobility", where employees from any background or education can advance. The numbers support his claim -- its sheer size means that in 2007, Tesco promoted over 11,000 people from within -- appointing 8,000 departmental heads alone. (Sir Terry himself rose through the ranks this way, joining Tesco as a marketing executive.)

Since the shops are distributed, so is the leadership. "Tesco doesn't want one leader," says Leahy. "We want thousands of leaders who take [the] initiative to execute strategy."

Ideas to steal:

  • Add to the Balanced Scorecard's priority areas to reflect your organisation's core aims and values.
  • Simplify strategic aims by creating a visual summary and a shopping list of daily strategic to-do's. Make them applicable to people's everyday work.
  • Trust your people to understand and carry out the company's core aims. Let them take the initiative and see their contributions in action.
  • Promote from within -- then you have a deep understanding of strategy throughout the organisation.
  • Keep checking strategic aims against customer needs and preferences.
(Photo by Bruce Turner, CC2.0)