Sir Terry Leahy has announced he’s leaving Tesco after 14 years in charge. During that time the business has seen turnover rise by 310% and profit rise even more. Tesco has moved from being an also-ran in the UK supermarket field to the dominant player, overtaking Sainsbury’s and Marks & Spencer in profitability.
Tesco is unusual amongst its rivals in having long standing Chief Executives. 14 years gives a person time to see their vision turned into reality, passing through painful times of change as part of a strategy that shareholders, customers and employees know is likely to be given the opportunity to make it to fruition, making them more likely to stick with it.
It’s not just Leahy who has been given the chance to succeed. Despite being formed in 1919, Tesco has only ever had five CEO’s. One was Jack Cohen, the founder, the following two were his son-in-laws, followed by Lord MacLaurin. Lord MacLaurin was plain old Ian when he took over, his remarkable achievements at Tesco gave him the profile that led to a peerage. He claims his most important decision whilst at Tesco was appointing his successor, rather than turning Tesco into the UK’s largest retailer.
During the 14 years that Sir Terry Leahy has been with Tesco, Marks & Spencer have had five Chief Executives, the same number that Tesco has had in the last century. Marks & Spencer has not enjoyed the steady good fortunes of Tesco over that period.
Whilst it may be wise to replace a Chief Executive who isn’t delivering the goods, or an Executive at any level who isn’t performing, it’s worth reflecting on whether giving people time to execute their vision and invest in selecting and mentoring a successor can produce better long term results for all stakeholders.