Tesco is focused on technology, teams and talent, Clarke tells IGD

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Clarke: technology, teams and talent are key

Clarke: technology, teams and talent are key

Philip Clarke, CEO at Tesco, said breakthroughs at the supermarket were dependent on three ‘Ts’:  technology, teams and talent. 

“Create new technology, uncork talent, mix in a strong team and you have a powerful recipe for change,” he told delegates at the 2011 IGD Convention.

Clarke said breakthrough was a word most people associated with science or medicine but highlighted the breakthroughs the sector has made including refrigeration, bar codes and milk cartons. Tesco has also contributed, he said, with Club Card, a customer focus, new formats, ranges and services.

“We have helped shape the landscape of retailing by breaking through into what were no go zones for supermarkets,” he said.

Clarke said Tesco was strong in technology, teams and talent and said plans to refresh its strategy, announced earlier this year, were sensible, careful and thought out. 

“Our world will always revolve around the customer – the customer’s wish for value, range, service, quality. We must deliver on these things or our businesses will fail,” he said.

Clarke said Tesco needed to respond to the challenge of ‘new retailing’, including globalisation and the digital revolution.

“We must show we are on the consumers’ side and have to make their lives that bit easier, that bit better,” he said.

That means embracing new technology, said Clarke. Shoppers no longer distinguish between online and in-store, he said. Clarke highlighted Tesco’s online development; which now includes click and collect, where people order online and pick up in store; plus its virtual store in a subway in Seoul, South Korea. It displays 500 popular products, which customers can scan on an app. Orders placed before 1pm are delivered that same evening.

“That’s the kind of breakthrough that really transforms people’s lives,” he said.

In terms of team and talent, Clarke said he had set a goal of building a team to create more value and Tesco needed more leaders to run business and support functions in the group.

Clarke said the sector is facing one of the toughest trading conditions this country has seen for decades but it’s in a storm, not calm waters, when a crew is really challenged.

In the UK in the last month Tesco has made the biggest changes to its pricing and promotional strategy in years, said Clarke. It has invested £500m in reducing pricing and is committed to doing what it can to help shoppers by cutting prices on things people buy most often and where it will make the most impact.

Clarke revealed staff worked a total of 90,000 hours changing price labels on shelves. 

Communication is also key, he said.
“You can’t simply send out missives from head office,” he said. “Orders from anonymous managers on high kill strong teams.”

Clarke said Tesco also wanted teams to take risk. “By trying nothing new, you stay as you are,” he said. Innovation may mean making mistakes but you learn from mistakes, said Clarke; who claimed Tesco’s focus on teams will ‘turbo charge’ its efforts.

Clarke stressed Tesco was a people business and it has adopted three key principles: 

  • not thinking in silos
  • rewarding talent 
  • nurturing talent

He revealed 80% of management roles are filled internally while it always identifies two successors against every top 500 jobs in the company.

Clarke told delegates Tesco has 420 graduates starting on its UK programme this year and 600 in Asia. It has invested £30m in a zero carbon training academy in South Korea, which will train 24,000 people in the first year.

Clarke said he spent time talking to his teams because when tough times hit it’s even more important to have motivated teams. 

“I care about building our team because Tesco gave me a chance to get up and get on in life.

“It is proof that supermarkets are not just an example of business breakthroughs but social breakthroughs,” he said. 

Breakthroughs rely on teams, talent and technology, Clarke concluded.

“Embrace technology, build the team, foster talent but never forget the basics. Never stop talking to people, make them own their responsibilities and encourage them to take risks. Nurture talent, train and reward. That’s how you make breakthroughs and will do so in future.”