This book is by the former CEO of Tesco, Sir Terry Leahy. 

Every so often I say that a book is right up there as one of the best, and I think I have just added this one to that list. Our chairman, Alwin, actually read the book cover to cover twice, before I even had the chance to read it, and I can see why. The book was actually written more than 10 years ago, but aside from the odd reference to an event or year, you would not know it. It is an excellent read. 

Leahy breaks down management into 10 key words and then goes on to provide examples and learnings for each word, both in Tesco and in the wider business community. Whilst Tesco is naturally mentioned a lot, it is not a book purely about Tesco, and the learnings can be used in each and every business out there. 

The words are as follows and for each word, I’ve added one or two of his thoughts, but this is just scratching the surface, as the book contains much more. 

Truth

Leahy says that ‘organisations are terrible at confronting the truth. It is so much easier to define your version of reality, and judge success and failure according to that. But my experience is that truth is crucial both to create and to sustain success.’ The chapter covers how Leahy felt early on is his senior career when he became Tesco’s first marketing director that if Tesco listened to its customers, it would provide a route map to success. He commissioned the biggest piece of consumer research in the history of the business in order to find out the truth, warts and all! 

Loyalty

He talks about ‘winning and retaining loyalty is the best objective any business – indeed, any organisation, can have. The search for loyalty has, at its heart, an age-old idea; you reward the behaviour you seek from others.’ Loyal customers spend more, and they do a company’s marketing themselves. Loyalty is not just about customers, it is also about employees. To achieve the insight into customer behaviour required to answer searching questions, you need a system to identify and reward loyalty – in Tesco this was Clubcard, and the story of how this came into existence is covered in detail. 

Courage

Good strategies need to be bold and daring’. People need to be stretched as they can do more than they think. Goals have to cause excitement, and perhaps just a little fear. Above all, they need to inspire, and present an organisation with a choice; have these great ambitions, or remain as you are.’ For Leahy this was about bold steps into overseas territories and expanding the non-food side to include banking and financial services. 

Values

Strong values underpin successful businesses. They give managers a sheet anchor, something that holds their position and keeps them from being smashed against the rocks when caught in a storm. Values govern how a business behaves, what it sees as important, what it does when faced with a problem.’ Tesco sought to codify its values by asking thousands of their staff what Tesco stood for and what would you like it stand for, and the staff fashioned and tinkered with all the suggestions in order to come up with two core values; ‘No one tries harder for customers’ and ‘Treat people how we like to be treated’. Creating the values is one thing, but living them is harder, and to do this Terry went on the road to conduct hundreds of face-to-face ‘town hall meetings’ (NB although I have to say I don’t like those words myself, but I dislike ‘fireside chat’ even more!!)  

Act

Intention is never enough. Plans mean nothing if they are not effectively enacted.’ Decisions have to be made formally, openly and transparently, not out of the corner of the mouth or via a coded email. Any decision also needs to be communicated round an organisation consistently. A decision should be written down into what sequence of events and actions are required to turn it into reality, ie the process. This can be seen as boring or obvious, but is very important. The story of Tesco.com is covered in this chapter. 

Balance

‘A balanced organisation is one in which everyone moves forward together, steered in the right direction, without being overrun by the juggernaut of bureaucracy.’ Leahy says that the word ‘bureaucratic’ is one of the worst insults you can throw at someone – you’re slow, unresponsive, wedded to rules and regulations. He talks about the Tesco Steering Wheel. The wheel was broken down into four parts: Customer, Operations, People and Finance (and later Community) and they were underpinned by several commitments, reflecting what their staff, customers and shareholders wanted them to do better. There would be a target for each of these set for 12 months, and would be measures as either green or red. This tool became the only way they managed the stores, and each store had its own steering wheel, tailored by local management to reflect local needs and culture. 

Simple

Change in any fast-moving, fast-growing company is not easy. My solution is quite simple: to make things simple. Simplicity is the knife that cuts through the tangled spaghetti of life’s problems.’ The aim was for everything to be ‘Better, Simpler, Cheaper’ and he used a simple test to see if what people were being asked to do was indeed simple; this was the ABC Test which stood for Achievable, brings Benefits and is Clear. This covered all manner of things from the way the stores were built to the storage of water bottles to barcodes and prices on reduced items being together. 

Lean

Sustainable consumption depends on desiring goods and services that use fewer natural resources. By thinking lean, we can go green – and do more, for less.’ This involves bringing lean practices into all aspects of the business and indeed with its suppliers and customers.  

Compete

Competitors – and the act of competition itself – are great teachers. Don’t wait for your competitors to come over the horizon. Seek them out.’ Some of the best ideas Tesco have used have come from what their competitors do (or don’t) whether at home or overseas. This includes the rise of Aldi and Lidl and covers the time when Walmart entered their market with their acquisition of Asda.  

Trust

Trust is the bedrock of leadership. When people trust you, they feel that their interests are safe in your hands, and they have confidence in your vision, ability, judgement, drive and determination to see things through.’ This covers trust at many different levels; the trust in leadership, the trust passed to the front line to encourage control and responsibility. He also brings into this the key traits of being respectful and equality.  Tesco developed a management program lasting two years and toolkit for all their 10,000 managers, in what Leahy thought at the time was probably the largest and most intense management training exercise ever undertaken in the UK. 

Really enjoyed this book and I would say a must to be added to your reading list for 2024.