Rebecca Urban of The Age continues her excellent work that started with uncovering a link between the recently dismissed Peter Scott and a supplier to Coles. Urban unveiled further information about links between a senior Coles manager and a livestock transport company in which he had a substantial interest.

Ominously for Coles, the words “ongoing series” in an accompanying note by Age Business Editor Michael Short indicated the likelihood of more to come. So it was not surprising to read that at least two executives are absent from their desks as an internal investigation kicks into gear, and leaked internal figures pointing to below budget sales and desperate initiatives including a 10c fuel discount (matched by Woolworths in a flash), being picked up by international industry media.

What we are seeing is further evidence of a company with fundamental flaws in its moral platform, ethical standards and culture. Core values including integrity, respect, teamwork, innovation and achievement seem not to matter. The key driver is the ambitions of some senior people; whether that is a desire to feather their nest, or a desire to hang on to their jobs rather than suffer the slings and arrows of a private equity buyout.

Coles has a history of related party transactions involving board members that long ago set a pattern. The revelations about senior managers’ dealings with suppliers must be seen as a product of that heritage. While some are shaking their head in disbelief, no-one should really be surprised by all this.

What’s to be done about this is another matter.

The cliché is that you can’t change a tyre on a moving car. Until earlier this year I believed the only way a company could bring about radical cultural change was when it had ground to a halt. Bunnings did it in the early 90s when it took over and reinvented the pile of ashes formerly known as McEwans. Officeworks did it within Coles Myer, but in the context of a startup. (Wisely, the pioneer Officeworks leaders rented offices away from the toxic Coles HQ).

This year we have seen an example of successful cultural change at Myer. The tyre was changed when the car slowed down, going round the corner that was the takeover and change of management. Myer was a broken company with a flawed culture, but under new CEO Bernie Brookes it is undergoing an astonishing transformation within.

Coles can change, and it must. However, it will probably not be under the leadership of Allert and Fletcher et al; and probably not under ASX listing.

Bring on the barbarians.

Peter Fray

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