Whether Coles is fully or partially sold, things must change. The failure of the current leadership means that there will be a complete churn of the managing directors of most Coles businesses and the great many of their direct reports.

Whoever moves into these roles will need to address the same issues recently faced by Myer, and in the past decade by Bunnings. Unless culture, vision and values are addressed, no other changes will be have any meaningful outcome.

Coles is internally defeated; most believe the company cannot succeed under the current leadership. The simple fact of a change of ownership has a high potential to ease the feeling of helplessness and inability to influence outcomes. There will be a mixture of apprehension and excitement greeting the new leaders, and this will provide a useful platform for change.

Coles is a highly political environment that fosters safe decisions rather than risk taking by management. An early priority must be to have people believe that taking risks and pushing against the tide is not just allowed – it is essential.

The new leaders must listen, listen and listen. Those closest to the customers – the people in stores – are an under-utilised giant set of ears and eyes. For example; they would have told Tooronga that the conversion of Bi-Lo to Coles was likely to drive customers elsewhere.

Communication channels must be opened and decision making hastened, instead of being buried in meetings.

The new owners must paint a clear picture so that everyone in the company knows where they are going as a group. Have everyone understand the outcomes to be achieved and the role they might play in the achievement (as opposed to the tasks they might perform). Then train and develop the team so they are capable of delivering those outcomes.

Create an environment (through fairness, a sense of fun, feedback, recognition, and reward) so the team wants to be part of the journey. If work is fun, the team want to be there, they will do a good job and the customers will feel the vibe. It is axiomatic that eye contact is hard enough in most Coles businesses, and a smile is out of the question.

Allow people to take risks – and more importantly – make mistakes. They should be able to learn from their stuff-ups, not feel they have to cover them up for fear of a thrashing. Do not assume that the only good ideas come from the top down. Never second guess your team’s best efforts.

Understand that in retail, you NEVER get it right. It is always a journey, a work in progress. Perfection does not exist.

There are enough local and overseas examples of successful turnarounds of struggling retailers. It’s not hard to achieve, but they all seem to require the circuit breaker provided by new ownership and leaders.

DISCLOSURE: My wife still has her 768 Coles shares and over the last 12 years my company Orex has placed more than 500 managers into the marvellous Bunnings environment.

Peter Fray

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