On Monday, Wesfarmers chief Richard Goyder addressed the senior Coles managers, and gave them a glimpse of life in a new culture.
The Coles people were asking about Pacific Equity Partners. Goyder answered by saying that he suspected they were really asking about former supermarket chief Steven Cain. Goyder said it was early and he didn’t really know what Cain’s role would be.
With one answer, the Coles people realised that in future, the unspoken issues will be squarely on the table and questions will receive frank answers with the best information at hand. After the meeting, Goyder’s act of openly and honestly answering the unaskable question was the hot topic among those leaving the meeting. The way he handled the issue, and the contrast with the old regime, made a huge impression.
The first changes, and the most important, will focus on the workplace culture. It has already begun.
A decade ago, when Bunnings set about building their east coast hardware empire, they went back to first principles and therein lives a glimpse of how they might tackle Coles.
The leaders developed a picture of what Bunnings Warehouse would be like to shop at, work for, supply to, and have as a member of the community. They created a place where integrity, respect, achievement, teamwork and innovation were key values in all parts of the company.
These values seem like universals, but are rarely practised by Australian retailers.
The development and communication of the values was not a top down process. As each store opened and each department set up, all the team members defined their own vision and values. This built real ownership. It is hardly surprising that there are common threads running through the vision and values that each team established for their own area.
The real Bunnings difference is that values were not just hung on signs around the company, they were lived and breathed at all levels.
Bunnings understands that organisations with great cultures outperform those with inferior cultures and that happy team members perform better and deliver a better customer experience. Bunnings refused to compromise on recruiting and retaining aligned team members, recognising this as a key driver of the strategy.
They also understand that they will never get it right and that, in retail, perfection does not exist.
The first planks in the Bunnings leadership model are “challenge the status quo”, “focus on the future” and “vividly paint the picture”. Bunnings involves the team, at all levels, in designing the broad structure and meaning of the culture and found ways to give real meaning and ownership at all levels.
Coles, indeed most retailers, have a habit of centralised command and control – a bureaucracy. Wesfarmers will reduce complexity and bureaucracy and devolve decision making, pushing it closer to customers and shop floor.
While I don’t believe the politics-free company exists, Bunnings is pretty close. Back-stabbing is extremely rare. People are encouraged to take risks, and can do so unafraid. Decisions are less likely to be stuck in a committee process, with no-one risking their reputation. Coles is highly political, and pays a high price for this.
Bunnings Warehouse has grown from scratch to become a $5bn company in little more than a decade. Largely, because their early growth was faster than their ability to develop their own, they hired like-minded leaders, the cream of Oz retail, from across the industry.
The scale of Coles means that hiring in the right talent will be much more difficult. The challenge of fixing the workplace culture must be met by turning round the people already there; and that is much harder.
I am not privy to the plans, but I suspect the first step will include some exits at the top. Coles is very top-heavy with people who will not be a good cultural fit. The good thing for Bunnings is the number of great leaders who will blossom in the new culture. Many of these managers didn’t fit the Coles culture, and have been held back.
Coles people at Monday’s meeting with Goyder began to realise that things will be different, and most are feeling a touch of euphoria.
Rob Lake publishes Brandish – Retail Intelligence, a fortnightly newsletter about things retail.
DISCLOSURE: Anyone who has been paying attention will know that my company Orex has recruited hundreds of managers for Bunnings and that my wife owns a few Coles shares.