Aldi's Approach to Talent Selection and Leadership Development

Paul, in the few moments we have left. That’s been a fantastically rich picture of the mechanics of the model. I think we’ve covered a lot of ground there. To explore a dimension of this story that involves your leadership experience and your role as a leader of an organization like Aldi in the UK specifically, could you talk to us first of all in terms of the leadership culture that you grew into over the time that you were at the business? What those leadership principles really involved? Where they were centered on? Maybe I’ll get into some slightly more detailed questions of what that means in practice. For now, in terms of leadership philosophy and leadership culture, what would you say your experience was at Aldi?

I had a number of fantastic mentors. The company is just full of people with a lot of experience. I described to you the way in which management is recruited. It’s not some of the management is recruited like that. All of the management is recruited. They all join somewhere in their mid-20s. There are no people 45 years of age with a huge experience of other businesses who join Aldi. If you meet somebody who’s 50 years’ old, you can pretty much guarantee they’ve got 25 years’ experience. I had a number of mentors who had that kind of experience when I first joint. What they taught me was two things, really. In the industry that we are in, the food retail industry, what you have to do is be very clear about the vision that the company has. Now, that sounds a bit of a buzz word, but what I mean is, what are we actually trying to do? At Aldi, we were actually trying to sell very good products, benchmark to the brand leaders for much less. The way we did it was to have much lower costs. That message was explained in four or four different ways but constantly. With never a break in clarity. Number one is, you have to make it very clear what exactly are we here to do? Why are we doing everything that we’re doing? What’s the purpose? The second thing is, you have to find ways in which to turn that vision into a form of personal pride of the people that are actually doing it.

That comes in a lot of different ways. I’ll give you an example. When I first started with Aldi, our till system, our cash register system was to key in by hand the prices on a keyboard. A little bit like you would find somebody who works in an accounting office. They don’t look at the calculator. It’s all done differently these days. In those days, they don’t look at the calculator, they look at a stream of figures and they key them in on a keyboard. It’s why by the way every five has some little knob on it here, so that when you’re not looking at it, you automatically know your middle finger is on the five and the four is to the left of it and the six is on the right. We could key in prices four times faster than a scanner. Not only that, we were more accurate than a scanner, which relies on people putting the right prices on the shelf and having the right prices in an IT system. Which in the 80s and early 90s was not a foolproof system? The reason I’m explaining all of this is, hundreds of customers going through would say to our cashiers, “How do you do that? That’s incredible.” They would check them to see whether or not they were right. Then when they recognized they were right, they would say, “That’s amazing.” No matter what we paid our cashiers, there was nothing quite like the drug of people telling you: You do something I couldn’t do. Actually, it was simpler to do than the customer recognized. The pride that these people had of being told every day: That’s amazing. That was really something. That was actually my biggest fear when we changed to scanning. How would we repeat that pride factor that we were getting from the customers every day? We found other ways of doing it when we changed to a scanning system. It taught me, find ways in which you can make your staff proud. Funnily enough, through this Covid-19 situation, a similar thing has occurred through the whole industry. That I think the people serving on the frontline feel rather proud that they are somehow doing some kind of service for their customers and getting applause for it.