Former Vice President, Fresh, Frozen & Chilled at Asda and former Buying Director, Iceland Foods
Karl has spent the majority of his career in food retailing, joining Sainsbury’s after graduating in the mid 1980s to work in the trading department. He joined Iceland in 1992 to eventually become trading director, responsible for all buying, with a position on the board of the company. After 5 years in senior commercial positions at UK facilities management business Sodexo, in 2010 Karl joined Asda, the UK’s second largest food retailer, to run the food trading team. At Asda he was responsible for fresh food, chilled food and frozen, categories with combined revenue of ~GBP 8bn and gross profit of ~GBP 3bn. Since leaving Asda Karl has taken on a range of consultancy roles, including a year working for Sainsbury’s Netto discounter concept, where he gained deep insight into the discounter retail format. Read moreView Profile Page
What happens when you move from managing things and people, into leading people?
That’s a tough question and I’ll try and use a couple of analogies or metaphors, to describe the change that I went through and how I came to terms with behaving and operating in a different way. The first one is a simple statement – leaders do right things; managers do things right. With leadership, you are looking at issues, such as vision, direction, overall positioning. Whereas management is more about the techniques and the processes, to get you from A to B. I think, probably, well described by Covey, when he talks about vision, in the context of a jungle, and fighting and battling your way through a jungle.
The managers are putting on machete-wielding training programs, to increase bulk and muscle, so that the machete wielders can hack their way through more undergrowth, every day. There are eating programs going on, to make sure we don’t get tired. There are sleeping programs, there are tents being erected. But the leader gets in a helicopter, gets up to the top of the forest, comes back down and says, hey guys, we’re in the bloody wrong forest.
Another simple analogy is, you’ve got a ladder and you put it up against a wall. A manager’s job, as I see it, is to make sure we get up the rungs of the ladder in the most efficient, most effective way we possibly can. The leader’s job is to make sure that the ladder is up against the right wall, in the first place. That’s the best couple of ways I can articulate the difference.
Leadership is about vision and direction. Management is about oiling the wheels, developing systems and processes, to enable us to get in the direction that the leader or visionary, has created.
What did it mean for you, to move into a position, in your first experience?
Uncomfortable, for a long time. I would argue that you never make the full transition. The reason you got promoted is because you’re very, very good at doing the management job. In my sphere, of buying ranges, I was very good at spotting opportunities to sell a six pack, rather than a four pack, or set the price at 90p and not 80p, or deal with X supplier and not Y supplier. I’d learned those skills. That’s what got me promoted. The majority of time, that’s what gets people promoted.
The ability to spot talent, who can operate at the next level, is a key leadership criterion. Interestingly, when I was being interviewed and then got offered a role at Sainsbury’s, in 2005, the head hunter, said to me, I think you’ve got more credentials to be a CEO, than you have a commercial director, because you think differently. I’m not trying to blow smoke up my own backside here, but that was a bit of a moment of realization for me.
Different people spot different characteristics, abilities, strengths, weaknesses, as you move forward. It’s a learning process, and there is still the desire, within anybody that’s come through a certain organization and been promoted, internally, to dive back into the detail and to think, I can do that job better that they can do it. But resisting that temptation and helping somebody develop and learn their own style, is a key leadership criterion.
I once went to a presentation that Allan Leighton gave and he described it as, hold tight, let go. Ensure that the organization and the people are managing the business, on a day to day basis. Have an understanding that you can do that job and did that job and you can hold really, really tight to the reins. But at the same time, you let go and allow them to do what they need to do. Just ask them the odd question, here and there. How’s it going? You walk up to the vegetable buyer’s desk – what’s happened to the price of peas this month? I believe it’s the September chip contract time; what’s happening to the price of chips? Without making them feel as if you are trying to do their job for them, you give them the confidence that you are around and in the business.
The desire to get your hands on the day job, particularly when it’s not going quite as well as it needs to, is a real challenge. I might use a few metaphors during this conversation. There’s always a danger in metaphors. There’s a lot of war metaphors used about leadership and I’m completely anti-war, but I’m heavily into sport and sporting metaphors, although I know that people get turned off by sport metaphors, as well. But I often think about the leaders of football teams. I think about the characteristics of a guy called Martin O’Neill, who used to run up and down the touchline, wanting to take every penalty, every corner, save every goal, kick every ball, compared to Pep Guardiola, who sits there, even when his team is two or three nil, down, very calm, with his suit on and behaves in a very, very different way and leads in a very, very different way.
Everybody has to develop their own unique style. But I would say, that it’s about holding tight, letting go. I envisage leadership as, not out front, leading the agenda. I envisage the direction being set from behind, like a shepherd leads from behind the flock, allowing the most nimble sheep, or individuals, to move on, find their own way and bring the rest of the sheep alongside. All the time, the shepherd is at the back, setting the direction, but making sure that the outliers are being brought more into line, if they’re being particularly challenging or drifting off into very uncharted territory and, maybe, the wrong direction. All of those are thoughts and ideas, around the transition, which is a tough one.
In this specific situation of coming into a new environment, as a leader, it looks as if the inner characteristics that you relied on, were really an ability to listen, a degree of humility in the face of the unknown and an ability to actually trust your team?
Absolutely. I’ve shared some of the literature that I’ve learned, read, taught, studied, over the 30 years or so of my career, since the early nineties. One of those books was The First 90 Days. You’ve joined a new business, you’ve got a new job, you’re in a different function. What processes can you put in place, what questions do you need to ask? Are you facing a turnaround scenario? Are you facing a, we’re doing really, really well and we just need to continue, situation? What is the situation? Who are you dealing with? I literally took my team, the guys that were in the defense business already, and took them through that process. It was quite painful for some of them, because they kept saying, hang on a minute, we’re doing really well here. We’re the most profitable function in the business, we’ve got 250 million turnover, with an 8% EBIT, why are you asking us all these questions?
I said, well, firstly, maybe you’re going to learn some more and, secondly, I’m learning, because I’ve got to lead. Then, of course, we had the asbestos issue. Then we had the Buckingham Palace guardrooms issue. All of a sudden, a few pennies started to drop with those guys. It’s important to have frameworks and tools that you can quickly access and you understand and you can articulate to others, because they are the way you think; they’re a habit.
Habit, for me, is the intersection of three things. It’s the attitude – do I want to be able to learn to do this? Do I have the knowledge and do I have the skill? With anything, if you can develop those three things, then you have the habits. Habits form; bad habits form and, hopefully, good habits form. They become the process by which you assess the situation, hopefully ahead of time. It’s how you recover from it and the situation that replaces it and the processes that are in place to make sure that it doesn’t become destabilizing or the business going into complete meltdown, which is a question of risk management and judgment, which comes from habits and comes from experience.
Moving to your experience at Asda.Could you give us the context for your experiences as a leader, coming into that business?
I was, effectively, given most of the fresh food categories; a significant chunk of the food business, to run and manage. The business was under-performing. At the point, the discounters had about a five share, and were growing and were challenging the norm.
In my first few days in the business, I stumbled upon a paper that had been written by Archie Norman, in the mid-90s, called Value Retailing. It was about five or six pages. His key platform was, we are a value retailer. We are a northern value retailer, who sells basic products – we’ve got some wider ranges – and we sell things that people buy, every day. We have to price competitive on those items, because if we’re not, people will shop elsewhere. For years, Asda had the price position in the market. But clearly, the discounters had come in and were now starting to challenge that and it had got to about 5%. Remember, this was 2010.
I read this statement and the premise of his thinking was, dead simple, everyday low price, cut promotions out. Promotions create a lot of noise in the business, they create a lot of issues in the supply chain, a lot of cost gets driven in, because you’re managing peaks and troughs of volume. Suppliers are having that and they cost that in. They get left with a load of stock, because you don’t want it anymore, because customers haven’t bought into it, to the extent we thought they were going to buy into it. So EDLP is the route to go. Drive down prices, drive up volume. Drive up volume, quid pro quo, drive down costs. Drive down costs, create war chests, reinvest in service proposition number one and more price reductions. It’s a virtuous circle.
Leadership Principles: Lessons from 25 Years in Consumer Retail
April 29, 2020