Wilko: Counting the costs of leadership inconsistencies
As Wilko stores disappear from high streets, Doug Baird, CEO of New Street Consulting Group considers the immense importance of stable leadership.
Wilko should be a retail success story. Since the 2008 financial crisis, a growing trend of value-conscious consumerism has changed attitudes towards discount retail. Aldi has displaced Morrisons in the supermarket ‘Big Four’, while B&M is opening new stores, with plans to grow from 665 to 950 shops in the UK.
GlobalData recently reported that the UK’s value, discount, variety stores and general merchandise retail channel will grow by 5% per year, topping £59.4billion in 2027. The market is primed for retailers offering value-led products and Wilko should have been riding this wave, rather than collapsing into administration.
Undoubtedly, rising supply chain costs, rates and rents, intense competition and shifts to online shopping put high street retailers under intense pressure. And, although these are factors, along with other challenges such as location of stores, have contributed to the demise of Wilko, they were made worse by a lack of consistency in leadership.
The influence of stable leadership
During Wilko’s struggles in the past two-to-three years, the business had two different CEOs and two different CFOs. Last year also saw the retailer’s managing director leave, while earlier this year the company’s chair stepped aside, and its HR director left. There were also reports that the retailer was making changes to its management structure at both its stores and head office.
It’s almost inevitable that an under-performing business will experience changes in senior personnel. People will opt to leave, and leadership teams may feel that bringing in fresh expertise and experience is a crucial part of a turnaround strategy. However, such changes can be effectively managed to quell churn and establish a level of much needed leadership consistency.
Stable leadership can deliver many benefits, and particularly in tough times. It can prove pivotal to relationships with internal and external stakeholders. For example, established relationships can promote understanding among suppliers and support levels of confidence. This may be favourable for managing terms and conditions and protecting a vital supply of goods and services. Wilko experienced several supply issues which led to empty shelves.
Looking internally, leadership consistency can create confidence among other staff, helping to allay concerns and thoughts about jumping ship. Stability at the top can quickly ripple-effect throughout an organisation, and during a challenging time, it can unite people and encourage them to pull in the same direction.
Perhaps, most importantly, stable leadership is critical to properly getting to the root of any performance problems. Although challenges can often appear obvious, there will be many nuances that can significantly impact the chances of survival and recovery. It can take time to get to the bottom of issues to formulate effective plans and accelerate transformation. Consistent leadership is vital to this and the resulting implementation and evolution of turnaround plans.
Creating consistency – putting problems in perspective
An in-depth analysis of performance issues is a great starting point for creating leadership consistency. By fully understanding what isn’t working and why, organisations can start to scenario plan for what happens next. Full consideration can be given to any gaps, whether that’s skills, experience or aptitude, and possible solutions for addressing problems. Decisive and more immediate changes in leadership can then be made, which are more likely to minimise the fallout of other near-term personnel changes that fuel inconsistency and erode senior levels of stability.
Collaboration is important for properly tackling and addressing performance issues. Sharing responsibility amongst leadership will lead to some friction that’s required to stop taking a superficial view of issues. In some instances where businesses are facing failure, problems will have been supressed, meaning strategies for remediation have been overlooked.
Approaching problems as a collective will encourage debate and surface possible solutions that may otherwise be missed. It can also create honest conversations about the future and a natural environment for leaders and managers to self-assess their positions. They are then more likely to make their own decisions early on about whether it’s beneficial to themselves and the organisation for them to continue as they are. This can prompt a call for support, identify other hidden challenges or minimise further changes in personnel further down the line, when leadership consistency is even more critical to delivering a turnaround.
Taking an interim-led approach to addressing performance issues or a turnaround situation can be an effective means of creating leadership stability. Interim managers specialise in short-to-medium-term roles and are experienced in developing and implementing plans quickly, with impact. They can bring fresh perspectives and expertise gained from being in situations where time is of the essence, which can help calm and stabilise events, when panic and fear can otherwise set in.
Another advantage of an interim management appointment is that it signals a statement of intent. Organisations can show stakeholders that they are bringing in a specialist for a determined period of time. This creates a focal point for everyone to aim for, helping set a collective mentality for teams to think ‘we have this amount of time to put things right’. It sharpens the immediate focus on what needs to happen, minimising unnecessary distractions and ‘what ifs’ that impede progression.
Leadership stability can create confidence and drive consistency, creating a bedrock for driving an organisation forward, and especially when the pressure is on to rethink strategies and plans in the face of adversity.
Notes to editors
NSCG is a people advisory firm that helps organisations find, assess, build, and accelerate teams and leaders who are as good in practice as they are on paper.
The business does this through services which can be accessed individually or as an integrated service, from interim management and executive search through to talent intelligence, leadership assessment and development.
NSCG can tailor solutions to any c-suite challenge with solutions such as finding great leaders, developing strong talent pipelines and building high-performing, flexible teams with all the right skills.