Case Study
Terry Tesco’s Long Shelf Life

Question # 3
The first weakness he mentioned was his “Irish Temper”. Explain and justify whether Terry Leahy has a bad temper or not.
Answer:
Terry Leahy doesn’t have a bad temper but he was demanding and ambitious that made him aggressive because according to him he had to deal with five, ten or thousand individuals who want to do something else. However, underneath Leahy was charming and warmhearted with good liverpudlian sense of humor. He had had an aggressive management style but this was ignored by his supervisors as according to one of his deputy chairman who supported his appointment says that:
“An CEO has to have a spiky side to him. You can’t be nice to everybody all the time.”
Question # 4
Is Terry Leahy really modest? How do you remain modest in spite of the success and the accolades? Does this man have no ego?
Answer:
Terry Leahy was a humble and modest person. His brothers left school at the age of 16. He admired his parents as they really work hard for him so that he could do his A-levels. Leahy has seen hard times in his life. According to him:
“It’s undoubtedly the case that if you have nothing behind you or if you’ve seen hard times it develops in some people anyway, an insecurity and the basic motivation to put the past behind you.”
Question # 5:
What type of self concept does Terry Leahy have and how does it affect the business success? Does Terry Leahy Posses a Theory X and Theory Y attitudes?
Answer:
Terry Leahy posses a Theory Y Attitude. As he believes that people want four things from their work: a job that is interesting, a chance to get on in life, to be treated with respect and a boss who is some help and not their biggest problem. If that’s all you do each day, try to give them those things, and then they will follow you anywhere. This strategy helps the Leahy and in his lead the Tesco stretched its lead as the UK's largest retailer and also grew internationally as the third-largest retailer measured by revenues.
Question # 6
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Question # 7
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Question # 8
Effective Leaders need to have skills and take actions on three different fronts i-e as strategists, as architects and as mobilizers (both internally and externally). Working through the case how would define Terry Leahy’s role as a strategist, as an architect and as a mobilizer.
Answer:
Strategist

* Creating a 4 pronged strategy prior to becoming CEO to have a vision on how to improve the company. * Knowing a diverse food goods portfolio was needed for increased future success. * Knew innovation in retail product categories was also necessary for competing with the competition. * Non-food market needed creation and implementation using its purchasing muscle * A need for entering the service sector industry * Need for international stores and businesses in the future * Realising that without proper execution this strategy is of no use.

Architect

* Implementing the 4 pronged strategy in stages successfully and delivering what he had planned. * Creating a leadership style which is based on modesty and concern for the customer * By moving out of the shadow of copying Sainsbury’s and using methods such as the “one in front” method to minimize checkout queues. * The Club card loyalty scheme introduced by Terry * The “Tesco Steering Wheel” was a good initiative to collect metrics on cusomters, operations and employees and would be the feedback backbone. * His Customer Insight Unit helped gain valuable insight on the business, its customers and competitors on a daily basis. * His customer-led approach helped create Tesco’s systems investments, a sophisticated data-mining system, and storage facilities which enabled the company to quickly respond to shifts in demand. * Tesco’s People Insight Unit also made sure it understood its staff so they could get a 110% commitment from them every single day. * The annual “Tesco Week in Store Together” program was essential to keep employees knowing their bosses also know the strains of the jobs they do every day. * Made sure their company image always gave the impression of being a “classless” store. * By introducing self-scanning machines this reinforced the ideal that the customer is the one in control. * His shaping of his employees into leaders made sure the operation of the company were always running seamlessly.

Mobilizer

* Using aggressiveness and determination to get the job done * Using his confidence as an example to motivate employees to always take charge and be empowered * Never being afraid of challenges and using them to instill triumph over adversity * His clear thinking and swift decision making skills made the company quickly gain headway to success * Competitiveness in him boosted the company to gain results among competitors as well increased the morale of his employees * His customer-led approach always made sure the company was ready to accommodate for the ever changing needs of the customers. * Always believed innovation and ideas don’t just pop up but a company needs to keep close observation on the way customers’ lives are changing.. * He not only implemented his own values in his company but also his own life. * He was always a part of every sector of his company’s running from visiting stores often to improve operations to sitting in on customer surveys.
Question # 9
What evidence is there that Terry Leahy’s leadership has evolved over time? How has he developed his career?
Answer:
Leahy’s leadership style is basically responsible for the organisational success of Tesco. This is essentially because Leahy sees Tesco’s transformation as the only variable that would guarantee his leadership making a difference . Therefore, for Leahy, transforming Tesco is more of leadership than management.

The success of Tesco was heralded by the appointment of Terry Leahy as the CEO. Leahy is considered as a visionary leader who led the company into a series of organizational changes that aimed for the company to become more customer-focused and to develop the company’s workforce. Terry Leahy is revered as an excellent leader. He believes that the success of a leader depends upon maintaining a happy workforce. Key aspects of his leadership include:

* Vision, values and culture are more important than strategies or marketing tactics and they should come from staff. He himself visited a store at least once a week to listen to staff and customers.

* Encouraging and growing future leaders. Leahy was quick to point out that Tesco’s success was not all his own, acknowledging that it was a team effort. Leadership was also found in customers. Leahy said that if you allow them, customers will take you further than you can go on your own

* Keeping things simple. People need to understand what is expected of them and how they can contribute. For leaders to grow and develop they need a clear framework.

Leahy’s tenure is proof of his leadership. The average CEO remains for four years while Leahy was CEO of Tesco for 14 years. Every chance that Terry got to prove himself he used. These opportunities increased his confidence step by step. The fact that the only tasks he ever got were the ones given to him proves that his career was built upon the fact that he kept his values intact and using his newfound skills along with these values made him the success he now is.

Question # 10
Identify some of challenges (or dangers) facing Terry Leahy today and in coming years.
Answer:
Tesco is currently faced with organisational change resulting from the announcement on the 8th of June 2010 that Sir Terry Leahy, the company’s outgoing CEO and the person largely responsible for the transformational leadership that has greeted Tesco since he became its CEO in 1997, will be resigning. Leahy’s departure will potentially mark a watershed in the company’s organisational culture, leadership model, entrepreneurial yield, level of productivity and above all change management occasioned by the transfer of leadership from Terry Leahy to Philip Clarke, who becomes Tesco’s CEO in March 2011.

The way the power transition is handled, as well as Philip Clarke’s leadership/management style will go a long way in bringing confidence back into the minds of customers, employees, shareholders and other stakeholders of Tesco plc in the wake of the leadership change. This will also define to a large extent Tesco’s future organizational structure. Only time will tell this.

As far as Tesco is concerned, its overseas projects could topple over when competitors tend to choose local companies for their competitive prices and slide Tesco operations to the side. While Terry’s 14 year leadership has made Tesco grow much but future leadership of the company needs to be trained so that they can follow the same growth pattern that Terry has helped sustain over the years. The situation of local industries development will affect Tesco because Tesco has a wide range of operations. So its various industries in the region are underdeveloped they cannot purchase locally and have to transfer goods from further afield or establish a local distribution. This will increase the cost of delivery of goods.