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Delighted to be here at the launch of Enterprise Week – encouraging enterprise is an ambition we all share: business and government, small business and big business
• When people talk about enterprise, they typically think of a small business – and of course Tesco started as the archetypal small business by Jack Cohen who use his demob money to set up a stall in London’s East End
• Maybe these days they think about a University spin-out, or a student who is brilliant at computers sitting alone in his room while everyone else is at parties, who becomes a billionaire in his twenties when his clever idea turns into Google or Face Book
• You might not think of Tesco. But hang on a minute, Tesco is a good example of how you move from being a small to big company, hardwork, enterprise, innovation
• 10 years ago, Tesco was pretty much a British grocery business. Today we are an international business providing telephony, financial services, legal services, books, music, electrical goods. We have hypermarkets and Express stores and we are on-line. Think how much change we have seen in 10 years
• Number of STRANDS which can help others and contribute to today’s debate
• There is FOLLOWING THE CUSTOMERS. Keeping on our toes. Staying humble. It’s the secret of our turnaround and continued success.
• There is DISCIPLINE. Tesco is famous for good process. Its not only that we have a good, clear long term strategy. It’s that we implement it well. Enterprise is not about being FLASHY. Its about getting up early and having the discipline to implement well – on top of the stock loss, avoiding wasted minutes at checkout or reception, good considerate management of sickness and family issues
• There is TRAINING. At every level – we only have 6 levels. 1 in 10 are training to get to the next level. I’ll come back to that.
• There is SUPPORT. Our culture is that to get on you have to support your team and your staff. No-one gets promoted who can’t do this and it’s a great ingredient in Social Mobility. I’m the only Oxbridge educated Exec on the Board. David Potts - who runs Retail in the UK - started as a shelf stacker and he is the most brilliant manager of people
• And there are INCENTIVES – more difficult for the public sector but human nature means people want to do a good job, if well led. Share schemes which allow people to share in the success – 175,000 staff shareholders at Tesco – and a bonus system which is inclusive not divisive. We all do well or we all fail.

Tesco: an enterprise culture

• So how does Tesco try to build an enterprise culture?
• Our culture is very different to Whitehall’s. We think in terms of opportunities. We want our managers to take responsibility, and challenge conventional thinking so that they innovate. We allow people to make mistakes. Praise them and promote them for doing well and overcoming problems and coping with dilemmas. Our success depends on people.
• You can’t make people enterprising if it is not in them, but you can remove obstacles which might hold them back.
• So we keep bureaucracy to a minimum. Every instruction we send out from Cheshunt has to be easy to understand and quick to relay. Keep it simple. Better, simpler, cheaper. We have respect for what can be done – we don’t initiate change at Christmas, Easter, half-term – people will struggle
• We don’t try and run everything from the centre – we push responsibility down and trust managers to manage. It’s a global company but store managers are CAPTAINS OF THE SHIP. They HIRE, if need be they FIRE and our international CEOs run huge independent business.
• And if you take our whole international business which employs 100,000 people – only 100 of them are Brits.
• We don’t let the boardroom or those in Cheshunt become remote from the shopfloor and forget what our business is about. TWIST – every Director and Senior Manager goes back to store to work as a general assistant once a year. Terry also does two days visiting stores every week.
• And another important cultural signal – we don’t have a swanky HQ in Central London. We are on an industrial estate in Cheshunt, Jack Cohen’s old veg patch
• Another way we empower people is to give as many of our staff as possible a personal stake in the business as I have already said. All our employees are eligible for three share schemes – Save As You Earn, Buy as You Earn and Shares in Success. Last year our staff shared £148 million worth of shares paid out as part of our Save As You Earn scheme. And our Shares in Success scheme gave out a further £77 million worth of shares – these are meaningful sums that give staff a real stake in how well we do as a business.

Recruiting the right people

• That’s some of the ways in which we try to keep Tesco enterprising. But it’s no good having the right culture and the right overall strategy if you can’t find the right people to implement it. This is our biggest challenge.
• If you think how large and varied a business Tesco is, you will realise the huge spread of skills we need. We need managers and accountants and IT specialists and experts it logistics as much as we need people who are good at looking after our customers in stores. We need graduates and we need apprentices. Young workers and old. Full-time and part-time
• At the most basic level, need people who can read, write and add up. You might be extremely enterprising but if you can’t do the figures or read properly you can’t progress.
• Beyond that, in a business like ours, we really need personal skills – the skills of team-working and communicating with others. These are skills which our educational system doesn’t really teach, so we try to help out. All our stores staff are given personal skills training that helps them offer a more friendly and helpful service and communicate better with their customers – and each other.
• One of the key lessons we have learned over the years about getting the right people in the right jobs is the importance of training and promoting from within. Our Chief Executive, Terry Leahy started as a graduate trainee. Our Director of International had his first job with us as a Saturday boy
• In the last three years we have appointed 27 Directors, 200 Store Managers, and 8,000 Department Managers from within Tesco. Next year, we will appoint over 3,000 new managers in the UK: 80% to be internal appointments. What this builds up is not just know-how, but loyalty and commitment and an understanding of the Tesco culture. Diversity and encouraging women to be confident and get on whatever their circumstances are also very important to us.
• We also see Apprenticeships as an important way building a well-trained and motivated workforce
• Our Apprenticeship scheme is now entering its third year. Called Apprenticeship in Retail, it gives people the opportunity to get an NVQ Level 2 qualification and is proving very people, and not just with the 16-24 year old age group.
• Older staff also want the chance to get on and get a qualification and so we have opened it up to everyone at Tesco, with age being no bar. Nearly 600 of our staff have already gained their Apprenticeship, and we reckon that should be nearer to a thousand by the end of our third year. Perhaps even more exciting we are moving, thanks to great flexibility by the Government departments concerned, to a situation where Tesco training counts towards a degree
• The other big lesson if we are talking about building tomorrow’s workforce is that training mustn’t just be a one-off. Its something we need to do all through our careers. So at Tesco, we offer life-long learning at four learning centres, and we also encourage staff to learn something new even if it is not directly related to their job. Some people are studying photography, some are learning brick-laying, some are learning languages. Whatever it is, it is helped people to develop as individuals and grow in CONFIDENCE which is something they take into their job. If our staff feel valued and find what they do rewarding, they will go the extra mile for customers and the whole business will do better. And if they don’t settle or move home, they can take their skills elsewhere.

Conclusion: lessons learnt

So to conclude let me outline the main lessons we have learnt about how to remain an enterprising company.

- first, keep everything SIMPLE. Simple core purpose, processes, management structure and bureaucracy and red tape saves time and money
- second, TRUST PEOPLE. Allow people to make mistakes and challenge conventional thinking – how else are we going to innovate and learn?
- Third, don’t be inflexible and try to run everything from the centre. Have clear aims and goals – but DELEGATE the detail in a DISCIPLINED way
- Fourth, never stop LEARNING AND TRAINING – training doesn’t stop when you start a new job. You need to go on learning until the day you leave.
- Firth, NEVER STOP LISTENING TO YOUR CUSTOMERS – whatever business you’re in, its they who pay the bills.


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