This week’s focus: When I first became the Head of Strategy for Boots the Chemists in 2000, the UK retailer had just found itself in the middle of a supermarket price war. From a position where Boots had slightly higher prices than the Tesco, Asda and the other grocers, the company’s confused executives had rapidly found their shelf edge prices were now 20% or more higher than shoppers could find in their weekly supermarket shop.
My first job, obviously, was to understand the reality of the price gaps, their impact on trading performance and what customers were saying about them. As I reported back to the executive team, I expected that there would be an overwhelming demand to shift Boots’ pricing position.
I was wrong. While some directors argued for more effective price cuts, a majority believed that the prices were still competitive.
The power of cognitive dissonance and a desire by these executives to avoid going back on their previous views and decisions, meant that Boots continued, lemming-like, with its pricing position. It took a new CEO coming into the business, a few years later, before Boots’ prices became genuinely more competitive again.
This morning, as the Conservative Party celebrates a landslide election victory, I hear similar levels of denial from the spokesmen and women of the Labour party about the causes of its defeat, as I did in the Boots boardroom twenty years ago.
I make no political point, but one thing’s for sure: Labour won’t see power again until its leadership team genuinely understands the reasons for this result and properly face into the facts of the situation. Whether they are prepared, willing or able to do so is a different matter altogether.
The good news is that your business is, most likely, a lot easier to manage than the Labour Party. So, ask yourself, where is your business struggling to deliver against its performance ambitions and goals? And what do you need to do differently to fully face into the reasons for these shortfalls?
Off The Record: I Want You by Elvis Costello and the Attractions
The truth can’t hurt you
It’s just like the dark
It scares you witless
But in time you see things clear and stark
© Stuart Cross 2019. All rights reserved.