Mike Petty interviews Matalan CEO for Retail and Leisure International
In January's issue of Retail and Leisure International, Mike Petty discussed the importance of strong leadership with the Chief Executive of one of the UK's best-known retailers:
In the opening line of his international bestseller, The First 90 Days: Critical Success Strategies for New Leaders at All Levels, Harvard Professor, Michael Watkins, warns new business heads that: "The President of the United States gets 100 days to prove himself; you get 90".
Whether or not you believe that Gordon Brown proved his ability during his first 13 weeks at Number 10, much was certainly made of the differences between he and his predecessor, Tony Blair, and not all of it favourable.
Just a few months earlier, similar comparisons had been drawn between newly appointed Chief Executive of Matalan, Alistair McGeorge, and his forebear. The company had just been, very publicly, taken private, and all eyes were on the former CEO of Littlewoods, keen to see whether he would be the one to steer the under-performing retail giant back to its former glory.
Alistair says: "Before starting at Matalan, I read in Retail Week that the previous CEO would be a hard act for me to follow. But external pressures didn't concern me – after all, I wouldn't have taken the job if I didn't think it was a great opportunity.
"What I found when I arrived was a business in a predictable state of turmoil. Despite having had access to the management team in advance of taking up the position, I actually found the situation to be a lot worse than I had expected. Having said that, there was nothing that couldn't be fixed, which meant that there were also more opportunities available to us than I had been able to foresee."
The previous CEO had announced his departure a year before leaving, which, inevitably, had left the leadership in a state of flux. Setting the right tone from the outset was of the utmost importance.
"I hate mediocrity so set about communicating the way I like to work and my expectations as soon as possible," explains Alistair. "There was a distinct lack of confidence throughout the organisation, and I knew that it was key to reduce costs and generate cashflow in order to create financial breathing space and allow us more time to move forward.
"Having built up a clear picture of the executive team's performance from advance meetings, I replaced a number of individuals on day one. With the necessary redundancy programme out of the way quickly, I then focused on building a strong team and reassuring the remaining workforce of their job security. It was important for the future of the business that they didn't spend the next few months looking over their shoulders."
An undoubtedly unsettling experience for the remaining staff, Alistair knew that, for them to buy in to what he was trying to achieve, he first had to reassure them that such sweeping changes would ultimately prove to be for their benefit, as well as that of the business.
He continues: "There was no performance management strategy in place, which had left the staff confused about what to aim for and with no real understanding of what was expected of them. It was key, therefore, to instil morale and to motivate each member of the team by setting both short and medium-term individual objectives."
Aware of the need to avoid alienating his staff, Alistair also insisted on a forward-looking culture, introducing regular forums in which staff at all levels could air grievances and have their questions answered.
"Everything is up for debate, but, from day one, I have refused to look back or talk about the past," he explains. "What we do talk about when we come together is the future and how we are going to make the business successful.
"I had a feeling that there had been insufficient investment in the buying and trading sides of the business, with many staff being expected to fulfil two roles. This had had a negative impact on performance, resulting in a severe lack of morale in those departments. By developing a more defined structure, we were able to give people the confidence that we would be reinvesting in this important area, allowing them to look forward.
"People were also operating in silos, so we set a number of joint objectives in order to encourage individual departments to work together, sharing best practice and ideas."
While John Hargreaves has now resigned as a director of Matalan, he remains the owner of the business and fully aware of how it is operating. Alistair describes the man widely reported as being ‘difficult' to work with as ‘a pleasure'.
He says: "I really couldn't speak more highly of John. As the owner of the business, he of course has the largest vested interest in what's going on. We talk on a regular basis and, while he doesn't always agree with my decisions, he lets me get on and do my job.
"We have had a number of real successes with the business already, but there is a lot still to do to turn its fortunes around. Redefining and implementing a new strategy will be crucial.
"As a Chief Executive, refusing to be driven by ego is also important to the success of your tenure. It doesn't matter to me where good ideas come from as long as they're executed and executed well. Quality execution gives confidence, and that's ultimately how we are going to succeed – by focusing on the proper execution of a small number of key things.
"Maybe previous CEOs were more ego-driven than me; if you walk into an entrepreneurial business and try to stamp yourself and your personality all over it, you're only storing up problems for yourself in the future."
Indeed, in stark contrast to Tony Hayward, Alistair was notable in his absence from the broadsheets during his first months as CEO. He explains: "You will hear from me in the media only when it helps the business and is founded on success. One of my previous bosses taught me that you only have credibility to lose by talking about hope, particularly in the early days of your tenure. Ultimately, words mean nothing. Results speak for themselves."
January 2008
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