Stuart Rose needs no more oily praise, yet I wonder how many times he woke up and thought it would prove too difficult to reverse the “love to hatred turned soap” at Marks & Spencer – particularly as those who run the country (ie the media) were enjoying themselves so much giving the company and its people such a hard time. But Rose was, and is, an M&S man who had an instinctive feeling and affection for the brand – and brought in the right people and gave them their head.
This is also true of Sir Terry Leahy, who I heard speak recently. While I had obviously come across the Tesco story before, I was struck again by how much this man epitomises the qualities of truly successful chief executive officers as captured in the book Good to Great.
As you may know, this book studies the qualities common to chief execs of the world’s most successful companies – and found they are not what you might expect. Contrary to expectations, the success of “celebrity” chiefs (the high-profile ones who are helicoptered to the board with fanfares and huge golden hellos) is inversely related to sustainable company performance.
In fact, lower-profile, key executives, who tend to be at a company for years, who understand all the important levers of the business, and subsume their egos into the greater good of the brand, are the real stars. But among the many other reasons that have made Leahy so successful is his ability to elevate retailing beyond being a good merchant to being a great brand builder.
I mention the two examples in the context of Sir Philip Green’s current struggles to turn Bhs around. Clearly, Green is much richer than the aforementioned, which for some will mean case closed – and just a matter of time before the right trading formula is found.
And Green is undoubtedly one of the most talented traders. But there seem to be a number of reasons why Bhs will take a lot more than that to turn around – and a number of reasons not to feel particularly cheerful about the prospects.
Chief among these are the extraordinary competition in the fashion – and home furnishings – market. Whereas a few years ago we were all talking about the squeeze on M&S from the high-fashion retailers, and the fast and furious high-street competition at the other end, that retailer has now triumphantly taken back its huge swathe of the high middle-ground with charm, quality and courage. And pushed the competition back in its place.
Now, Bhs is squeezed in its turn between M&S and the Primarks of this world, and needs to find a position to fight from.
And that, of course, is its biggest challenge. No one would doubt Green’s ability to source and trade some great merchandise. Nor indeed, to come up with some attractive celebrities to create ranges and publicity. And even, to come up with some bright and contemporary store designs.
Yet, Bhs has a problem that only brand thinking can solve in a sustainable way. It needs clarity – what it’s about and how that’s different or better than the competition. Consistency, too, must run through everything the brand does, from how the phone is answered to the way it trains its staff and presents the goods, and there must also be leadership in terms of agenda setting and innovation. Corny and obvious though it might sound, it needs a brand idea. And, in my experience, that’s about the most difficult conversation you can have with a traditional retail merchant.
Brand ideas are seen as something that might be added on in ads or in-store communications if you can fit them in around the product range and price. But certainly not something that’s got anything to do with organising the business to stitch in competitive advantage through everything you do – and so build sustainable value.
And yet, Bhs has got a lot it can say about itself. It’s got a very interesting history; it could champion and channel new and interesting (and good value) British designers; it could “own” Home in a practical and helpful way; it could be the smarter/better value M&S the home of affordable design. But any idea would need new thinking and a determination to try something different. And frankly, if I had a few billion, I might need some hard persuasion that I wasn’t right about everything already.
However, this might well be a case where a bit of open-mindedness could pay off.
• Rita Clifton is chairman of Interbrand