Monday, January 27, 2020

Morrison‘s new Chief Exec takes encouraging first steps


Yesterday, Morrison‘s new CEO David Potts announced he will now be “constructing a leaner Management Board, with the aim of simplifying and speeding up the business.”

He followed on to thank Group Customer Marketing & Digital Director Nick Collard, Group Retail Director Martyn Fletcher, Group Property and Strategy Director Gordon Mowat, Group Logistics Director Neal Austin and Convenience Managing Director Nigel Robertson for their service to Morrisons, as they step down from the Management Board and leave the company.

He swung such a heavy axe in such a short space of time, so what of his decisions since he began his tenure with the Big Four grocer?

Potts‘ new role was announced a month ago, but this week marks only his second as Chief Executive Officer for the supermarket chain. He is already, according to Clive Black, an analyst at Shore Capital, “having a positive effect”. While it‘s too early to comment on the effects of less than a fortnight‘s work, some of the measures Potts has taken so far are rather salient.

He has abandoned the incumbent queue management system he inherited with the job, which annoyed store management and staff, as a key performance indicator. It didn‘t deliver a demonstrably better customer service compared to competitors, and in fact resulted in poor queue services on several occasions in recent years.

While Morrison‘s is not looking to become a “mini Tesco” (Higginson‘s words not ours), Potts has also followed a route travelled by his former employer‘s CEO Dave Lewis, and instructed all central office staff to spend time in-store over the Easter period and listen to customers. With an effective execution, the move will connect the business, familiarising central staff with what their convictions mean at the resulting end. In addition the whole team ethos, which can be very impactful when it works in a retailer, could potentially come to the fore. As Black puts it, “Morrison‘s needs a better commercial culture or perhaps put differently to re-connect with what made it so great in the first place when Sir Ken Morrison was in a groove.” It‘s likely that decision making will be improved as head office staff are encouraged to listen directly to customer feedback.

Black describes Potts year old as a “wise owl”. In January, Chairman Andrew Higginson cited that the new CEO‘s job would be suited to someone with experience, which the 57 year old certainly has (having spent over 40 years in grocery retailing).

While Potts‘s latest choice to shuffle five senior members of the board out the door is undoubtedly sad, it is nonetheless strategic. There is however, a lot more work to be done for the Tesco veteran, who will need to focus efforts on specific areas of the business including Morrison‘s price proposition, the promotional offer and other features of the shopping experience.