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Talk by Nick Badminton, Pick and Pay (PnP) CEO

November 2011

The other evening we attended a talk by the CEO of Pick n Pay, Nick Badminton, at the Regenesys Business School. It was an honest discussion about where PnP is at present and where it needs to go.

His talk really resonated with us at Maestro Performance as he used excerpts from the TED talk on comparing leaders with conductors (His father was a conductor): Click here to view the video. He ends with Leonard Bernstein, at a stage late in his career, where he just leads through his facial expressions – a nod, a smile. Nothing more needed to produce superb music – what leadership to empower the orchestra to play masterfully with so little physical effort from him!

PnP has 60,000 employees, turnover of R60b and has a labour bill that is 2% higher than its competitors. They are currently in negotiations to change their Labour Agreement. The agreement is so rigid that the staff that are idle on Monday morning when very few people shop, cannot be moved to work on the weekend. As Nick admitted, what a waste of money, as they have to use labour brokers to get staff in on the weekends!

PnP is currently on a change journey to become ONE PnP. In the past, every region and hypermarket was run separately and autonomously. Now they are centralising the common departments, such as distribution and purchasing, Human Resources, etc. Each store manager is still responsible for customers, staff management and efficient and effective distribution to their store, even though the distribution function has been centralised into large distribution warehouses. They are only now getting into KPIs. He admitted that they had thumb-sucked performance for many years. After a painful six years, they have now installed SAP systems, R650 million later! This data plus the data from Smart Shopper is helping them tremendously. Four million shoppers joined Smart Shopper, totally exceeding expectations. They even ran out of application forms!

The new Nicol store has been a huge success. Its turnover is now close to that of a hypermarket. It is being used as a learning centre for PnP and new innovations/improvements are then implemented in the other stores. The Score shops that they converted into franchisee stores have generally been a great success. One store’s turnover increased from R2m to R7m and is now around R14m per week. Lack of skills has been the main reason for the unsuccessful ones.

In order to improve stock efficiencies they are finally moving to category buying, something their competitors have been doing for many years. They also need to bring back the discipline in the workplace. One member of the audience spoke about how different his experiences were. In Benmore he was welcomed, in Maponya Mall he felt that the staff “were doing him a favour”, and wanted him to leave as soon as possible. Discipline is about how you greet the customers, how you speak respectfully to your peers etc. and he admitted that it needs to be consistent across all stores.

Their two recent change projects had different levels of success. The first was a change in the values and mission. Here, groups from around the country were brought together to formulate them. They then took the discussions back to their immediate group. This resulted in everyone buying into the new values and the project was a huge success. The second project was about the rebranding of PnP. Here it was done by an external company and not everyone was involved. Two years later, some parts of the country are still not on board.

Another interesting fact is the size of the informal market in this country. He knows of some stores that turn R40 to R50 million a month and people are not aware of such turnover.

He was asked what is needed to succeed as a leader:

  • Quoting the Jim Collins book, “Good to Great” – get the right bums on the right seats

  • Bring in external expertise/capability when missing internally

  • Humility

  • Don’t try and take on too much

  • A very interesting, honest talk.

 

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