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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:
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Quoting the Jim
Collins book, “Good to Great” – get the right bums on the
right seats
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Bring in external
expertise/capability when missing internally
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Humility
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Don’t try and
take on too much
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A very interesting, honest talk.
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