Essay: Coles group – management & leadership case study

Management & Leadership Case study
Executive Summary
In background of Coles Group was split up in 2007, meanwhile Wesfarmers bought the Coles with $22 million. For bring back the Coles to its former glory, Wesfarmers’ CEO Richard Goyder settled on Ian McLeod to running the business. (Robbins, Bergman, Stagg, and Coulter., 2012, p.9) In charge of Mr. McLeod, Coles has outperformed the market (meaning arch-rival Woolworths) for 18 consecutive quarters. (Gluyas, 2014) This case study draws attention to the four management functions: planning, organizing, leading and controlling, and how did Ian McLeod achieved these functions while he undertaking the Coles. Furthermore, this study also shows the three manager skills, what it is and how did Ian McLeod used these skills to achieved the management functions. In the last two parts of this study, it interprets the leadership styles and the organizational culture. Moreover, the Coles group belongs to the democratic management style and it has a strong organizational culture.
Q 1
As a manager, it must achieve four functions in the work. Firstly, is planning, they set objectives, develop strategies to integrate and coordinate activities on the purpose of achieve those objectives. Secondly, managers are responsible for arranging and allocating work to achieve the organiaztion’s goals, this is what we called the function of organizing. Thirdly, organization is built by people, a manager’s job is working with these people and through them to achieve the organiazation’s goals. Furthermore, a manager have to motivating their employees and leading the organization go forward. Thus, managers have a function of leading. Controlling is the last step of function, after planning, organizing and leading, a manager have to ensure all the things are running in the right track. To monitor, evaluate and handle all the changes and emergencies. (Robbins et al., 2012, p.14)
At the beginning of the work, Ian McLeod set a first goal for Coles that was to build a solid platform of improvement. It is ‘To give the people of Australia a shop they trust, delivering quality, service and value.’ To achieve the goal, Ian McLeod and his management team have established a five-year turnaround strategy that focus on serving customers better. (Coles, n.d.)
The first senior manager that employed by Ian McLeod was John Durkan. As merchandise director, he was in charge of the company’s merchandising and logistics. In 2008, Ian McLeod hired Stuart Machin as operations director who previously worked in Britain with Tesco, Sainsbury and ASDA-Walmart. Stuart Machin was responsible of lead reform in Coles’ operations and in 2011, he was ultimately in charge for 90,000-plus people and the smooth operation of 750 stores. (Coles, n.d.)
Ian McLeod thoughts Senior retailers have to get out into the stores because that is where you make your money and returns for shareholders. You don’t get it sitting in head office. Therefore, Ian McLeod usually visited Coles stores incognito, to see what his customers see. der him, Coles has worked to develop more open and attractive looking supermarkets. (McMahon, 2013)
When Ian McLeod visited Coles supermarket, he photographed wilting vegetables and empty shelves. He then used the photos to expose some of the failings of company and decided what needed to be done through his messages. Ian McLeod states, it’s not about catching people doing things wrong, it’s about catching people doing things right. (McMahon, 2013) What’s more, in order to make the group more efficient by cutting excess fat across the staffing spectrum, he scrap the executive parking.
Q 2.
The reason why does an organization need a manager is the manager has three skills: technical, interpersonal and conceptual skills. Technical skills are about grasp professional knowledge and techniques to solve specific task proficiently. Thus, these skills are more important for front-line manager. Human skills or interpersonal skills are a kind of capability that makes manager to work well with others people, that is, to achieve the function of leading, therefore, it’s essential in all the level of management. Conceptual skills are ability to conceptualise and overlook the whole organization. What level does a manager can master this ability affect their decisions making. Therefore, these skills become more important to the top manager. (Robbins et al., 2012, p.17)
Ian McLeod has a high level of technical skills, he has stayed in touch with supermarket almost 20-30 years, he made himself as a customer and see what his customers in the market. (Robbins et al., 2012, p.9) He knows what do customers need, how to service customers, what do a supermarket has be. After the visiting the coalface, he took a complete overhaul of entire chain. Stores are new open, inviting, and modern. Products are layout with the newest retail thinking to encourage customers “flow around” the sore, thus, they can spend more time even more money in the store.
Ian McLeod also realized that Coles lack of customers offering. (Lock, 2016) In order to improve customers service, McLeod instigated a range of innovative initiatives. Firstly, Coles trialing of sushi bars, professional coffee shops, and ovens for baking fresh pizzas. Secondly, Coles expanses the group’s online offering to give its customers a ‘One-Stop-Shop‘ service. This service allowing customers to collect orders at locations such as Coles Express petrol stations. (McMahon, 2013) Thirdly, the most impact and controversial action that Ian McLeod did which also revealed his conceptual skills, the ‘$1- a–Litre-Milk’ plan.
As consequence of this plan, Australian shoppers, especially Coles’ customers are benefit from about $1bn-a-year in savings, which have been established on the cost savings in the supply chain. (Gluyas, 2014) In another word, McLeod wants to increase the revenue through selling more products, rather than increasing prices. (McMahon, 2013) And not just cut the price in one year then re-rise the next year, but sustainably, for five years. This plan helps Coles’ sustainable development, it may dilute the short-term earnings but it’s worth to waiting for the long-term value. (McCrann, 2015)
The above strategies can call be settled down successfully is because of Ian McLeod’s interpersonal skills. He just not only standing on the side of customers, Ian McLeod also making something different on the side of supplies and his employees. Ian McLeod is the first boss of Coles to be visited in Coca-Cola’s head office for 40 years. He made Coles has benefit from strengthening supply chain management and reduce prices, enabling price reduction to be passed to customers. Furthermore, Ian McLeod emphasis on enhancing employee quality, such as visited stores unannounced. Management communicates with their people. The staffs are better trained, more highly motivated, and more customers conscious. (Lock, 2016)
Q 3.
The University of Iowa studies explored three leadership styles: autocratic, democratic and laissez-faire style. The autocratic style described leaders who make decisions on their own, prescribe work methods and limited employees’ participation. (Robbins et al., 2012, p.606) The democratic style illustrated a leader who let employees participate in decisions making, delegate more responsibilities to lower level sectors, it makes employees feel included and promote teamwork and creativity. The laissez-faire style interpret a method of leading that let the groups make their own decisions and working in the way they like, usually, it’s the least effective style of leadership. (“Leadership styles and Types….”, n.d.)
The most appropriate style in managing the Coles Group is the democratic style.
Before Ian McLeod arrived at Coles, he received a resulting book from Richard Goyder who asked all the senior and middle store managers to list the problems that they could point out and to offer solutions. From that, McLeod realized those managers knew what needed to be done to fix it as well. Then, in the first year of his job, he spent $130 million solving problems which was identified by the store levels and has put streamlined reporting structures in order to ensure ideas from the coalface keep coming. (Speedy, 2009)
Furthermore, Wesfarmers made a drastic clean-sweep in the Coles’ group, it removed the whole previous top management layer, and allowing the new Managing Director, Ian McLeod, to set up an entirely new leadership team. Wesfarmers want to through this operational structure to dismantle the previous bureaucratic structure and culture that had existed at the “old” Coles, and delegating more authority to store levels. (Robbins et al., 2012, p.9) For further communication, Ian McLeod initiated the ‘retail round-up’. This idea was to celebrate some quick wins, and every month they would have at least one person let others know how they were going. It was a chance to discussing some important things but also a chance for a bit of fun. (Lock,2016)
Q 4.
Organizational Culture is the behavior of members of an organization and how do they react to their actions. Culture includes the organization values, norms, working language, systems, symbols, etc. It can affect the way employees and groups interact with each other, with customers, and also with shareholders. Thus, it’s a pattern of perceiving, feeling and even thinking that will teach to new group’s members. (Inah, Tapang & Uket, 2014, p.191) Although every organization has its own culture, not all cultures can affect equally to employees. Only those cultures which can be shared widely, accepted and identified strongly by group’s members can be called strong cultures, or weak cultures. It means the person who work in an organization with strong culture will behave as the shared values. (Robbins et al., 2012, p.98)
Besides the existed problems, Ian McLeod also find out something from the resulting book: those employees lost the way to interact with one another, what’s more, Coles lacked of culture and spirits. Therefore, in the first few weeks, he addressed hundreds of people and used team members’ words instead, because employees were the ones who knew what to be done. On the bottom of McLeod’s every slide he had a logo of “Proud to be Coles”, and he also established a “Way of Working” : Lead Effectively, Act Collectively, Support Consistently, Motivate Universally and Care Passionately, it remains as true as ever today. By the end of every presentation, the audience knew that Coles’ turnaround was a fight worth fighting.’ (Coles, n.d) The reason why Wesfarmers wanted to delegating more responsibilities to store levels is staffs could take more pride in their work.
The number one motivator is a sense of purpose, followed by money, security, flexibility and the chance of advancement. Coles Operations Director Stuart Machin said that a sense of purpose comes from a wider sense of belonging, so he decided to create a feeling of community across their 100,000 team members. Meanwhile, Coles emphasis one motivating and engaging team members, with the idea “selling and serving with personality” to excite them about the future. In the stage of the chance of advancement, Coles recruit people internally and provide all the necessary guidance and training to help them succeed. According to Stuart, it’s never the employee’s fault if they don’t reach their potential; it’s the company’s for not providing the correct environment for them to shine. Because of the above, Coles’ employees getting and keeping fired up and purpose, thus, Coles has a strong culture. (Coles, n.d.)