Tesco’s chief executive Dave Lewis has to take decisive action to define his strategy following the revelation of the retailer’s overestimated profits.
It was the response of US President Franklin D Roosevelt when faced with the crisis of the Great Depression that defined the importance of the first 100 days of a new leader.
It has since been recognised as a key period in the success of any new regime when the powers of a new leader are believed to be at their most effective and the opportunity to drive change is at its peak.
His task was daunting, as external forces and internal mistakes conspired to force three profit warnings this year alone, the last accelerating the entry of the new chief executive as chairman Sir Richard Broadbent sought to fast-track fresh solutions to problems Tesco lifer Philip Clarke was unable to fix in his two years in charge.
Yet within a matter of weeks of starting, Lewis’s plans for a turnaround have already suffered disruption, following the shock revelation the grocer has overestimated profit by £250m for its first half. But strategy cannot wait as the new boss grapples to understand how much money his business is even making and restore a semblance of trust.
Some analysts are questioning whether Tesco can recover from this latest blow. But while the unexpected circumstances threaten to derail Lewis’s initial plans, the crisis and how he reacts still create the opportunity to define his leadership for the better.
His response over the weekend was decisive and the communication with wider stakeholders as clear as the muddied picture will so far allow. And negotiating the early arrival of incoming finance chief Alan Stewart from rival M&S is a significant early victory.
Finally, while the – so far – temporary loss of UK boss Chris Bush at the top of Lewis’s largest division robs him of much needed experience, the appointment of multichannel boss Robin Terrell to lead in Bush’s absence, demonstrates an ability to challenge the status quo. Terrell may lack hands-on store experience, but he has built an enviable reputation at a number of leading multichannel companies as a first rate retailer.
Roosevelt promised vigorous action when he began his 100 days. Lewis has also promised a swift response and vowed to be open and honest when he has all the answers. It will take a strong hand to pull Tesco out of this, and Lewis must be prepared for anything that is thrown at him.