Listen and learn the key to Tesco’s rise to top of the pile

On a sunny day in Bridlington, Sir Terry took his audience back to a dark time for Tesco’s management, when the company trailed rivals like Sainsbury’s and Marks & Spencer.

Few analysts gave it much chance of catching up.

Twenty year later it’s at the top of the heap, and Sir Terry wanted the 700-strong audience at the Yorkshire International Business Convention to find out how this transformation had been achieved.

The first lesson, according to Sir Terry, is to find the truth, which is no easy task in a big organisation.

“Human nature gets in the way,’’ Sir Terry said. “Nobody wants to be the messenger of bad news.”

According to Sir Terry – who was Tesco’s CEO from 1997 to 2011 – the most reliable guide for any business is the customer.

“All I had to do was listen to the customer, and follow them wherever they went,’’ he said.

Which brings us to another of Sir Terry’s core beliefs – the importance of having “audacious goals”.

Of course, it isn’t just retailers who can be bold.

Such audacity was displayed by his home city of Liverpool, when it decided to create a giant shopping centre which helped it to rocket from 17th to fourth in the UK retail table.

Sir Terry’s commitment to Liverpool is reflected in his membership of the city’s Local Enterprise Partnership.

At Tesco, Sir Terry made a strategic decision to sell more clothing, and launch the Clubcard – one of the best known loyalty cards in retailing.

“People are never short of needs in their lives,’’ said Sir Terry. “Clubcard transformed our business. We knew what people were buying and when they were buying it.”

Sir Terry said that Tesco had an “exemplary record” in terms of anonymising data.

“Competition is good. I found being in a competitive market forced Tesco to do its best work. If we didn’t look after the customers, they could go somewhere else,’’ he added.

During his presentation, Sir Terry gave an insight into the retail world of the future. It’s anticipated that more people will shop using their mobile phones, and “virtual” shops will be created, where consumers touch screens to order goods.

Sir Terry said the best leaders “would take you further than you would go on your own”.

He added: “You want thousands of leaders in an organisation.”

Sir Terry also predicted that there would be a convergence of traditional and online retailers.

He added: “There will be a lot of change, but a better industry will emerge.”

He acknowledged that the company’s US business, Fresh & Easy, hadn’t been the success Tesco had hoped for.

But he added: “If you try to run a business and never have a failure, you will never have a success.”

It’s unrealistic to believe that people in public office will never make a mistake, he added.

VERDICT: 7/10: A measured, informative, concise account of Tesco’s rise under Sir Terry’s leadership.

He’s obviously a very clear strategic thinker, who enjoys using data without losing sight of the bigger picture. It would have been nice to have heard a lot more about his Liverpool roots, and his work to revive his home city.

A few jokes and personal touches would have made it more appealing to a non-retail audience.