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FIRST PERSON

Back in Fashion
How We’re Reviving a British Icon
After achieving record profits in 1998, Marks & Spencer lost sight of what had made it
a beloved British retailer for a century – and as a result, profitability plummeted by 85%.
By focusing on just three things, we are turning the business around.

YEL MAG CYAN BLACK


by Stuart Rose

W
HEN I TOOK OVER Marks & Spencer in the spring of
2004, I immediately realized that the previous
management’s idea of delegating decision making
to the lowest possible level had gone horribly
wrong. Major decisions were being made by people not experi-
enced enough to make them. We had assistant buyers spending
£30 million to £40 million of the company’s money without
oversight. Imagine that happening in ten different depart-
ments – which was the case at M&S. More than £300 million was
being committed without senior management’s sign-off. It was an-
archy and very high risk. While delegating decisions is a good phi-
losophy, it works only if those at the top of the organization are
Karine Daisay

watching and supporting their teams.


The board and audit committee had known a year earlier that
the company was carrying too much inventory, but nothing

hbr.org | May 2007 | Harvard Business Review 51


FIRST PERSON | Back in Fashion: How We’re Reviving a British Icon

had been done about it, and no one First Battles First I met with nonexecutive director
had been held accountable. One of my I had wanted the job of running Marks Kevin Lomax at 10:30 in the morning
first decisions was to put someone in & Spencer long before it was offered to on Thursday, May 27, 2004. By 2:00 pm
charge of stock management and tell me. I spent my formative career years that same day, retail investor Philip
him that there were two crimes he had here – in a variety of roles in the textiles Green, now Sir Philip, had signaled his
to avoid: being overstocked and being and food divisions and then as the intention to launch an £8 billion hostile
short of stock. Now, every Monday at head of European operations. Although takeover bid. By 6:00 pm, the com-
12:30 pm, he reports back with an up- I left M&S in 1989, its allure always pany’s bankers had asked if I could
date on where inventory stands. We remained. meet with the board the next morning.
scrutinize our total stock – what’s on For those outside the UK, it is diffi- Over the weekend, the entire manage-
order, what’s in the warehouses, current cult to understand just how powerful ment landscape shifted. On Monday it
supplier commitments, and so on. Prob- the M&S brand is. It is a national insti- was announced that I was the new
lems are not allowed to fester. This is tution. Two prime ministers, Margaret CEO of Marks & Spencer and that my
probably the most important thing I’ve
done as CEO.
With a focus on fundamentals like
stock control (which had been forgot-
ten amid scores of consultant memos) Three things needed
and with the support of a strong execu-
tive team, I’ve tried to steer Marks &
doing right away:
Spencer back to the levels of profitabil- improve the product,
ity it achieved before its sharp decline. improve the stores,
Back in 1998, M&S was the first British and improve the service.
retailer to reach a profit of £1 billion.
Just a few years later, profits were down
It was – and still is –
to £145 million. The problem was, M&S that simple.
lost its customers’ trust; it lost sight of
what had made it great for more than
100 years.
Today we’re back on track. In No-
vember 2006, we posted half-year prof- Thatcher and John Major, both fa- predecessor, Roger Holmes, together
its of £405.1 million – up 32.2% from the mously said they bought their under- with Luc Vandevelde, had departed.
previous fiscal year. The company’s wear at Marks & Spencer, just like I knew I had a turnaround on my
turnaround has been almost entirely nearly a third of the people in the UK. hands, but I didn’t realize the scope
due to its renewed focus on the basics For decades schoolchildren have known until I actually saw M&S’s books the
of the business. I have never wanted that the requisite trip to M&S for new weekend I agreed to become CEO. Most
to use the word “strategy” to describe uniforms signals the end of summer. frustrating of all, I couldn’t get started
what we’ve done, because that makes Professionally, I was brought up there. right away. The first six weeks of my
it sound terribly complicated, and it’s Although I led three other companies tenure were spent fighting off Philip
not. As I told the board when I accepted in the 15 years after I left M&S, it was a Green’s bid, the largest hostile takeover
the CEO position, three things needed bit like the first girl you really loved. attempt in the UK to date. Every morn-
doing right away: improve the prod- You could never quite get her out of ing at 8:00, as many as 30 people would
uct, improve the stores, and improve your heart. gather in a room for what we called the
the service. It was – and still is – that So as I witnessed M&S’s painful prayer meeting. The battle for M&S
simple. decline – from 1998 to 2000 the com- would ultimately be waged in the press,
pany lost more than two-thirds of its so we spent our mornings planning
Stuart Rose is the CEO of the London-based market cap – I kept looking for my how to make our case. Typically, I would
retailer Marks & Spencer. He is also a non- chance to come back. In May 2004, spend three hours making press calls
executive director of the UK property devel- after months of speculation, it was and doing radio and TV interviews. It
opment company Land Securities and the announced that then-chairman Luc was relentless.
chairman of the British Fashion Council. Pre- Vandevelde would be leaving, and I The entire management team at
viously, he served as the chief executive of thought there might be an opportu- M&S would prove to be crucial in the
Arcadia, Booker, and Argos, all of which are nity for me. As it turns out, my timing turnaround, but for the media battle,
based in the UK. was good. I had to be at the front. The press cov-

52 Harvard Business Review | May 2007 | hbr.org


erage boiled down to the perceived values that had made M&S an icon, as vice. We had to fix all of them, and fast.
strengths of the possible management well as selling off our financial services There was no Plan B.
teams – one led by Green, who owns business to HSBC Bank and buying the Because the Christmas season is key
two of the UK’s largest retailers (British Per Una womenswear brand from its to the entire retail year and to how in-
Home Stores and Arcadia Group), and creator, George Davies. In essence, I dustry analysts gauge a company’s
the other by me. Though I’d been chief promised to turn M&S back into the health, the clock was ticking. It would
executive of three other companies, I kind of store that customers loved. Two be at least six months before the actions
probably earned my reputation as a days later, Green withdrew his bid. I wanted to take had any effect. Assum-
turnaround specialist at Arcadia, where I allowed myself to celebrate for ing we started right away, we might be
I inherited a company with £250 million about two minutes. just in time for Christmas. Or we might
of debt and trading losses in 2000 and Although the entire company had already be too late.
engineered a £855 million sale to Green begun a long-planned move to new cor- The biggest problem was that the
in 2002. The press reveled in the idea of porate offices during the height of the company was sitting on about £3 billion
in inventory, and we were taking in only
£4 billion in the first half of the year.
We had 35 weeks’ worth of stock. (To
put that into perspective, by March
2005 – less than a year later – we had re-
duced our stock and commitments by
£1.3 billion, which brought us to a
much healthier level.) And this was not
the kind of stock we wanted to have.
For most of its history, M&S had sold
only one brand, its own St. Michael
line, which had embodied the “value
for money” philosophy. But during the
1990s, it had created something like
16 subbrands, few of them attracting
any real customer following. A short-
lived but expensive advertising cam-
pitting Green and me against each other. takeover battle, I had stayed with a paign made the point that Marks &
During the life of Green’s bid for Marks small team in the historic Baker Street Spencer’s female customers perhaps
& Spencer, there were about 2,000 arti- headquarters to remain focused. On needed roomier and more practical
cles on M&S a month – and at least that July morning, rattling around in clothing. Customers certainly didn’t
twice we were the lead item on the BBC the nearly empty building, I was acutely appreciate that message – naturally,
10:00 news, ahead of Iraq. It was surreal. aware of being alone. All the advisers they wanted something more aspira-
Clearly, the battle hinged on our abil- were gone – with their fees. Philip tional. Our styles had become dowdy

YEL MAG CYAN BLACK


ity to convince reporters, analysts, and Green was off on his boat for a six-week and the product quality increasingly in-
investors that I was the one to lead holiday. I sat there thinking, “I need ferior. The inventory wasn’t moving. We
M&S back to prosperity. Having such a holiday desperately,”and I hadn’t even were stuck in a rut of buying as far as six
intense scrutiny of you personally, as a started yet. months in advance. In the UK fashion
leader, can cause self-doubt. There were industry, which was moving faster than
times when I wondered if I really could ever before, M&S was missing all the
pull it off–especially because every mo- Don’t Even Consider a Plan B latest trends. We were left with moun-
ment I spent fighting the battle was a It took about a week to decide whether tains of stock that no one wanted to
precious moment I wasn’t working on we could actually pull off what I’d said buy. We had no choice but to sell it at a
getting M&S back on track. I tried to we could do. I didn’t give myself too discounted rate and take a hit on our
squeeze in meetings with heads of de- much time to think about it because I margins.
partments early in the morning to start didn’t want to be seduced into changing A confluence of events had led to the
planning, but it was hard to find the my mind. People within M&S were al- rapid fall of M&S after our 1998 peak.
time I needed. ready lobbying for different plans, dif- First, the British financial community
On July 12, I outlined my plan for ferent strategies. So I began a campaign started to apply pressure for M&S to
Marks & Spencer, which, most impor- to hammer home just three things: do something with all the cash it was
tantly, included focusing on the core product, store environment, and ser- generating. So the company began to

hbr.org | May 2007 | Harvard Business Review 53


FIRST PERSON | Back in Fashion: How We’re Reviving a British Icon

spread itself thinner in an effort to “in- the shops and hope they’d sell. It was I did was designed for clarity. I’d
vest” in its future while pushing mar- a supply-led strategy, not a demand- brought just two people with me when
gins and prices in order to drive still led one. I took the job: Charles Wilson, the exec-
higher profits. The business also be- As it became clear that one successful utive director of IT, supply chain, and
came inward looking rather than cus- line could not, in reality, fuel a sustain- property, and Steve Sharp, who later be-
tomer facing. It lost its focus on the able revival by itself, M&S suddenly dis- came the executive director of market-
product and the customer and got covered the allure of consultants. But ing and store design. I had worked
bogged down in processes and initia- for a company that had long prided closely with both of them during the
tives. Diverted from its retailing heart- itself on home-growing talent, the years I was away from M&S, and I knew
land, Marks & Spencer embarked on heralding of consultants to bring in we had complementary strengths.
other ventures – an ultrahip furniture “fresh” ideas sent a damaging message Knowing one another as well as we
store, for instance, and a clothing brand throughout the ranks. Looking to the did, we were able to hit the ground run-
for trendy young teenagers – which outside for help was seen as an admis- ning. The three of us went to work on
alienated its core customers. sion that M&S didn’t have the talent the obvious, to deliver the things I’d
As M&S was reveling in superretailer within. Existing staff understood the promised. Wilson would need to find
status, the UK retail market became message to be that they had contrib- £260 million in immediate cost savings.
much more competitive, but the com- uted to the downfall of the business – Sharp would revamp our tired market-
pany either didn’t notice or just didn’t and that management wanted to change ing and our company brand. I’d take
take the competition seriously. In the the gene pool. care of the front of the house: the prod-
years right after M&S hit peak prof- When I rejoined the business, there ucts, their pricing, and delivery to our
itability, rivals like Next drew more and were 31 “strategic projects”being run by stores.
more customers away with offers of these consultants. There was constant First we looked at our supply base.
high-quality and stylish clothing at change. The company was lurching We told the suppliers this wasn’t just a
great value. Supermarkets like ASDA from one strategy to another. If a strat- Marks & Spencer problem; it was “our”
(owned by Wal-Mart) began encroach- egy didn’t work by Friday, a new one problem. We were going to sink or swim
ing on traditional clothing retailer was initiated on Monday. The staff together. We said, “If you can think
about shaving your margins, we can
turn a vicious cycle of high stocks, low
For a company that had long prided itself on home-growing stock turnover, low profitability, and
low cash flow into more volume, better
talent, the heralding of consultants to bring in “fresh” ideas
cash flow, and improved profitability.
sent a damaging message throughout the ranks. It’ll be a virtuous circle – a win-win sit-
uation for M&S and for you.” I person-
ally met with the top 30 suppliers in
space. Rather than using its market became demoralized by the onslaught both foods and textiles, the majority
strength to see off these entrants, M&S of ever-shifting, unclear messages and of whom were long-term partners of
got greedy. Prices kept going up, and strategies, which led to more bad deci- M&S. In the end they all came to the
value suffered. A few things helped sions about product and further dam- party; we were able to trim £100 mil-
camouflage the deep-rooted problems. aged the way M&S dealt with custom- lion off our supply chain costs – and
For example, in 2001, when we launched ers. It was a rapid downward spiral. we didn’t lose a single supplier in the
the Per Una line, it brought half a mil- process.
lion more customers to our stores each That was only the beginning of
week. At the time, the success of that Clean House what would be a major overhaul of
one line was widely viewed as the en- One of the most important messages I our supply chain. We’d been doing
gine for a turnaround, and the media wanted to send to our staff was that things like purchasing fabric in one
briefly toasted our “comeback.” they should trust their own judgment hemisphere and then shipping it to the
In hindsight, I think this uptick had a again. I led by example, relying on my other for manufacturing. It just didn’t
lot to do with buoyancy in the retail gut and dispensing with all but ten of make sense. We eventually opened up
market in general. At its heart, the the ongoing strategic projects. I didn’t five sourcing offices (strategically lo-
management team didn’t really know do any research – in part because time cated in Hong Kong, India, Bangladesh,
why things were getting better and was too precious. But also, it was a de- Turkey, and Sri Lanka) to help us make
which things were working. No real liberate response to the consultant better decisions about the entire chain
core changes had been made. We used years, which were awash in numbers of purchasing and distributing our
to just make products and put them in and surveys and complexity. Everything products.

54 Harvard Business Review | May 2007 | hbr.org


FIRST PERSON | Back in Fashion: How We’re Reviving a British Icon

spread itself thinner in an effort to “in- the shops and hope they’d sell. It was I did was designed for clarity. I’d
vest” in its future while pushing mar- a supply-led strategy, not a demand- brought just two people with me when
gins and prices in order to drive still led one. I took the job: Charles Wilson, the exec-
higher profits. The business also be- As it became clear that one successful utive director of IT, supply chain, and
came inward looking rather than cus- line could not, in reality, fuel a sustain- property, and Steve Sharp, who later be-
tomer facing. It lost its focus on the able revival by itself, M&S suddenly dis- came the executive director of market-
product and the customer and got covered the allure of consultants. But ing and store design. I had worked
bogged down in processes and initia- for a company that had long prided closely with both of them during the
tives. Diverted from its retailing heart- itself on home-growing talent, the years I was away from M&S, and I knew
land, Marks & Spencer embarked on heralding of consultants to bring in we had complementary strengths.
other ventures – an ultrahip furniture “fresh” ideas sent a damaging message Knowing one another as well as we
store, for instance, and a clothing brand throughout the ranks. Looking to the did, we were able to hit the ground run-
for trendy young teenagers – which outside for help was seen as an admis- ning. The three of us went to work on
alienated its core customers. sion that M&S didn’t have the talent the obvious, to deliver the things I’d
As M&S was reveling in superretailer within. Existing staff understood the promised. Wilson would need to find
status, the UK retail market became message to be that they had contrib- £260 million in immediate cost savings.
much more competitive, but the com- uted to the downfall of the business – Sharp would revamp our tired market-
pany either didn’t notice or just didn’t and that management wanted to change ing and our company brand. I’d take
take the competition seriously. In the the gene pool. care of the front of the house: the prod-
years right after M&S hit peak prof- When I rejoined the business, there ucts, their pricing, and delivery to our
itability, rivals like Next drew more and were 31 “strategic projects”being run by stores.
more customers away with offers of these consultants. There was constant First we looked at our supply base.
high-quality and stylish clothing at change. The company was lurching We told the suppliers this wasn’t just a
great value. Supermarkets like ASDA from one strategy to another. If a strat- Marks & Spencer problem; it was “our”
(owned by Wal-Mart) began encroach- egy didn’t work by Friday, a new one problem. We were going to sink or swim
ing on traditional clothing retailer was initiated on Monday. The staff together. We said, “If you can think
about shaving your margins, we can
turn a vicious cycle of high stocks, low
For a company that had long prided itself on home-growing stock turnover, low profitability, and
low cash flow into more volume, better
talent, the heralding of consultants to bring in “fresh” ideas
cash flow, and improved profitability.
sent a damaging message throughout the ranks. It’ll be a virtuous circle – a win-win sit-
uation for M&S and for you.” I person-
ally met with the top 30 suppliers in
space. Rather than using its market became demoralized by the onslaught both foods and textiles, the majority
strength to see off these entrants, M&S of ever-shifting, unclear messages and of whom were long-term partners of
got greedy. Prices kept going up, and strategies, which led to more bad deci- M&S. In the end they all came to the
value suffered. A few things helped sions about product and further dam- party; we were able to trim £100 mil-
camouflage the deep-rooted problems. aged the way M&S dealt with custom- lion off our supply chain costs – and
For example, in 2001, when we launched ers. It was a rapid downward spiral. we didn’t lose a single supplier in the
the Per Una line, it brought half a mil- process.
lion more customers to our stores each That was only the beginning of
week. At the time, the success of that Clean House what would be a major overhaul of
one line was widely viewed as the en- One of the most important messages I our supply chain. We’d been doing
gine for a turnaround, and the media wanted to send to our staff was that things like purchasing fabric in one
briefly toasted our “comeback.” they should trust their own judgment hemisphere and then shipping it to the
In hindsight, I think this uptick had a again. I led by example, relying on my other for manufacturing. It just didn’t
lot to do with buoyancy in the retail gut and dispensing with all but ten of make sense. We eventually opened up
market in general. At its heart, the the ongoing strategic projects. I didn’t five sourcing offices (strategically lo-
management team didn’t really know do any research – in part because time cated in Hong Kong, India, Bangladesh,
why things were getting better and was too precious. But also, it was a de- Turkey, and Sri Lanka) to help us make
which things were working. No real liberate response to the consultant better decisions about the entire chain
core changes had been made. We used years, which were awash in numbers of purchasing and distributing our
to just make products and put them in and surveys and complexity. Everything products.

54 Harvard Business Review | May 2007 | hbr.org


Then we made changes closer to More difficult was the housekeeping novation,’ and ‘trust.’ Is quality still
home. The most symbolic thing we did we had to do at corporate headquar- worth what it was in 1965? Is value? Is
was to have a massive housecleaning. ters. At the time of Green’s takeover service? Is innovation? Is trust?” I knew
Because there were so many different bid, there were about 3,500 corporate what I wanted to do. I knew we had
subbrands in our shops, we had lots of employees. We determined that we had excellent people at Marks & Spencer –
signage and titles and names on card- to cut 650 people across the board to the homegrown talent had much to
board cluttering up our stores. We had achieve the cost savings we needed. offer. But our people were disheartened
a skip delivered to all of the stores –
every single one – and asked them to
toss everything out. On the scale of I used to say, “Look, in textiles you can do anything
things, that may not seem like a big
provided it’s legal. In foods you can do anything provided it’s
deal, but it quickly made quite an im-
pact on the way the stores looked and legal and you don’t kill anybody.Those are the only rules.”
how employees felt. Retail analysts had
long noted that the stores were too
dark, too cluttered, and too bland, and Having cut so many staff from a busi- to the point of questioning everything.
they were right. The stores looked ness as culturally embedded as ours, I I wanted to push them to stop worry-
dated. We weren’t in the same league had to spend probably 90% of my time ing about all the reasons something
as trendier retailers like Zara, Next, over the next six months convincing might not work or needed precedent.
and Topshop. It was the beginning of people who were already pretty disillu- I used to say to them, “Look, in textiles
a major store-by-store refurbishment sioned that we were making progress. you can do anything provided it’s
program, which cost us more than I spent a lot of time in meetings reiter- legal. In foods you can do anything
£500 million by the end of 2006, with ating my key message: “What are the provided it’s legal and you don’t kill
an additional £800 million earmarked five words we’ve always used in our anybody. Those are the only rules. Get
after that. business? ‘Quality,’ ‘value,’ ‘service,’ ‘in- on with it.”

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YEL MAG CYAN BLACK


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FIRST PERSON | Back in Fashion: How We’re Reviving a British Icon

I had to get them to remember our and over to go back to the core of what He got a bottle of champagne – and
core strengths and to start showing ini- they knew. To think the way they used I used his story to illustrate just what
tiative. But at the same time, I knew to. We had those conversations item by could be achieved. I still talk about him.
they had, at least temporarily, lost their item, department by department. Fortunately, many employees have fol-
perspective on the fundamentals of I was trying to shake up a culture of lowed his example.
what made our products great. I tried paralysis. Hiding behind data or prece-
to sit in on all the meetings on prod- dents to avoid making a decision had to
uct–on blouses, skirts, pants, men’s ties, stop. If it looks like a duck and it quacks Invest in Staff
men’s shirts, everything – so I would like a duck, you don’t need to send it for Little by little, as better-quality product
know very quickly whether they were DNA testing to find out six months later began coming into the stores and cus-
going right or wrong. People myopically it’s a duck. Take a risk, guys. It’s a duck. tomers started buying a bit more and
focused on the wrong things. For exam- Every now and then, there would be grumbling a bit less, I could see the
ple, they’d triumphantly point out that a glimmer of hope. One Sunday night, store teams begin to hold their heads
a particular fabric had been made in a looking through Vogue magazine to up. That was a huge accomplishment in
superfantastic factory. I’d say,“Yes, well, bring myself up to date, I noticed some itself, because for five years customers
can you tell that to the customer?” And green espadrille shoes. I went to the had been wagging fingers at them – and
they’d say, “No…but the stitches are footwear department the next morning some of them, in turn, had been giving
slightly more dense. See?” And I’d say, and said, “Why haven’t we got any worse service.
“Does it make any difference to weara- shoes like this?” The following after- A lot of the reasons for poor service
bility? What margin are you taking on noon, the head of operations for foot- were not the fault of store staff. First, we
this? What volume are you taking?”Our wear e-mailed me to say we’d designed had fallen behind in pay rates. We were
quality had to stand out, and it had to our own espadrille, bought the raw ma- in the lowest quartile of UK retailers on
stand out at the right price. We were terials, and briefed the factory in China, pay, and we were no longer attracting
holding excruciatingly basic conversa- and we would have 12 dozen in our flag- the quality of staff we wanted. During
tions, but I wanted to remind staff over ship store in ten days. the crucial busy Christmas season of

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2004, more than 2,000 people failed to force, 56,000 people, attended motiva- Corporate Governance:
show up for temporary positions – they tional training sessions, sometimes Effectiveness and
had received more lucrative offers else- 5,000 employees at a time. These cov-
Accountability in
where. Our turnover rate for new staff ered the basics: making eye contact,
was nearly 80% within the first two working as a team, knowing what cus- the Boardroom
years of service. We couldn’t sustain tomers expect, that sort of thing. But it september 4–7
that. There were hundreds of different was like a religious revival – Gober got
hourly rates for customer assistants. We everyone to stand up and move their Market Access
narrowed the range and brought the hands about. I think the employees
scale into the top quartile of UK retail were shocked at first, but by the end,
Strategies: Leveraging
industry compensation. Perhaps most people gave it high marks. At the same Your Channels of
important, we instituted a clear reward time, we began much more formal Distribution
structure. Traditionally, we had re- training for the 8,000 people in our new september 9–12
warded only length of service. If you coach role. Gradually, we started to see
had been at M&S for 15 years and you feedback from customers that they be-
gave bad service, you still got a raise. We lieved our service was improving. Even Strategic Marketing
started insisting that store managers better, the training and the clear career Communications
rate the quality of service each em- paths enabled employees to regain september 9–12
ployee provided – and offered raises some of the pride they’d lost.
only on that basis. For the first two years
after we altered the pay structure, some
Accelerating Sales
of our longest-serving employees were Lead with Your Strongest Assets Force Performance
not eligible for raises. The most visible sign of progress was september 16–20
We also had to standardize working the refurbishment program, which we’d
hours. For years our employees had begun on a trial basis in stores around Pricing Strategies
been allowed to choose the hours they the country. It was clearly working. In
worked for us. Obviously, though, cus- the spring of 2005, we realized we
and Tactics
tomers come in when they want to, should be trying to roll that out even september 16–19
not when we want them to. It was faster, but it was pretty complicated. We
crazy. Getting adequate coverage meant were ordering things on a massive scale: Negotiation Strategies
changing our employee contracts. We 100 escalators, 100 lifts, 20 miles of re-
for Managers
had about 300 different types. We nar- frigerators. I should have insisted we
rowed that down to just three. move faster (indeed, by the autumn of
september 16–19
Our career structure was also overly 2006 analysts were pressing us to do
complex, and it didn’t offer much hope so), but it seemed too much to ask at Kellogg Management
for advancement. We streamlined that, the time. I didn’t really hit the acceler- Institute
too, down to just four levels for our ate button until midsummer 2005 –
september 20–may 9, 2008

YEL MAG CYAN BLACK


store staff: the trainee and qualified po- and that cost us a valuable six months.
sitions, which already existed, and the In the stores we’d remodeled, we were
newly created coach and section co- beginning to see a return on our invest- Governing the
coordinator positions, which were de- ment of around 17%. We were also to- Family Business
signed both to offer people the prospect tally changing customers’ experience in october 7–11
of career development and to enrich our stores. We needed an environment
their training time before they moved in which people felt good about the
to management. premium they were being asked to
Then we pulled out all the stops – pay for the quality of products we sold. Upcoming programs where the business
certainly for a British institution like Our food halls, for example, were now world’s most courageous minds tackle
M&S – and gave our store staff a bit of decked out with matte steel refrigera- its most challenging issues.
what I’ll call Billy Graham–type train- tors and shiny black-tile floors.
execed.kellogg.northwestern.edu
ing. We brought in customer service We’d also finally regained our stride
consultant Mary Gober, the only con- in advertising and marketing. We led 847-491-3100
sultant we’ve retained in my years as from the food side of the business, be-
CEO. Over a nine-month period, start- cause it had suffered less than the cloth-
ing in July 2005, the entire store work- ing side and for that reason was seen as
FIRST PERSON | Back in Fashion: How We’re Reviving a British Icon

our stronger asset. We took a calculated four other people who have played an you’re mortal.” Fortunately, there is no
gamble on heavily increasing our food important role in our success since shortage of volunteers doing just that.
advertising in the months immediately 2004: Kate Bostock, the director of And so I’m beginning to look for-
after I took over. The first new ad we womenswear; Guy Farrant, the director ward. I hate the word “legacy,” but I am
did was simple: We showed the beau- of food; Anthony Thompson, the direc- trying to set some ambitious long-term
tiful food we offered. Internally, we tor of retail; and Andrew Skinner, previ- goals to put M&S on a sustainable
called it food pornography, because it ously the director of menswear and course. In January we announced a
zoomed in on every morsel, with a sen- now the director of general merchan- £200 million “eco-plan” – we’re calling
sual voice-over from a well-known ac- dise planning, sourcing, and supply it Plan A – that will shape everything
tress. It was a hit. Sales of the chocolate chain. When this expanded top man- about the way we do business. M&S
pudding shown in the ad increased by agement team started meeting this Jan- will become carbon neutral, have none
3,000% right before Easter in 2005. It uary, I realized that I would need to cre- of its waste going to landfills, ensure
was a needed morale boost – and a sig- ate a formal agenda for meetings, that as many of its raw materials as pos-
nal to investors that we were on our something I had never done before. sible come from sustainable sources,
way back up. But I recognize, too, that developing raise the bar in ethical trading, and help
As for our much maligned women’s people is key to an organized succession customers and employees lead health-
clothing, once the crown jewel of M&S, plan. In January I finally used the “r” ier lives – all by 2012. None of this will
we found the right spokesmodel for the word–“recovery”–in part to stop the re- happen at the expense of value for
message our typical customers did lentless media scrutiny on whether we money, on which we have built our
want to hear. We lured the 1960s fash- had or hadn’t “recovered.” We are now reputation, and none at extra cost to
ion icon Twiggy – now a fabulous 50- at a better place, and we’re making customers.
something, like many of our custom- good profits. There’s more work to be We’ve created a 100-point plan out-
ers – out of modeling retirement to be done, though, just to carry out what I lining a wide range of significant com-
one of the new faces of M&S, alongside said I’d do three years ago, let alone mitments to fundamentally change the
models Erin O’Connor, Laura Bailey, take the business to the next stage. If way we do business. Those include mak-
and Noémie Lenoir. Our customers re- you look at our growth over the past de- ing ourselves 25% more energy efficient,
sponded enthusiastically. As we had cade compared with, say, Tesco’s, ours is powering our stores with “green” en-
done with food, we invested in high- U-shaped, and Tesco has had a straight ergy (generated, for instance, by waste
profile advertising campaigns. Our best line of continual growth year on year. from our food halls, farms, and facto-
seller in womenswear, for example, is a Last year Tesco generated £750 million ries), using 50% biodiesel fuel in all our
£35 jersey dress modeled by Elizabeth in profits on “development opportuni- trucks, recycling all the waste from our
Jagger (Mick Jagger’s daughter). ties” alone. That was our total profit store remodeling program, and reduc-
We’ve aimed to create three price number. We still have a long way to go. ing the water used in our stores, offices,
options in every type of product: I’ve got to start thinking about where and distribution centers by 20%. We’re
good, better, best. Each represents good to take the business over the next four also introducing a huge number of or-
value. Our clothing isn’t cutting-edge or five years if we do get all this done in ganic and healthy lifestyle products,
trendy, but it’s fashionable. We’re get- the UK. Otherwise, we’ll be back to and we expect to be a leader in manag-
ting good reviews in the fashion pages, where we started and stuck with the ing labor standards in our supply chain.
and our clothing market share is grow- business we’ve got, which is the largest I’m proud of the ambitious scope of
ing once again. of the small retailers and the smallest of what we’ll be trying to achieve in the
the large retailers in the UK. That’s just next five years – and hopefully we’ll do
not good enough. even more.
Keep It in Perspective Odd as it seems, the company is in a But I have to constantly remind my-
Three years into my tenure, with signs delicate position at the moment. Yes, self that I am merely a guardian of this
of health throughout the business, I rec- we’ve gained back our confidence, and great business and that my job is to
ognize that it’s time for me to take a the media and investors seem to be leave it in better condition than I found
step back from the level of microman- championing our achievements. We’ve it. If I fell under a train tomorrow, I’d
agement and focus on building for the gone from zero to hero more quickly like the next CEO to be able to say, yes,
future. We’ve extended the executive than we fell in the first place. But one I can work with what he built. He could
committee, which sits just under the must never let confidence become arro- have turned left but, thank God, he
main board. Previously, this committee gance – and the most important person turned right.
consisted of me, Steve Sharp, and Ian it must not happen to is me. I need
Dyson (who replaced my initial CFO, somebody to occasionally whisper in Reprint R0705B
Alison Reed, in 2005). It now includes my ear, “Remember, chief executive, To order, see page 147.

58 Harvard Business Review | May 2007 | hbr.org


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