Meritocratic benefits

Tesco is a UK firm who have been firing on all cylinders for many years. It used to be a grotty high street shop known more for it's green loyalty stamps rather than the quality of its food. Now it is the biggest grocer in tne UK and is rapidly expanding into other areas such as clothes and electronics, whilst also extending into overseas markets.

So what is their secret? I went to a presentation by their quality manager several years ago and asked him this question. He started out going on about predictable areas of quality in supply, clean shops, low prices, etc. But other stores do this and I suspected that there was something deeper, so pressed him further.

The real, deep secret of Tesco's success is, it seems, that it is operated as a meritocracy, where people are evaluated and promoted based on how good they are at their jobs, not how good they are on paper or how well they get on with the boss. This might seem rather obvious and there are many companies who would claim to likewise, but the question still goes back to the difference between words and deeds.

A shining beacon is the guy at the top. Terry Leahy started at the bottom and worked his way up. How many CEOs and others leaders now can you name who have done this? Many came in on an MBA fast-track and never got to feel the sharp end, particularly from the visceral position of the coal-face employee.

A problem that happens in promotion is where managers appoint people who think the same as them (or worse, are unlikely to challenge them). The result is a corporate blindness that stumbles forward, perhaps keeping a relatively even keel, but which does not do anything extraordinary.

Many employees' eyes in such places are firmly fixed on the boss, not on the real business, let alone the customer. When toeing the line beats getting better, the order of the day is unquestioned compliance. 'Leaving you brain at the gates' is an old production-line mentality that still echoes through in far too many organizations. Leaders should be leveraging all the minds at their disposal, not coercing them into the one true way.

I have never sat in a Tesco meeting, but I bet the minds there are mostly firing on all cylinders. You don't keep growing in a straightjacket, nor where selection is based first on personal preference. I worked for many years in Hewlett-Packard, which was one of the world's greatest companies where intelligence and contribution were highly valued. Tesco, I suspect, may have a similar intense feel.

Enough rambling! I'm off to do the weekly shopping. Guess where?

Your comments

Sainsburys?

It's rare to see a large organisation with such an admirable culture and their success is very much deserved.

Who's law was it that said people are promoted until they reach their level of incompetence? It's a law I bear witness to day in, day out.

-- Simon K.

Dave replies:
It is sadly rare, Simon. Strangely so, when it is such a clearly powerful factor and where natural selection and the ecology of business might suggest that it might be found more often. It says much about human nature.

Promotion to one's level of competence is the 'Peter Principle', as expounded by Laurence J. Peter in the book The Peter Principle. Many companies also have an 'up and out' principle, where you get promoted to your level of incompetence and then (sooner or later) get fired. More waste of money and people.

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