If Tesco is in trouble, don’t blame the boss; Successful corporate leaders don’t always leave great legacies. Spare a thought for the boss who has to pick up the pieces

If Tesco is in trouble, don’t blame the boss

Successful corporate leaders don’t always leave great legacies. Spare a thought for the boss who has to pick up the pieces

Stefan Stern

theguardian.com, Friday 10 January 2014 09.00 GMT

Every little helps. But for Tesco, the journey back to health will be of the 1,000-mile variety, and for now single steps will get them only so far. The company’s latest results, in the UK at least, were weak. Like-for-like (based on existing stores) sales were down 2.4% in the six weeks to 5 January. “Clearly Christmas was disappointing,” its chief executive, Philip Clarke, said.Do not blame the boss. Tesco is a vast corporation operating in more than a dozen countries with half a million employees, and still making more than £3bn in profits annually. Clarke took over as CEO less than three years ago, after the 14-year reign of Sir Terry Leahy. If there are deep-seated problems at the company – and there are – then Clarke’s job has been to sort out the inheritance.

A similar word of sympathy should be extended to David Moyes, the manager of Manchester United. For several years under its previous boss, Sir Alex Ferguson, the club had continued to win trophies, partly because of the weakness of its opponents, and partly through its own intimidating reputation. Ferguson’s remarkable personality inspired his players to raise their game. But their vulnerability has been exposed now that a less superhuman figure is at the helm.

With success comes danger – the danger that an inevitable process of decline and fall must follow. The bad news from the high street is not limited to Tesco. Marks & Spencer, Morrisons and especially Mothercare are all suffering, with the latter being in the biggest trouble of all. Each of these businesses has been a dominant player in the past. All must hope that they are not stuck on a decline and fall trajectory.

What are the symptoms of this corporate death spiral? The management guru Jim Collins defined them in his book of a few years ago How the Mighty Fall. He described a five-stage process, with self-explanatory headings to mark each one: hubris born of success, undisciplined pursuit of more, denial of risk and peril, grasping for salvation, capitulation to irrelevance or death. M&S seems to have pulled out of this spiral round about stage four, which is where Morrisons finds itself now. Tesco only got as far as number three. But Mothercare may be on the verge of entering that fatal fifth category.

Failure is not inevitable. Companies and organisations that adapt and change with changing times have a future. And it may be possible to recover even when you are apparently on your death bed: the engineering firm Rolls-Royce had to be rescued by the Heath government in 1971 and is now a world-beater. Apple looked doomed until Steve Jobs returned from exile at the end of 1997 to revive his old company.

Leadership matters, but as well as the brilliant results of the day we have to look at the legacy. It is no use leaving employees, investors or supporters weeping and calling for more if things go wrong pretty soon after he or she has gone. But decline and fall is not necessarily a sign that a leader is indispensable. It may just mean that they haven’t done a very good job in preparing their organisation for their departure. As the American journalist Walter Lippmann said: “The final test of a leader is that he leaves behind him, in other men [and women], the conviction and the will to carry on.”

The best leaders, Jim Collins says, worry most about the business, not themselves, and regard as a central task handing on a healthy organisation with a strong new leadership team. So while we continue to marvel at the Alex Fergusons and Steve Jobs, we cannot offer a conclusive view of their performance until several years after their career is over.

There have been too many political, corporate and sporting leaders who have been hailed as heroes in their lifetimes, only to find that their legacies are unhappy and troublesome. Problems have arisen even before the cheering has died down. Look on their works, ye mighty, and despair.