Revelations about the scale of the management structure that prevailed at Tesco until the dawn of its 2014 accounting scandal have emerged in the fraud trial of former executives Carl Rogberg, Christopher Bush and John Scouler.
While the three deny all the charges against them, their barrister Nicholas Purnell QC nonetheless shed light upon the governance challenges that the supermarket faced, describing the size of the brand’s management team as akin to the “civil service of a medium-sized country”.
Addressing jurors at Southwark Crown Court, Purnell explained: “The way in which Tesco was organised at this time was to place various different functions in various different geographical areas.” As a result, Purnell said, former finance chief Rogberg’s office was not in the same part of the country as the accounting team’s HQ.
Purnell also sketched a picture of severe workload strains stemming from the brand’s intensive financial reporting protocol: not only did Rogberg oversee between 200 and 300 individuals – his unit was required to produce a whopping 2,860 separate reports per month on the firm’s activities.
Earlier in the trial, evidence was heard of an email sent to Rogberg from a senior member of the finance team calling for “cultural change” among Tesco’s management which, in Rogberg’s interpretation, signalled a “need to start doing things in a different way”. With that in mind, to what extent do large organisations require civil-service-sized management structures in order to function? And what are the inherent risks of having an unusually large management team?
The Institute of Leadership & Management's head of research, policy and standards Kate Cooper says: “In complex organisational structures that are so far away from the customers – as seems to be the case with Tesco – it’s very important for the management team to keep asking itself, ‘What is the point of us? What value do we add? How are we clear that our activities are actually enriching our value proposition?’ This is a great example of a firm that is producing reports at an astonishing rate, but not actually thinking about the value of those reports to the business. So examining whether those materials really have the required effectiveness and impact would be a priority here.”
Cooper notes: “Gathering data is actually the easy part. But putting it to good use is another matter. It’s vital not to lose sight of the real cost of our data-harvesting exercises, which is the time that it takes to analyse the stuff – and to gain useful insights from it that may affect our behaviour as managers. Because if the data isn’t serving that kind of purpose, then perhaps the organisation needs to take a less analytical approach and get back to basics. Far be it from me to say that leadership and management teams are too big. But in terms of coordinating them, it’s all about how many people you can i) really get to know, ii) effectively motivate, and iii) engage in conversation about the value they’re adding.”
She adds: “Of course, the more complex and densely populated the team is, the more difficult communication tends to be. It is also easier to unintentionally duplicate work, or to set in motion tasks that diverge from each other, or even overall business aims. So having strong relationships with the people you’re managing and checking in about the value that each team member is adding are absolutely fundamental.”
For further thoughts on effective teamworking, check out these learning resources from the Institute
Image of Tesco shopping trolleys courtesy of D K Grove, via Shutterstock
Other resources of interest
- 15 December 2017