The Essence of Leadership

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Defining Leadership
“Leadership is the process of influencing and
supporting others to work enthusiastically toward
achieving objectives”.

- Barnard Keys

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Who is a Leader?
“A Leader is a person others opt to follow to a place
they would not have gone by themselves”.

- Joel Barker

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Effective leader
Effective leaders are not born with the gift of knowing
how to lead. Rather, they gain experience, they absorb
knowledge, they see and listen to the world around
them - both inside the organization and beyond.
Effective leaders are also capable of assuming the
leadership qualities needed for specific situations.

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Charismatic leaders
 A charismatic leader may seem to be born with a gift
to inspire.
 Have a clear, fresh, new, and creative vision.

 Be completely devoted to their vision.

 Make great sacrifices to achieve their vision, taking

personal risks Create a sense of urgency among

their followers.
 Use persuasion rather than forceful commands or

democratic appeals to influence their followers.

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Transformational
leaders
leaders remold an organization not through the force
of their own personality but by appealing to their
people, gaining their trust and respect.
 Provide a well-defined path to attain the vision.

 Act with confidence, optimism, and self-

determination.
 Encourage their people to work as a team rather

than as individuals to reach the organization's goals.

 Empower people to make good decisions for the

benefit of the whole.

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 Pragmatic leaders
 The most apparent characteristic of pragmatic
leaders is their focus on the organization rather
than on people.
 Have a vision that is recognizable as a variation of

the status quo.

 Listen carefully to their people.

 Make realistic decisions for the good of the

organization.
 Put the right people in the right positions to get the

job done.
 Delegate responsibilities to people they can trust.

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 Leaders vs
Managers
Leaders Managers
Creates a new order Maintains existing order
Opportunity focused Resource focused

Comfort in ambiguity Comfort in clarity

Opportunity centric Constraint centric

Innovative Adaptive

Big picture oriented Detail oriented

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 Leading vs Managing
 Which is more important –Creativity or Execution?
 The essential difference is the degree to which

people initiate, own, anticipate, experiment.

 It is the difference between path creation & path

dependence.
 Greater the complexity of business, higher is the

need to blend both the capabilities.

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What good leaders do not
do
 Compete with their own people

 Consider that they have a lousy team

 Place popularity ahead of effectiveness

 Sacrifice the means for the end

 Create a future that enables self preservation

 Sacrifice the team to prove a point

 Say, “I told you so…”

 When a new order is ushered, let people say, we did

it by ourselves

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Structural vs Situational
Leadership
 The Bison Herd Model
 The Bird Model

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The Bison Herd Model

Early settlers immobilized bison herds by seeking out and

killing the alpha male! Organizations led by leadership base
on permanent precedence are vulnerable.

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 The Bird Model

Migratory birds are a good example of both situational

leadership and outstanding followership. As they fly, they
keep changing the lead, yet reach their destination.

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The Price of Leadership
 Quite often, it is a lonely Migratory birds are a good
trek example of both situational
 Anger, disappointment and leadership and outstanding
subversive
followership. As they fly, they
 compliance come with the
territory keep changing the lead, yet
 The price is often deeply reach their destination.
personal – Gandhi, Moses,
Wallace, Christ, Mandela
 People do not like to see
their leaders as human
beings. There is a human
side, unseen side. We need
to accept that fact

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Case Details :

Case Code: LDEN036

Period:1995-2005
Organization: Tesco
Industry: Retailing
Country: UK

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TESCO
 Jack Cohen founded Tesco in 1919.
 Tesco brand first appeared in 1924.

 The first Tesco store was opened in 1929 in Burnt Oak,

Edgware, Middlesex.
 Tesco floated on the London Stock Exchange in 1947 as

Tesco Stores (Holdings) Limited.

 The first self service store opened in St Albans in 1951.

 The first supermarket in Maldon in 1956.

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Abstract:
The case discusses the management style of Terry
Leahy under whose visionary leadership Tesco
emerged as the largest retail chain in the UK.
It discusses how Leahy has changed Tesco's
positioning from a store which primarily catered to the
low-end customers to a store catering to high-end and
value conscious customers.

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The case outlines how Leahy transformed Tesco to a
customer-centric organization. It also examines the
strategies introduced by Leahy like diversifying into
high margin non-food and services sectors that helped
Tesco become the biggest and most profitable retailer
in the UK.

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Issues:
» Role played by a leader in changing the fortunes of
a company.
» Strategies adopted by Terry Leahy to transform
Tesco into one of the major players in retail market.
» Examine the innovative management practices
introduced by successful leaders.

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Tesco under Leahy's
Leadership
 Leahy attributed Tesco's success under his

leadership to four principles. These, principles

according to him, were:-
 We have been clear about what we wanted to

achieve.
 We have listened to what our customers have told

us.
 We have given responsibility to our managers and

staff.
 We have kept things simple.

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'Steering Wheel' strategy
 Leahy named the strategy he wanted to adopt as
'The Tesco Way' which comprised of the company's
core purpose, values, principles, goals and the
Balanced Scorecard.
 Steering Wheel had four quadrants - operations,

people, customers and finance.

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Balanced Scorecard
system
The Balanced Scorecard system aimed to change
organizations from financially driven to mission driven
organizations. Through four business perspectives -
financial performance, internal processes, customer
knowledge and learning & growth, the Balanced
Scorecard converted strategy into an integrated
management system.

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Bringing price down

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Earning Customer Loyalty
 Listen carefully to the customers, and try to give
them what they want.
 Tesco introduced several initiatives like price

reduction, improved product availability and well

trained staff.
 To provide optimal staffing at checkout counters,

Tesco introduced automatic labor scheduling.

 It also provided customers with a wide variety of

information through in-store handouts and on its

website www.tesco.com

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The Criticism
Though Tesco's financial performance under Leahy
had been outstanding, he was criticized on several
counts, especially for the company's HR policies. The
average wages paid by Tesco were among the lowest
in the retailing industry in the UK. The salaries were
paid on an hourly basis and the time taken off for tea
breaks was not considered while calculating the total
working hours. Tesco's staff were not given any sick
pay for the first three days they were off.

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