Look out Marks, here comes Tesco

January 20, 2007

Earlier this week, Mark and Spencer announced its spectacular greening policy which propelled it into the lead position among top British retailers. Now Tesco announces its plans for becoming a greener and cleaner organisation. While the Marks’ Plan A may just shade it in coherence and specified targets, we are clearly witnessing a battle for corporate credibility on environmental policy. This may well produce a rising tide effect in such efforts in retailing which will impact throughout the distribution chain.

M&S chief Stuart Rose announced the company’s Plan A (‘there is no Plan B’) earlier this week. He would have been fully aware that he had done no more than steal a few days start over industry leader Tesco.

Today, Sir Terry Leahy CEO of Tesco responded. Leahy presents a more measured leadership style than the effervescent Rose, but he is developing into a formidable communicator for his organisation. He also has a tougher message to convey in shaping the public perception of Tesco’s stance as an environmental leader.

The communications battle: M&S 1 Tesco 0

In exploring behind the leaders’ pronouncements this week, I turned to the respective corporate web-sites. This is a simple if crude measure (but both companies are fully aware of the importance of first impressions). M&S had a clear lead in this particular battle. News of its new environmental policy had been clearly and highly visibly posted. In some contrast, the Tesco site has not been updated. The ‘latest press releases’ today had not been updated from the year end. The corporate responsibility pages were equally unforthcoming on Tesco’s new plans. If Marks appeared to have a launched a campaign after careful preparation, Tesco by contrast seems less ‘joined up’.

On this measure it’s M&S 1 Tesco 0

The likely environmental impact of the plans M&S 1 Tesco 1

Going beyond the economic: The impact of political leadership

What are the forces supporting these initiatives? The traditional economic rationale would look to explanations that gauge shifts in public opinion and attempt a cost-benefit analysis. Such analyses remain important as corporate leaders will continue to communicate with institutional stakeholders for whom the decision to support a company will depend on evaluation of its short-term profitability. Governments take a slightly longer time-scale around re-election consideration

But in an indirect way, the general public, influenced through pressure groups, can influence government, and government can influence corporate responsibility through various direct (legislative) and indirect (exhortative) measures.

For example, just over a month ago a Green Business Summit was hosted by the Government.

Executives from some of Britain’s biggest firms, with a combined total of 250 million customers, met at 10 Downing Street yesterday [11th Decemebr 2006] to work out a combined plan for a new range of “green” products, to be launched in the new year.

Companies such as Tesco, Marks & Spencer, HSBC, BSkyB, B&Q, O2 and The Carphone Warehouse have committed themselves to “accelerating the roll-out of practical, simple solutions” to help consumers reduce carbon emissions.

It would not be unreasonable to assume that such a meeting would accelerate the plans of participating organisations. In such ways, according to experts in transformational leadership, are self-seeking behaviours tempered with wider social considerations.


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