A Very Modern Leadership Handover

Jan 29 2014, 10:51pm CST | by

The announcement that Justin King is to step down as chief executive of the UK supermarket group J Sainsbury in the summer was hardly a shock. There had been speculation that King, who is credited with transforming the company in his decade at the helm, was preparing to leave. Indeed, given the immaculate planning that appears to have preceded the announcement it would have been more of a surprise if nothing of King’s intentions had leaked out in recent weeks.

Moira Benigson, CEO of The MBS Group, an executive search consultancy, has known King since he started his career and worked with him to build his team at Sainsbury’s. She recalls how at “one of my annual inspirational cups of tea” with Archie Norman, the former head of Asda, the rival supermarket chain where King cut his teeth, she was told that King was “the most articulate CEO” in the FTSE100 list of leading UK companies.

She adds: “Having known Justin since he was about 28, I have watched him become an exceptional leader who steered Sainsbury’s through the most challenging time in its history and he made it great again.  To have taken on that challenge and succeeded as a first-time CEO with a company so close to British people’s hearts for a decade is nothing short of extraordinary.”

There is intense speculation about what King might do next. Some believe he may be in line to run the Formula 1 motor racing business – partly on the basis that he is a keen fan as a result of his son being an aspirant driver. Others think that his assured public performances on current affairs television and elsewhere suggest a government role. Still others believe he might be tempted by the chance to turn around the fortunes of another retailer.

More important, for now, is what he has left behind. Certainly, Sainsbury’s is in a much better place now than it was when he took over. In the words of David Tyler, the company chairman with whom King has worked closely both on the turnaround and the succession planning, the company was “on its knees” 10 years ago. In a period that has seen intense competition in the UK supermarket sector he has transformed the business without losing sight of its middle-class credentials – leading it to 36 consecutive quarters of sales growth and, just recently, restoring it to second in its market, albeit still well behind the leader, Tesco.

Perhaps mindful of what has happened since Sir Terry Leahy stepped down as long-time head of Tesco, analysts and other observers have been wary of echoing Tyler’s claim that King would leave “a lasting legacy”. What is perhaps more certain is that the departure looks like a textbook case of a modern leadership handover.

Benigson says that King’s “most important legacy” is that he was never afraid to hire the best. “He hired his successor, Mike Coupe, and he has hired bench strength beneath that for the future, too,” she adds. Coupe, who was reportedly singled out as the heir-apparent about a year ago, has extensive experience in a variety of retailers as well as Sainsbury’s of the nitty-gritty aspects of running these businesses, and so helped the company become more effective.

Most of all, perhaps, King – influenced by his Asda days under Archie Norman and Allan Leighton – made Sainsbury’s more modern and accountable. There is a story that, soon after taking over in 2004, King asked where all the customer complaints were. He was told that they were handled by a team in the depths of the company’s headquarters. King’s reaction was to bring that team to work alongside him and to personally answer the letters received in his first six months.

Source: Forbes Business


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