The events of yesterday, when the Coles board, faced with no real alternative, recommended acceptance of a slightly sweetened offer from Wesfarmers signals more than a dawn of the new Coles.
Shares in Coles and WES had been in a trading halt from the start of the day, but exploded out of the blocks when trading resumed. Coles jumped from an overnight $14.24, rising almost 7% to $15.19 shortly after trading resumed, before settling back.
The Coles board, after considering all their options (meaning this one and this one only) came to the unanimous belief that this outcome is in the best interests of all concerned.
Once Wesfarmers get the keys in late November, a new phase can commence. The old highly political, risk averse, unresponsive command and control Coles will start to wilt under the new leadership.
Employee engagement is a new buzzword. Some organisations attempt to achieve engagement with extrinsic rewards such as dollars and many measure only job outputs.
Better organisations know that for many people, the intrinsic rewards around the pleasure of doing the job well, and being part of a team achieving shared and understood are powerful motivators. This clarity of purpose, coupled with the tools and training to do the job are powerful drivers of performance. These drivers have been missing from Coles.
People who know little or nothing about retail or the science behind motivation of teams of people know that Bunnings is a different shopping experience. They feel it in tiny measures of eye contact, and in the alacrity and celerity of their contact with team members at Bunnings.
The business will also benefit from the improved communication that facilitates response to feedback from those closest to the customers. Team members know their input is heard and an important element of decision-making.
There are some very talented people at Coles who, if unshackled, can make a huge difference.
Wesfarmers will become Australia’s largest retailer. What is little discussed, but highly important, is that this giant Australian company will exhibit something approaching world’s best practice in leadership. It will not be a mechanistic hierarchy in which people and divisions operate in isolation with a focus on the internal politics and point scoring.
It has the potential to point to the way forward for industrial relations – away from the confrontational model that predicates so much of our distant and recent IR heritage.
Disclosures. My wife owns a small parcel of Coles shares and my company Orex has recruited more than 500 managers for Bunnings and recently some for Coles businesses.
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