From a leadership crisis to advancing on a 10-year-vision

From a leadership crisis to advancing on a 10-year-vision

Doubling down on diversity and inclusivity is high on the agenda for The Co-op CEO Steve Murrells. So how does he plan to build leadership within the organisation to reach those goals?

By MaryLou Costa

“How do we make a greater and deeper impact on our communities?” asked Steve Murrells, CEO of The Co-op in January 2020, when he released the UK’s largest convenience retailer’s vision for the next 10 years, under the banner ‘Co-operating for a fairer world’.

The answer? To make The Co-op’s business across food, legal services, insurance and funerals even more commercially successful than it is today, to build on the business’s track record for social action, including supporting local causes, launching its network of Co-op Academy schools, and campaigning against racism.

18 months on, Murrells says that the global pandemic has put this vision “on steroids”, requiring both a specific company culture and leadership calibre to navigate the post-pandemic social and business landscape, alongside the often uneasy balance of making money and doing good at the same time.

“We’re now going into a new phase of leadership, working on what we think we’re going to be needing in the future, given five years of development has happened in one year,” Murrells reveals.

Identifying – and rectifying – a leadership crisis

It’s a continuation of the leadership analysis he’s undertaken since he was promoted from CEO of The Co-op Retail to that of the whole group in 2017, in what was a less stable and prosperous time for the business, following the departure of both its incumbent Chairman and CEO within just months of each other.

“My early insights brought about our own crisis – that we clearly didn’t have the talent of leadership that we needed,” Murrells recalls.

“There was a very comforting feeling that people had worked for The Co-op for many years, you know, 20 to 30 years. But the result was that there wasn’t any new thinking, new ways of working, of more agility and skill development, flowing through the veins of The Co-op. So we had to get the right talent in to step change our capability.”

Further profiling and reworking of The Co-op’s leadership attributes, in partnership with The Chemistry Group, come at a time when companies are having to step up more than they ever have before.

“In thinking about returning to the office, giving our colleagues a real voice to tell us what they want to do is so important and sets a new drumbeat of leadership in the organisation,” Murrells states.

“That leadership framework is very much based on the ways of ‘being Co-op’ – the importance of how you do things, the behaviours that you apply when managing and leading a function that are set out within our vision and purpose. Where we’re trying to balance being commercially successful and doing social good, that requires a certain leadership skill.”

The truth behind that culture cliche

That’s where the importance of culture plays out. Murrells subscribes to the “culture eats strategy for breakfast” philosophy, coined by management consultant Peter Drucker to make the point that a powerful and empowering culture is a surer route to success than any carefully laid out strategy, which is more likely to go off course.

“Having had 15 years in senior roles in Tesco and then 10 years in management roles in Sainsbury’s, the culture is so different. And therefore, the cultural fit, and the way people go about leading their colleagues, is critical. Because we are trying to balance being commercially successful and putting back social value, in the belief that doing good is good for business,” says Murrells.

“It’s the sense of putting something back that you feel through the veins of the organisation, and not because it’s expected, because it’s in people’s DNA.”

Detecting that DNA is where Chemistry’s psychometric and behavioural testing comes in, enabling The Co-op to identify people not just with that social energy, but bring in new skills and experiences to make it a place they’ll thrive.

“The Chemistry profiling makes sure that our strike rate is at an all-time high. Occasionally, we’ll still get some things wrong, but it’s hugely valuable when you bring people in from outside, and equally valuable when you’re looking to build your talent from within,” says Murrells.

“One of the common threads that we’ve seen through Chemistry is that we do like a crisis – where there is a fire, the senior team run towards it rather than run the other way. I think what’s important to understand through the data is the makeup of our leaders, how resilient they are, and how we can build psychological safe spaces for them. And the Chemistry profiling has made a real difference for us.”

Reflecting diversity from within

This puts The Co-op in a strong position to move forward with Chemistry on developing and attractive inclusive leadership and internal structures, to become a place where both employees and customers from diverse groups feel represented, and at home.

For example, the organisation’s race manifesto, which Murrells describes as “bold” thanks to its “tough targets”, which include doubling the representation of Black, Asian, and minority ethnic leaders and managers across the business by the end of 2022 – moving from 3% to 6%, and then to 10% by 2025.

“I’ve always felt that if we’re going to be a reflection of society, then throughout the organisation we must have a far more diverse workforce. Race is very much a focal point, but for us, it’s inclusion in the round,” he says.

“As leaders, you have to actively listen to the issues, to build your awareness and understanding to then go and do the right thing by putting in place programmes, but in the knowledge that it’s not just a tick box – these things have to be sustainable. With such a focus on inclusion, everything is centred on more rounded, more dynamic leaders that are able to adapt to run commercially successful businesses, but equally to behave in the right way. ”

This involves trialling various modules and workshops on areas like people’s understanding of colour, the way they act and work together, the things that need to change as a business, as well as how it recruits both internally and externally, Murrells adds.

“Everybody has it hardwired into their objectives, which is really important to galvanise real momentum. But it does take time, making sure that we now go and recruit in places that enables us to gain access to this talent,” he says.

“And before you start to really go and seek to find these people, you’ve got to make sure that your ways of working in your infrastructure works for their needs. We’ve spent the last couple of years putting just those processes in place.

“We have a think tank, which is made up of some of the best minds and the strongest activists in this space, like Ruth Hunt, previously CEO of Stonewall, psychologist John Amaeche, activist Simon Wooley, and the UK’s Chief Youth Officer Jack Parsons. These people very much are helping shape our thinking. So everywhere we look, there are programmes and work and task forces going on.”

Delivering on the gender and climate agendas

The inclusivity strategy is working so far, to an extent, if the company’s gender progress is anything to go by. Murrells is the lone male on an executive leadership team otherwise made up of women – Chief People and Services Officer Helen Webb, CFO and CEO of Life Services Shirine Koury-Haq, CEO of Food Jo Whitefield, and General Counsel Helen Grantham.

“They’re all there because they’re the best at their job,” Murrells appraises. “And then when I look through the next layer of management, over a third of our senior leaders are women. So we’ve got some good things we can lean on around gender.”

Murrells is also proud of The Co-op’s standing in the business community, sharing learnings and setting the direction in his role as chair of the British Retail Consortium’s Climate Action Roadmap.

“Climate change is an example of an area where The Co-op’s got a great heritage, but we can’t do everything ourselves. But actually, the wider purpose for a co-operative is to encourage all businesses to do the right thing, to operate in the right way to give something back. It’s got to the point where even a PLC CEO today is being asked, ‘What are you going to do for your community? As opposed to, ‘what returns are you going to provide for your shareholders?’” Murrells argues.

“Covid has forced businesses to recognise that they’ve got to put more back in than they take out – they can’t be profit centres in a community because localism is becoming so important again. You need leaders that understand that value creation and its importance, as for us, it goes beyond CSR – this is the way we do business.”

The first steps in a long journey

Murrells is conscious of how far there is still to go in terms of wider inclusivity covering areas like race and disability – but by working to hone the right quality of leadership, he’s confident The Co-op can live up to that 10 year vision.

“We know things aren’t going to be solved overnight,” he admits. “But we have achieved one of the best turnaround legacies of any organisation. And that’s been down to leadership and people wanting to put back in more than they take out.”

TAKEAWAYS

  • When Steve Murrells was appointed CEO of The Co-op in 2014, he identified a leadership crisis – and sought to rectify it by bringing in the right talent.
  • Detecting people with the right DNA and energy to fit The Co-op’s culture of social impact is where Chemistry’s psychometric and behavioural testing has proven valuable.
  • The Co-op is in a strong position now to move forward with Chemistry on building diversity and inclusivity. For example, the organisation’s race manifesto includes targets to double the representation of Black, Asian, and minority ethnic leaders and managers across the business by the end of 2022.
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