After the dismissal of Tesco's CEO, Dave Lewis from Unilever was brought in – what will this mean for the company?
We take a look at what Dave Lewis did at Unilever and what makes him a good fit for Tesco, while uncovering some of the challenges facing recruiters and companies in the retail sector, both at top and bottom level.
Tesco chairman, Richard Broadbent, announced the appointment of Dave Lewis as Chief Executive from 1 October 2014. Dave Lewis joined Unilever early on in his career and has been there ever since, accumulating skills and experience that caught the attention of supermarket giant Tesco.
Poaching at higher levels is a significant challenge in recruiting and in recent years it happens more and more, given the transparent and open communication channels of the Internet. At the lower level of retail, recruitment faces the challenge of retention, as a sector that often attracts ‘part-timer’s’, facing a relatively high turn over.
Lewis and Unilever
Lewis joined Unilever in 1987, as a trainee for Lever Brothers. In his first 9 years he took on a variety of marketing and customer management roles, both in the UK and Europe, and then became Marketing Operations manager in 1993.
In 1996, he moved to South America with the position of Managing Director of the River Plate region, consisting of Argentina, Uruguay and Paraguay.
Lewis then relocated to Indonesia in 1999, to be regional innovation leader for personal care in South East Asia and Managing Director of Unilever Indonesia’s personal care business.
Business conditions were tough at the time, due to unstable political conditions and hyperinflation; however, Lewis managed to see the business through with an average of 30 per cent growth per year.
While gaining invaluable international work experience at Unilever, Lewis also expanded his skill set through academic training, completing the Advanced Management Programme at Harvard.
After three years as Senior Vice president for Home and Personal Care, Central and Eastern Europe, he returned home to the UK in 2005, serving as Managing director of the UK home and personal care business.
Lewis then became Chairman for Ireland and UK in 2007, then onto Unilever Executive as President for the Americas in 2010, preceding the One Unilever programme, when Unilver consolidated its three spate companies - foods, home and personal care and ice cream - into a single business.
Finally in 2011, after a reorganization of the Unilever Leadership Executive team, he became Global President of the Personal Care business, a £15.8 billion Unilever division.
“Drastic Dave” is the nickname given to Lewis, according to The Guardian, which he earned after giving 300 employees the boot at Unilever in 2007. He is also known for being the man behind the successful launch of Dove in the UK.
Lewis was regarded as potential successor to Paul Polman as CEO at Unilever. In a report in The Economic Times, Tesco said Lewis has been responsible for numerous turnarounds in Unilever and has taken on numerous leadership positions in pivotal areas worldwide.
The Right Fit
Polman, Lewis’s boss at Unilever said Lewis faces a “big challenge” as the new CEO of Tesco, according to The Telegraph. His former boss said he is “very happy” for the Lewis, and did not want to prevent him from leaving, “it is very hard to say don’t take this wonderful opportunity.”
After so many years at one company, there are questions as to whether he can transfer his skills to the faster moving and locally focused business of Tesco’s supermarkets.
Veteran retail analyst Nick Bubb says, “Lewis knows nothing about retailing, but maybe that doesn't matter, because as a leading supplier he certainly knows how to win price wars and perhaps that is the big issue now facing Tesco in the UK."
"Coming into retail from consumer goods is a massive change because the pace is so much faster and Tesco is just an enormous company. No matter how good he is, it is going to be an extraordinary learning curve," says another retail veteran.
Chris Wickham, Consumer Goods Analyst at Oriel Securities, has said, “He has really brought the business onto the world stage fighting against some big competitors. He's led several acquisitions and got them really well integrated into the business so that Unilever can now look the likes of L'Oreal and P&G in the face on hair care.”
Executive Recruitment Challenges – the Dangers of Poaching
Poaching of experienced managers is a problem facing many big companies. According to The Telegraph corporations such as General Electric, Procter & Gamble, and McKinsey are becoming vulnerable to poaching as recruitment advisors and rival companies look around their grounds for potential talent to fill their senior roles.
The histories of executives at these companies already read like so many intertwined royal pedigrees. In 2012, the head of global strategy at Unilever, Mark Tarchetti, become part of the team at Newell Rubbermaid, the maker of plastic food containers. The chief executive at Newell is Michael Polk, also from Unilever.
Peter Boone left Unilever to join chocolate marker Barry Callebaut, leading the company’s research and development. Patrick Cescau, who was Unilever’s chief executive before Polman, is now the chairman of InterContinental Hotels group and the senior independent director at Tesco.
According to The Guardian, insiders say Lewis is close to Cescau, who championed him for the role.
Regardless, Unilever has a deep management pool, evidenced by the internal replacement of Lewis with Alan Jope, who has been moved from president of Unilever’s operations in Russia, Africa, the Middle East and Turkey and is now head of personal care.
Polman said, “You have to expect when you have a management team that there will be rotation,” and regards the ease of filling the gap left by Lewis as a “testimony to the management team.” Unilever’s talent base has been targeted because of its size, the quality of training, and the success of the company in the last ten years.
Unilever has “spent a lot on expanding talent” says Polman.
The Retention Challenge at Lower Levels in the Retail Sector
In terms of the lower levels, supermarkets tend to have a high turnover of staff. Career Builder says retention is one of the primary challenges in retail employment. Turnover is important because retaining employees for a longer period of time reduces costs for employers and affects their competitiveness.
Training is one of the reasons losing good employees costs money. Training is only worth the investment if the employee stays around long enough to make a return on it.
The challenge when it comes to training is that it’s essential to employee satisfaction and therefore retention, which means if a company tries to get out of training, it increases the chances of high turn around, but if they do invest in training they run the risk of losing money if the employee leaves shortly after.
Lower level retail employees usually do intend on sticking around for long. Retail employment provides relatively low pay, which is accepted in return for flexible hours and benefits. This means the prospective employee is not really looking for a long-lasting career, rather something to fill the gap.
These include students, retirees and mothers, or people who are ‘between jobs.’
To make the most of this situation, it is important that supermarkets recruit beyond these demographics when possible, find people who are passionate about retail and customer service and are interested in career growth opportunities.
Career builder notes the criteria that valuable employees see in the work and it’s these factors that supermarkets should focus on for when advertising positions and recruiting. These include:
- Career growth
- Learning and development
- Exciting, meaningful and challenging work
- Making a difference
- Meeting people and being part of a team
- Having a boss they respect and can learn from
- Receiving recognition for work well done
- Having a sense of autonomy and control over their own work
Potential candidates may also not see the opportunities outside of the customer and sales facing roles, while positions in management, security, loss prevention, and facilities management make up two thirds of retail employment.
These challenges for recruitment in the retail sector, both at top and bottom level mean recruitment agencies and companies should ensure they are aware of and satisfying their current and potential employees needs and wants.
Employees who stay at one company for their entire career are a mainstay of the past, even at management level. Lewis’ movement testifies to this: he had a long, dense history with Unilever, and gained challenging experience that has made him a valuable asset to Tesco.
Recruitment agencies and companies need to understand these changes and ensure they are aware of and satisfying employee needs, both at top and bottom level.