Complexity Kills — Simplicity Liberates
As the 2000s drew to a close, one of the UK's largest multiple retailers, the 114 year old Halfords, appeared to be trudging through it’s own end-phase; maybe it would have another ten years, maybe the internet would kill it now but poor results and generally declining performance suggested the business had good cause for pessimism. Then nine profit warnings from 2010 to 2012 intimated the patient was possibly terminal.
Enter Matt Davies as new CEO.
Arriving from his first big retail role; successfully transforming Pets at Home from a quiet little specialist to a national profit powerhouse, the affable Mancunian quickly rallied the troops; he convinced the entire team that they had a place in the world, and invested in areas constantly cut by previous CEOs. Those areas of investment included such, at the time, unfashionable cost lines as staff numbers, wages, training and store fabric.
Above all, Davies has a knack for encapsulating his vision, the strategy and the actuality of delivering these things, in very simple terms and in really clear objectives. If you work for Davies, in any position from the shop floor through to the board and all points in between; you know what he wants you to do. Even better, you know exactly how he wants you to look after customers.
And wow did Matt Davies revive Halfords; setting out with a clear mission to deliver a £1bn in group revenue by Y/E 2016, Davies presented the business with a simple Big Idea as vision and supported it with an elegant purpose. The Big-Idea/vision: to help and inspire customers with their life on the move. They would support drivers of every car, inspire cyclists of every age and equip families for their leisure time away from home.
Here’s how this fits together:
- Halfords’ Big Idea was to “help and inspire customers with their life on the move”
- Their purpose was to support drivers, inspire cyclists and equip families for leisure
- Their mission was to deliver group sales in excess of £1bn by the end of financial year 2016
Some retail leaders would read all that back and declare it a load of old tosh — meaningless words where retail discipline was what was needed. But they would be so wrong. Look at those words: just take ‘support drivers’, that means something very real, which is to be ready in store to help diagnose, to advise, to fit. If a customer, a driver, asks for help with selecting the right battery, for example, then the assistant knows that’s the most important thing they should be doing at that moment. The manager knows it, their regional manager knows it. Everyone in the business knows it.
Now that, that is huge. That is the triumph of simplicity of vision over complexity of strategy.
Beyond this Big Idea and purpose, the strategy was further articulated as five programmes that would ‘get Halfords into gear for 2016’. And again the whole thing is supported by seven values that anchor this customer-centric, optimistic and human strategy.
Halfords’ group sales were £865m in 2012. Davies aimed to hit a billion in four years. It only took him and the team three: Halfords delivered a whopping £1bn by Y/E 2015, and did so on massively improved profitability and with significant like-for-like growth proving that the success was in the changed customer experience rather than estate growth or accountancy weaves.
Tesco poached Davies in May of 2015 to operate as CEO for their UK and Ireland stores. By Christmas 2016, the national basket case that was Tesco was already beginning to post encouraging and positive improvements. At a speech for Retail Week Live in June 2016, Davies explained that he had asked his team one key question on joining “How do we turn Tesco from a company that runs shops, to a company that serves people?” those positive green shoots that began to sprout just six months after he joined suggest Davies has found some answers.
And what of Halfords in the year since Davies moved on? New CEO, new approaches, that’s fair enough. Davies’ replacement, Jill McDonald has dismantled the strategy illustrated here, though McDonald might describe it as having ‘moved it on’ or ‘finessed’ it. Tellingly, the new strategy is explained on Halfords plc’s investor site in page after page of detail without a graphic to be seen.
Year end 2016, Halfords’ reported sales have shrunk by 0.9%. To be fair to Jill McDonald, it’s too early to see her long-term impact and I wish her the very best but I already miss the clarity of Matt Davies’ Halfords vision.
Complexity kills — Simplicity liberates.
