I was trundling along in the car the other day, wondering if I’d get to York before the next apocalyptic snowstorm, when Desert Island Discs came on the radio. I sighed; another opera singer I’d never heard of…
Actually, no. It was Sir Terry Leahy, the man who started off stacking shelves and then built Tesco into the global retailing giant it is today. A businessman and entrepreneur who I’d always admired. In fact, someone I’d admired more than entrepreneurs like Richard Branson and Alan Sugar – because coming from a corporate background I understood how difficult it must have been for Leahy to stamp his mark on what was essentially someone else’s company.
Suddenly my journey didn’t seem so pressing. In fact my appointment started as Leahy finished. Perfect. 45 minutes with one of my business heroes.
Three-quarters of an hour later I – like I suspect virtually everyone else who heard the interview – had lost a lot of respect for Leahy. PR disaster? You could say. I suspect the present board of Tesco were a long way from pleased.
There were two points that I picked up on. The first was when Terry Leahy said he tried to ban Waitrose products from the family home and “bribed my children to … inform on my wife Alison if she popped into Waitrose when she picked up the kids from school.” What? I’ve been wrestling with the concept of paying Dan and Rory to spy on Dav ever since, and still can’t think of an instance when it would be even remotely justified.
But the comment that really worried me was Terry Leahy’s casual acceptance of the damage supermarkets have done to our high streets. He described it as ‘progress.’ I’m all for competition – and of course people are free to shop wherever they want – but there’s a part of me that thinks it’s slightly wrong when I’m in a small market town, walk down the high street and see bookies/pound shop/charity shop/bookies/boarded up/bank/pound shop/boarded up…
And there my grumble might end, were it not for the wider implications the High Street has for all businesses. In the last couple of months we’ve seen the disappearance of Comet, Jessops, Blockbuster and a large slice of HMV. All of them have fallen victim to online competition – and at a time when the national high street is struggling, Amazon had their best ever Christmas and are now sitting on a cash pile of $12.4bn.
I can only see that figure increasing – after all, Amazon are now making money out of products that don’t exist. Need more warehouse space? Need a distribution network? Not for an e-book you don’t.
It seems to me there’s a fairly simple message: ‘If Amazon do what you do, you’re under threat.’
So are any of us safe? Well, if you make the nuts and bolts that hold bridges together, the answer (in the short term) is probably ‘yes.’ Despite the promise that we’ll soon be able to print a lot of products, makers of high tensile steel bolts can probably sleep easily tonight.
…Were it not for the threat from the Far East, Eastern Europe, Latin America, India and Africa. A recent report from the Boston Consulting Group highlighted the rise of what it termed, ‘Global Challenger Companies.’ These are the fast emerging companies in countries like Colombia, Chile, Egypt – plus India and China, of course – that are starting to threaten the established ‘first world’ giants. With far lower labour costs and far less red tape, companies in the developing world are going to be a danger to all UK manufacturers – and sooner rather than later.
Amazon on one flank, the emerging economies on the other: twin threats to your business that you have to watch. There’s an old saying: “Eternal vigilance is the price of liberty.” These days, eternal vigilance is also the price of staying in business.