MARK & SPENCER Strategy Insight
At the Marks & Spencer AGM, on the 11th July 2001, Luc Vandevelde, the Chairman and Chief Executive of Marks & Spencer, gave a key speech regarding the managements recovery plan for the company, which was launched earlier in the year. The speech and extracts from Marks & Spencer Press Releases, presented below, provide a valuable insight into the nature of strategic planning within large organisations, and the role of the Chairman and Chief Executive in this process.
Extracts from the Speech
‘Good morning. Welcome to the 2001 Annual General Meeting. I want to pick up exactly where we left off a year ago. In response to the very last question from the floor at the 2000 AGM, I made this statement: ‘I am taking charge and I will create shareholder value in the future.’
I’d like you to keep that statement in mind. In everything we have done or are planning to do for your Company, we share with you the common objective of increasing the value of your investment by returning Marks & Spencer to its rightful, leading position in the marketplace.
As to ‘taking charge,’ at the last AGM I’d been with Marks ; Spencer for less than five months – and I didn’t take over as Chief Executive until two months after the AGM in September 2000.
At that point, a little over six months in, I came to certain conclusions about the Company’s strategy … and it took six months because Marks ; Spencer is a very unique and very complex company.
My conclusion was that the recovery plan, then in place, was doing a lot of useful things … getting us closer to our customers, improving our supply chain, and so on. But it still wasn’t good enough to address the real problems of the Company which, as I’ve already admitted, were more serious than I realised when I first took up this post.
The previous plan was like feeding a tree that was already overgrown and unhealthy. What it really needed was serious pruning back. It had unproductive limbs that were hampering its growth and a lot of its best characteristics were lost in the foliage.
It became clear that for M;S to grow productively, we had to get back to its core strengths – to those fundamentals that underpinned its success in the past – and begin our recovery from there.’
Putting together the right team
‘Having reached this conclusion, my next step was to appoint a new team.
Peter Salsbury, as you know, resigned last September, having reached the conclusion that he was not the right person to take this Company forward. Not withstanding, I believe he did valuable service for Marks ; Spencer. He inherited a difficult task and had the courage to take some tough but necessary decisions.
Along with Peter, I’d like to thank the five other directors who’ve left the Board in the past year. We also say goodbye today to three of our Non-Executive Directors – Michael Perry, Ralph Robins and David Sieff. David spent his entire career at Marks ; Spencer, 25 years as an Executive Director. My thanks go to Michael, Ralph and David for their tremendous contributions over the years.
This is perhaps also an appropriate moment to pay tribute to David’s father, Lord Sieff, our Honorary President, who died in February. When I speak of returning to fundamentals, I’m referring in many ways to the values that he and the founding families instilled into this Company. The heritage of our founders remains profoundly influential in shaping our future and we should be grateful to them.
Apart from Robert Colvill, Alan McWalter and myself, it’s now a completely new Executive Board to the one you met a year ago. So let me introduce them David Norgrove, Roger Holmes and Alison Reed. I’d also like to welcome the two Non-Executives who’ve joined us since the last AGM Kevin Lomax and Tony Ball.
So what we have is a virtually new team — because we had to accept that only a new team could take the radical measures needed to turn the Company round. Since we last met, we’ve effectively rebuilt Marks ; Spencer’s management. Central to this is the Board of UK Retail where