Woolworths in leadership limbo

Woolworths, supermarket, wooliesIs there something seriously wrong at Woolworths?

Let’s have a look at recent times: Ralph Waters resigns as chairman after the announcement of shocking results and he is replaced by Gordon Cairns. At about the same time Grant O’Brien, MD and CEO, announces his resignation. But he doesn’t leave. He stays on while a replacement is found. And he takes a pay cut of $1.5 million – hardly motivating.

Meanwhile Alistair McGeorge, CEO of Big W, resigns amidst some controversy. Penny Winn is appointed caretaker while a replacement is being found.

How has this state of affairs been allowed to continue?

Let’s look at Woolworths first: a new Chairman, an ex MD/CEO still in the job after resigning in mid-June and having taken a pay cut.

What can this be doing to morale at Woolworths, especially among the senior executives? How long does it take to find a replacement for O’Brien?

Now Big W: McGeorge resigns over a month ago and Penny Winn is minding the shop.

Where is David Guise, director of human resources for Woolworths? Where is his succession plan? How long are he and Gordon Cairns going to allow two of the biggest brands to limp along in leadership limbo?

This is not the stuff of multi-million dollar public companies!

The shareholders have every right to be ropeable.

I was slammed a month or two ago when I suggested that Wesfarmers may be eyeing Woolworths. ASIC would never allow it and this is probably true – at the present time anyway. But it is inconceivable that Woolworths is not on the radar for takeover.

To aggravate matters they have abandoned the Cheap Cheap advertising campaign. How did Tony Phillips, chief of marketing, ever allow this campaign to see the light of day? One doesn’t need to be an expert in marketing to figure out that Woolworths cannot compete on price with the likes of Aldi. Their USP is value, quality and service.

Add to this conundrum the imminent arrival of Lidl.

Would you buy WOW now?

Comments

4 comments

  1. Avatar

    Michael Ratner posted on September 25, 2015

    The job is starting to look like a poisoned chalice. Having been a loyal Woolies shopper for over 25 years, it feels as if it's on life support. Coles seem to be listening while Woolies are floundering. Woolies need a new dictator with runs on the board who by the way tells the board to butt out .... They are likely to appoint Rip Van Winkle. reply

  2. Avatar

    Brett Stevenson posted on September 25, 2015

    I think you will find Stuart that Grant O'Brien has been staying on so that he becomes entitled to the very generous 'retirement' benefits that begin once he reaches a certain age/time of service as CEO, which I'm sure you will find will be closely related to his departure date. I think to suggest he has taken a pay cut is a bit misleading. It seems that the expression the 'old boys network' has lots of practical benefits. Just have a look at the CV's of all the directors to see what I mean. Where were the board on this matter? Was this part of the deal to get him ousted? As, you quite rightly ask just what is going on at Woolworths? It hardly needs for anyone to ask the same questions of the senior management Lets just remind ourselves who these board members are Gordon Cairns, Jillian Broadbent, Christine Cross, Carla (Jayne) Hrdlicka, Allan (David) MacKay, Scott Perkins, Michael Ullmer. And its worth noting the recently retired ones being Ralph Waters, Ian MacFarlane, Tom Pockett Just who and how do any of these people take responsibility? It seems they just retire or leave on very agreeable termination payouts and oftentimes to another pubic company where they are richly rewarded for their 'experience CV' but not necessarily for their competence etc. reply

  3. Avatar

    Stuart Bennie posted on September 25, 2015

    Thanks Michael and Brett. Yes - not a pretty picture. Perhaps one day Woolworths will actually respond to an article of this nature. It would be refreshing ! reply

  4. Avatar

    Brett Stevenson posted on September 25, 2015

    I wouldn't hold my breath on that one Stuart. I think a first starter for them would be to do what Coles did with Battleship Galactica (their glorious Head Office) in Melbourne years ago, and overhaul their Head Office at 1 Woolworths Way in Bella Vista in Sydney. What is so obvious to just ordinary consumers (take Myer as a classic example) seems to evade the Senior Managers and Board until a few years too late when they then employ outside consultants such as McKinseys to point out the obvious. Word on the street is that Woolworths have a special room(s) set aside at Head Office for such 'outside experts'. That says something pretty loud there eh? That says a lot about management eh? reply

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