Case Study: Tesco
Tesco is a British multinational groceries and general merchandise retailer with headquarters in Hertfordshire, England, United Kingdom. It is the third-largest retailer in the world measured by gross revenues and ninth-largest retailer in the world measured by revenues.
The executive team for Tesco is based in Ireland, Asia and Europe with all functional team leads reporting to CEO, Dave Lewis. In 2018 Natasha Adams, CPO, attended Wavelength’s immersive learning study tour, USA 2018 (internal link) and in 2019 attended a bespoke ‘Silicon Valley Immersion’ with fifteen members of the Executive team.
Over the past five years, the Tesco leadership team orchestrated a spectacular turnaround, resulting in a 34% surge in profits. However, the retail landscape is still under intense pressure as consumer behaviours have changed, which has had a profound impact on the way in which people shop and eat. The result has been disruption and a new competitive landscape emerging that fulfils the demand for discounted products, voice technology-driven grocery deliveries, alongside the rise and rise of home-delivered, ready to eat food.
Mindful of these facts Tesco has been paying serious attention to how it innovates to remain relevant in this fast-paced, disruptive environment. How could they create the conditions needed to use innovation as their catalyst for growth?
Silicon Valley Immersion Trip
“As a leadership team and as an organisation as a whole, we had to ask ourselves some tough questions. How could we collectively open our minds to innovate in a different way and think about innovation in the longer term? We needed to understand and feed off the big disruptions happening globally and specifically within the retail market,” commented Natasha Adams, CPO.
“Having attended the Wavelength USA trip the year before, I saw very clear synergies of that experience and the experience we wanted to create in the Tesco Silicon Valley Immersion trip. It was an opportunity to do something bespoke to focus on strategically important key themes.”
The outcomes that Tesco was hoping for were around changing individual leaders’ frames of reference, mindset and expectation of innovation in their part of the business. They wanted to stimulate a collective disruption around what the business was doing and need to do to fulfil their strategy; remaining relevant and at the forefront of retail innovation.
“We wanted to answer the question: ‘how do we become an innovative business where innovation flourishes to the advantage of our customers?’ This trip was about getting the stimulus to start that journey,” comments Natasha.
The Silicon Valley Immersion trip was a world-class agenda of stimulus and encounters with the innovators, the disruptors and the enablers from across the valley, curated to be highly relevant to Tesco’s key strategic themes: food, loyalty, data, future of payments and AI. Hosts included Duncan Logan, founder and CEO of RocketSpace, an open innovation campus in the heart of San Francisco, Silicon Valley Bank, Salesforce, Grove Collaborative, Starship Technologies, Andreesen Horowitz, Mayfield and a curated event with other key Silicon Valley entrepreneurs.
Tesco Leaders’ Event - bringing Silicon Valley to London
In October 2019 Tesco ran its bi-annual two-day Leaders’ Event, bringing together 50 top global CEOs. Following the Executive Team’s experiences during the ‘Silicon Valley Immersion’ trip, Natasha was keen to involve elements of the programme in the Leaders event, with the aim of broadening the level of awareness for the need to innovate differently. To that end, she asked Wavelength to design a bespoke experience for the group which would recreate part of the Silicon Valley Immersion.
Wavelength proposed bringing one of the hosts from the ‘Silicon Valley Immersion’ trip, Duncan Logan, founder and CEO of RocketSpace to London. Duncan’s passion for helping tech start-ups has fuelled the success of more than 200 companies on the RocketSpace campus including Uber, Leap Motion, Snip.it, Podio, DOMO, and Beatport, making him an ideal candidate to fulfil ambitions for Tesco’s event.
The format of the RocketSpace session was that Duncan Logan would curate a set of 15 entrepreneurs from startups relevant to Tesco’s business. Each of the entrepreneurs pitched their business to Tesco and networked with them during the event. They helped Tesco leaders see their business from a different perspective and connections were made that have already had the desired impact.
Experience and results
For Natasha, the highlights of the Silicon Valley Immersion programme were in the breadth and diversity of content, along with the pace of the trip (which took place over three days) and quality of conversations.
“The openness and willingness of the host companies to engage with the Tesco group meant that the brief for the trip was 100% met. And the real highlight was that the trip stimulated the disruption conversation and challenge we wanted and needed to move forward with our strategic plans.”
Attending the USA 2018, Silicon Valley Immersion in 2019 and the subsequent Leaders’ Event has ignited change in Tesco:
- From the RocketSpace Intervention Tesco has formed a partnership with Dash Fruit Drinks. An entrepreneurial company making ethical drinks from misshaped fruit, thereby reducing food waste;
- A new role has been created – Group Innovation Director. This role reports directly to the CEO and has a small working team with 100% backing from the executive team.
Smaller outcomes, but no less important, are that the executive team now have a different perspective, connecting with entrepreneurs and they have built and continue to build new strategic partnerships.