Assessment Of Iceland Foods Ltd Management Essay

In our initial meeting we appointed a leader and set up a regular weekly meeting to ensure that we progressed. Within a few days we identified Iceland Foods as our chosen organization. Given the challenge of working physically in the same place we set up a Linked in Group to post data and to remain in contact. This enabled us to post comments, provide feedback and raise suggestions. We were also able to post surveys to temperature check the team on how they were feeling as the project progressed.

Being conscious of the diversity of the team we undertook a rapid personality test based on Jung/Myers Briggs to facilitate discussion on personal styles and to act as an introduction to tem members.

We agreed to split our team into three groups of two each addressing a specific area – Leadership, Organization and Culture.

Our approach to the project involved a focused data gather using media, Newspapers, Internet etc. We were fortunate that Iceland recently won the Sunday Times Best company to work for and has a very visible CEO, Malcolm Walker so media and online information was readily available.

We reached out to the People Director within Iceland also but received no response. Fortunately we were able to gain sufficient data points to paint a valid perspective of their culture and leadership from internal communications and to balance this with media and Industrial tribunal date to counter balance the Iceland promoted perspective.

Each team undertook to work in pairs focused on creating drafts of the document by close of play each Friday. This was collated and circulated to all team members so that we had a tangible document to review in our weekly session.

We approached the style of this document in a manner that provided a ‘semi-journalistic style’ with the key criteria:

Keep it Simple

Base it on facts

Provide a balanced perspective

Assess academic perspectives

Provide referencing for all academic and public domain information

We also sought to use tools where possible to help us achieve these goals.

Referencing tool: Mendeley.com

Flesch Kincaid Measure: Grade 12. We need to be aiming for better than this (simpler is better)

Iceland Why we selected and an overview of history and key facts

For this report we have decided to study the frozen food retailer Iceland. We aim to gain a detailed understanding of how the company operates, the relationship with their staff and the role of their leadership with specific focus on the influence of company founder Malcolm Walker. There were several factors, which caused us to use Iceland for this study. Firstly the fact that Iceland won the Sunday Times award for best big company to work for and consistently achieves high levels of employee satisfaction makes it an interesting case study. Also the role of Malcolm Walker who has become something of a cult figure to Iceland employees also interested us. As well as this the fact that Iceland is a somewhat local company, based in Flintshire, North Wales with a branch in Bangor further influenced us to choose this company.

Iceland is a company with an interesting history beginning in 1970 when Malcolm Walker, at the time a trainee manager at a Woolworth’s store decided to open a store with a friend specializing in selling loose frozen food with as little as £60 as a start-up fund. By 1975 the company had 15 Stores in North Wales and by 1978 they had started developing their own brands. At the end of the 1980s Iceland had become a truly national chain with 465 stores in 1986. Towards the mid 1990s Iceland began to feel the pressure from the competition and changing environment, for example supermarkets being allowed to operate on Sundays created difficulty for the company. In 1996 Malcolm Walker and his team staged a successful resurgence, introducing the first free home delivery service. However by 2001 the company had entered what they call ‘The Dark Ages’ when it was revealed the company had suffered £120 million losses and subsequently Malcolm Walker and many senior managers were forced to leave the company. During this period from 2001-2005 Iceland endured a steady decline in profits due to what they claim were failed tactics by the new management. Malcolm Walker returned to the company in 2005 and pursued a strategy of simplifying; an important part of this strategy was introducing round sum prices to make it easier for customers to plan a budget. In the following years Iceland have gone to what they describe as ‘success to success’ reporting profits of almost £100 million in 2007 and winning awards for their products and leadership.

Iceland put a great deal of effort into satisfying its employees, the fact that it won the Sunday Times award for best big company to work and the fact that they receive impressive statistics of employee satisfaction for shows that they have been largely successful in this regard. The company’s website includes extensive testimonials from employees about the benefits of working for Iceland, the phrase ‘feels like family’ is frequently used to describe their attitudes towards their employees. The Sunday Times praised Malcolm Walker’s style of encouraging employees to push boundaries by considering any suggestions, creating a workforce who felt more involved with the company. However Iceland has not avoided controversy with regard to the way it treats its employees. Despite claiming to ‘have something for everyone’ in terms of employment, the company came under fire in 2011 for refusing a job to a woman for having a tattoo on her hand. More seriously a woman who suffered from debilitating panic attacks took Iceland to court for dismissing her in an unfair way. While these may appear to be isolated incidents our report will investigate them fully to see what they reveal about Iceland’s organizational behavior.

UK locations :  National

UK sites :  749

Sector :  Retail

Definition :  Frozen Food Retailer

Founded :  1970

Staff Turnover :  22%

Staff :  23239

Average Age :  33

Male : Female :  43% / 57%

Earning £35,000+ :  2%

Source:

5 -Leadership

It is often cited (Where?) that leadership is a role model for organizational behavior and culture, that this cascades from the top down and that the ultimate tone for the organization is therefore set by it’s chief executive and the board.

The role of executive leadership is to define a strategic direction and to steer the organization towards that goal. The delivery of this vision is cascaded through organizational structure and governance. The culture of an organization is less tangible to define but is sill set by leaders and cascaded through example, experience, war stories, legends and symbols. (Source).

There is a consideration of strategy being the desired future state delivered through departmental and individual goals and targets (Things we do) balanced by the culture, way of working, environment (How we do things).

“If you’re disgruntled, resentful or pissed off , we don’t want you. Go and work for Tesco.”

The Cult of Malc. Malcolm Walker as the Chief Executive of Iceland presents a classic comparison with Steve Jobs (The Cult of Mac). A leader whose personal history and success is tied with that of the organization he pioneered. The similarity with Jobs in terms of his personal dynamic and drive, his style of leadership and influence over the culture of the organization together with his ousting and subsequent return (referred to as ‘The lost years’ in Iceland anthology). The two share personality traits that are hauntingly familiar: Dynamic, leading from the front, driven, demanding and unforgiving.

Nick Servini

BBC Wales business correspondent

It’s difficult to think of many major companies which have such a close connection to one individual. He started Iceland thanks to a £30 investment in a store in Oswestry in Shropshire and took advantage of the rise in the popularity of frozen food in the 1970s and 1980s to build the business. Things took a dramatic turn in 2001 when he was sacked by the company and investigated by the Serious Fraud Office for selling shares before a profits warning. But after being cleared, he was brought back to rescue Iceland after it hit problems and the share price fell to 25p. He took it back to basics by cutting product lines and shedding 400 staff at the company HQ in Flintshire. It worked, and Iceland is now a successful performer on the British high street and Wales’ biggest retailer.

BBC 9th March 2012

“We don’t have to have ‘fun’ written down on a piece of plastic card; everyone knows it. We have our own unique culture, we always have had. Our board meetings have never been formal affairs. They don’t start on time, we’ll tell jokes or forget to send out the agenda. Business gets done in corridor meetings or in the pub.”

Malcolm Walker [Director publications 2012]

Walker describes the culture as ‘Fun’ , however it is arguably a culture of High performance rewarded by fun.

Taking a lead from GE’s Jack Welch, Walker stipulates a bottom 10% of performers exit policy. High performance is rewarded visibly not only as a reward but as a staff motivator. Taking 800 store managers to Florida as a reward for exceeding sales figures is a clear example meeting both objectives.

Another element worth noting is the philanthropic activities that also indicate personal self promotion. (Walker climbs Everest for Charity). Is this to promote the organization or feed the ego?

So, what is the downside to this? Again, similarities with Jobs emerge – colleagues hint at an aggressive style, unforgiving and demanding. Where high performance and failure are so visibly and rigorously managed the culture of Fun can easily morph into one of blame.

Blake and Mouton attitudinal Grid (1982) is of particular interest here. Is the ‘fun’ culture there to drive performance or to create a ‘great place to work’? Are they mutually exclusive and if not has Iceland achieved the right balance?

Team Leader/Teams

While it is clear that Iceland presents a lot of communication around Malcolm Walker as the driving force of the culture and Leadership, A truer indicator of leadership is likely to be more immediate. Most people associate leadership with their immediate manager and their behaviors and style.

There are many schools of thought around leadership styles, considering Daniel Goldman’s (HBR 2000) we see a range of leadership styles and capabilities that ultimately align with the concepts of the Hersey Blanchard Situational Leadership model (reference)

Consideration must be given to the style of management relative to the situation but also the environment. For example, operating at the Pacesetting level may prove more beneficial for a team within a retail store but would prove inappropriate at Head office in a buying department. Similarly adopting a commanding and then coaching approach for new joiners/problem employees may prove invaluable but will likely result in negative impact for experienced individuals.

Iceland has a stated aim of caring and maintaining a fun culture. The organization scores highly when employees are asked about strategic direction, senior management and are equally positive about the straight talking approach taken by immediate managers. This may well reflect an example of cultural cascade or may be a response to the environment likely to exist in the fast paced retail sector. A highly process driven/time constrained and repetitive set of work tasks that requires drive and immediate motivational skills.

What speaks strongly to the balance of people vs performance management is the level of stress employees indicate; some 87% of employees indicate that they are stressed working for the organization. Surely this can’t be the case in such a ‘fun’ company?

We need to find a couple of case studies to indicate leadership styles in the branch and at regional level.

To what extent are performance measures driving leaders to behave as task masters with a smile?

Clearly the incentives in pace for driving managers (Cars, Floridian conferences etc.) motivate the managers but is that at the expense of the ‘real’ workers at the tills and warehouses?

Another indicator could be the talent challenge for Iceland. Why does such a successful organization struggle to recruit at both the managerial and retail level? Is this purely an industry challenge or something more specific to Iceland? Nicolas’ referenced agency case study may play in here…