This week we held the 22nd Annual City Lecture with Sir Ian Cheshire, former Group CEO of Kingfisher and new Chairman of Debenhams plc. Previous speakers have included Sir Michael Perry, Sir Mark Weinberg, Rt Hon Lord Young, Sir Brian Pitman, Sir Martin Sorrell, Lord Stevenson, Baroness Hogg, Rt Hon Lord Heseltine and Sir Robin Saxby. It is customary to hold this in the City but this year for a change I decided to hold it in the Shard with magnificent views of the City and beyond to Canary Wharf. Warwick Business School has taken half of the 17th floor and we used its impressive lecture room.
Sir Ian Cheshire was appointed Group Chief Executive of Kingfisher plc from 2008 and left the group in early 2015. Prior to this he was Chief Executive of B&Q from 2005. His previous roles at Kingfisher from 1998 onwards include Chief Executive of International and Development, Chief Executive of e-Kingfisher and Group Director of Strategy and Development. Before Kingfisher he worked for a series of large and small retail businesses over 15 years including Sears plc, the owners of Selfridges.
He is Chairman of Debenhams plc, Senior Independent Director of Whitbread plc, Chairman of Menhaden plc an environmental investment trust and lead non-executive director for HM government. He is also Chairman of the Prince of Wales Corporate Leaders Group on Climate Change and President of the Business Disability Forum President’s Group. Sir Ian has served as Chairman of the British Retail Consortium.
Sir Ian was knighted in the 2014 New Year Honours for services to Business, Sustainability and the Environment and is a Chevalier of the Ordre National du Merite of France.
I had asked Sir Ian to address my theme, Marketing for Good is Good Marketing and specifically the Purpose of Business and what role marketing plays in delivering that. As CEO of B&Q Sir Ian had been one of the pioneers in developing a strategy for sustainability. They had also identified a key sense of purpose. Their customers bought their products to improve their homes and gardens and so increase the quality of their lives. They did not claim that this was transformative but it was incremental and could be significant. Thus products that they developed and sold had to contribute to that sense of purpose.
But then they came to realise that they were dealing in finite resources and needed to consider the sustainability of the business long term. The group grew strongly internationally and was such a consumer of wood products in garden furniture and various home improvement products that it needed forests the size of Switzerland on an annual basis. They committed to ensure that they only procured from renewable resources and this took Herculean efforts.
But once secure they could talk openly about this and it became a strong point of difference in the market. However, Sir Ian told us that this did not mean they could charge a premium for this. The consumer appreciated it but was not willing to pay more. So they had to be even more dedicated to ensuring that they were both buying from renewable resources and at the same time competitive.
The role of marketing in this was key. Sir Ian described the marketing department as the Agents Provocateurs or the Agents of Change in the business. They brought the new ideas and drove them through the company. They brought the voice of the consumer to the board room. Marketing should set a bold ambition for the business and innovate to deliver greater value.
Understanding your customers seems like a cliché but you can see when organisations are so close to them that they are able to talk to them in a way that engages them and creates the engine for the business.
It’s vital that a strong marketing voice is heard around the top table, because otherwise the machine takes over. Really good marketing keeps the customer at the table alongside the rest of the board. Sir Ian said that when he has seen that work well it has been transformative. In a world where the customer is constantly changing the question and the rate of change is increasing, organisations find that hard to cope with. If there isn’t a lead from the marketing team, most organisations prefer staying in the comfort zone and repeating what they have done, and they tend to find out that it is irrelevant when it is too late.
Sir Ian referred to the scandals in the banking sector and the automotive industry and used them as examples of businesses that had lost their purpose. When it becomes just making money for shareholders and/or the bosses then business has lost its way. I asked him if this had led to a loss of trust by ordinary people in all business and that in turn might lead to a crisis in the whole capitalist system. Sir Ian did think it was more specific and that there were some badly run businesses and some well-run businesses and generally the public could tell the difference. In terms of trust business still comes higher than estate agents, journalists and politicians. Indeed, when people are asked if they trust the banks you get a low score but if they’re asked if they trust the staff who work in their local bank branch you get a very high score.
Sir Ian then answered a wide range of questions from the floor. He had spoken entirely without notes and answered the questions without hesitation and with supreme articulacy. Afterwards we had canapés and wine and continued to debate the issues with vigour and fellowship. The audience consisted of members and their guests, visiting Masters from ten other Livery Companies, Senior Members of the Chartered Institute of Marketing and a group of students and their lecturers that I had invited from the Peter Jones Academy at Westminster Kingsway College. All enjoyed the lecture, the discussion and the great views.
And I thought that if just a few of the students were inspired to take up a career in marketing it was all worth while.