Simon Susman
Simon Susman
Woolworths’ Good Business Journey
Values, especially quality, underpin everything Woolworths does, says the retail giant’s CEO Simon Susman.
And there must be value in values, because Woolworths is doing just fine in what is fast becoming a tough retail market. It has captured 15 percent of the South African clothing market and a nine percent share of its food market and currently enjoys a R21 billion annual turnover.
Susman believes in values, but he also believes in change. Speaking at the Rhodes Investec Business School’s (RIBS) business forum in February, Susman said that Woolworths in the United Kingdom had failed to reinvent itself and this was the reason it went into liquidation in January.
“The challenge is to keep your soul intact but to reinvent yourself at the same time.”
South Africa’s Woolworths is 77 years old and he attributes its growth to its “deep seated values” which he says will continue to drive the next 75 years. Its values included quality and style, service, innovation, integrity, energy and sustainability.
Susman says Woolworths had committed itself to a “good business journey” which contributed to economic growth but which takes into consideration the environment and biodiversity and which addressed issues of transformation, climate change and social development. He says this approach created a “virtuous circle” as opposed to bad business practices which resulted in a vicious circle where big business simply “raped the world” without regard to the consequences. This approach had resulted in a catastrophe of confidence.
To embed this “good business journey”, Susman said Woolworths had created one - five year targets across all of its business units. Their priorities included accelerating transformation, consideration of social development and communities, an environmental focus and addressing climate change.
In terms of transformation, Woolworths collaborated closely with its employees, franchises, suppliers and government. Already 57 percent of its managers were black, says Susman. In terms of social development Wooworths had many programmes in place involving food security in schools. Ironically, some of the 2400 schools, which had “plush food gardens” as a result of Woolworths’ interventions, sold food to “the competition”, said Susman wryly.
Their environmental focus emphasised water usage, biodiversity, animal welfare, free-range and a focus on reducing, recycling and re-using. Suppliers were encouraged to implement these foci as well.
He says it was becoming increasingly clear to farmers that for farms to remain sustainable they had to follow the organic route where soil is treated organically and spraying was reduced.
Susman said Woolworths’ “virtuous circle” approach had positive spinoffs for the business as well. “Running a business in terms of a virtuous rather than vicious circle often results in savings for us too.”
