Admiring glances: what it takes to be an admired company

Tesco has won the title of Britain’s Most Admired Company, topping a list of 220 of the UK’s largest companies. This result was hardly jaw-dropping – the supermarket is the UK’s largest private-sector employer and accounts for £1 in every seven that is spent in UK stores. But was it pure commercial power that bagged Tesco this title?

According to Nottingham Business School, which decided the judging criteria, being ‘most admired’ depends on nine key measures. These are:

  • quality of management;

  • financial soundness;

  • quality of goods and services;

  • ability to attract, develop and retain top talent;

  • value as a long-term investment;

  • capacity to innovate;

  • quality of marketing;

  • community and environmental responsibility;

  • use of corporate assets.

The results of the awards, which were organised by Mercer HR Consulting and Management Today, were based on peer group and City analyst evaluations against these criteria, with the most admired organisations scoring highly across all categories.

But is it the person driving these strategies that is the real differentiator? When Personnel Today asked Sir Terry Leahy, Tesco’s chief executive, what it was that earned Tesco its win, there was no hesitation in saying it was down to the workforce. “More than 360,000 staff around the world work so hard to deliver a great shopping trip for our customers and every one of them, from Budapest to Birmingham, should be proud of the fantastic job they do,” he said.

Bar operator Mitchells & Butlers surged 56 places to ninth position – this year’s biggest climber. When contemplating what contributed to this success, its chief executive Tim Clarke acknowledged the benefits of having the company’s HR and business strategies fully aligned.

He also said that Mitchells & Butlers, which employs 37,000 people, recognises it must have well-trained, highly capable and motivated employees if it is to sustain its business success. “This result reflects the hard work and commitment from everyone at Mitchells & Butlers,” Clarke said.

BP, which was beaten into second place by Tesco, was less willing to reveal its winning strategy or the part HR played in it. “It is for others to judge why we have been selected. These types of awards are almost weekly now and we’re close to being in the top three every time. We’re just getting on with our business,” said BP’s spokesman Toby O’Done.

However, David Conroy, principal at Mercer HR Consulting, said the criteria used for these awards highlights that the right HR strategy – with a focus on employee engagement – is fundamental to a company’s success.

“The most admired businesses make sure decisions are connected to people issues and understand the impact people can make,” he said. “Employee satisfaction leads to customer satisfaction, which in turn improves bottom-line results. Firms that are business-orientated understand how important it is that employees are engaged.”

Other high performers were Cadburys Schweppes, who claimed overall third place. Unilever polled fourth overall, but scored highest in the category ‘ability to attract, develop and retain top talent’.


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