Tesco CEO Sir Terry Leahy is widely credited with turning Tesco into an international retailing powerhouse and now his job is "almost complete." The final stage, as Sir Terry gets ready to retire from the company next March, is to turn the business over to Philip Clarke, who heads up Tesco's European and Asian operations.
"I wanted to develop a purpose and values that could sustain Tesco through its challenges and encourage and grow future leaders," said Sir Terry in a press release. "It has taken 14 years but that strategy has become a firm reality now and so I feel my work is almost complete."
Mr. Clarke said, "I am honored and delighted to succeed Terry who has taught me so much. I am very excited by the opportunity to lead such a fantastic team of executives, many of whom I've worked with for years. Together we will build a global business which focuses on the customer and fully respects our people, our communities, our supply chain and our shareholders."
Among the members of Mr. Clarke's team will be Tim Mason, who will become deputy CEO of Tesco plc. Mr. Mason will continue to be responsible for Fresh & Easy in the U.S. as well as "branding, corporate values and climate change."
David Potts has been named as the first chief executive of Tesco's Asian operations. He currently is retail and logistics director for the U.K. and the Republic of Ireland.
Commercial director Richard Brasher will take over in the newly-created position of CEO of Tesco's business in the U.K. He will also assume responsibility for the chain's business in Ireland.
Analysts expressed satisfaction with the choice of Mr. Clarke and also assessed Sir Terry's tenure with Tesco.
"Leahy is an outstanding executive who has intellect and vision that is second to none," Darren Shirley, an analyst with Shore Capital, told The Guardian. "I wouldn't call him Britain's greatest grocer, that accolade, to our minds, rests with the likes of Sir Kenneth Morrison and Lord John Sainsbury, but he must surely be written up as one of Britain's greatest businessmen."
James Grzinic, an analyst with Jefferies, told The Wall Street Journal, "Philip Clarke is a Tesco lifer who has been instrumental in spearheading international growth. We expect little change in strategic direction in coming years."
An unidentified former business associate of Mr. Clarke described him to the Financial Times. "He is a hard Scouser (someone from Liverpool), like Terry. He does not suffer fools gladly."
Discussion Questions: What is your assessment of how Tesco is handling the transition of power as Terry Leahy prepares to step down as the company's CEO? What lessons in succession planning can other retailers learn from the Tesco experience?