"How Davis lost the throne"

Here's a fascinating article by Judi Bevan in The Sunday Times of April 3: How Davis lost the Sainsbury throne. It recounts how Sir Peter Davis was fired as Chairman of the Company, as well as touching on the issues Justin King, the new CEO, has had to deal with.

Like the article I just posted about, you may want to take some of this with a pinch of salt... but it's juicy gossip, the sort that will spread way faster inside (and outside) and organisation way faster than any official memo. Imagine the effect that reading these words would have on someone working the night shift stacking shelves for a few quid an hour (my emphasis).

BY the summer of 2004, all he [Davis] could hope for was to retire gracefully, although his friends warned him he should think about giving some of the £2.4m controversial bonus back. “I told him he should take a severe haircut,” said one City veteran, “but he could not afford to. He needed the money too badly.”

Davis had become part of the “paid to fail” brigade. When sales and profits were still struggling and costs were being squeezed out of the business at every level, the sight of the man who had led the company to the edge of the abyss walking off with £2.4m on top of his chairman’s salary of £500,000 and other contractual entitlements was too much for those inside Sainsbury and out.

But Davis had not endured what he described as the “hard grind” of the previous four years to relinquish his shares easily.

We live in interesting times. And I for one find it fascinating that behind all the hard metrics and sophisticated analsysis, are human beings who aren't able to keep their feet on the ground and confront each other with hard truths (at least until the eleventh hour).

I wonder if any of the agencies pitching for the Sainsbury advertising account will have suggestions for how the company can have more honest conversations, sooner, in future? Or will they simply become accessories to more avoidance? Usually, consultants find it more profitable to sugar coat their advice...