Is the Tesco storm indicative of a governance & policy failure?

Today's news that allegedly three more Tesco staff, who have links with procurement, have been suspended continues to rub salt in the wound and negatively impact on reputation.

While I have discussed Tesco's procurement many times, I now find myself asking: "is the weakness in the governance and policy as opposed to the people?"

If the press are correct, those suspended now include: the commercial director, the food commercial director, three category directors (group wine director, director of convenience foods, and director of impulse purchases) and someone responsible for sourcing.

It seems impossible to believe all those suspended are mavericks or indeed that they were pursuing a strategy concealed from those with strategic oversight. If that is possible, then how many other areas of Tesco's governance lacked scrutiny?

Nevertheless, it may be a good time to gain insights into the procurement governance and policy of Tesco. If that was a fault, you can hardly blame the staff. Even if Tesco replace the staff, in the absence of addressing governance and policy failures, the corrections will only be cosmetic.

It may also be a good time for those charged with procurement governance and policy to ask, "could Tesco's woes be replicated here?".

More Teswoe's - and thoughts on the linkage of Marketing & Procurement Strategy

With the slogan 'Every little helps' Tesco are also sure to understand the drip, drip, drip of every little piece of negative publicity also counting. I have given considerable attention to Tesco's approach to procurement over the years and how it may not have been just exemplary as others argued.

However, today's Sunday Times article drew my attention to an aspect of Tesco procurement strategy that I previously hadn't considered, namely, minimising customer choice. I just hadn't considered that the strong arm of Tesco's buyers were suspending products from the shelves - customers were being deprived of choice by Tesco. Of course the suspension also had a painful impact on suppliers. Ironically Premier Foods lost £10m in three months. I say ironically as you may recall, some months ago, I referred to Premier Foods bizare approach to defining strategic suppliers.

While these case studies are of interest to the procurement world, to me they are also of interest to those interested in Marketing Strategy. Did Marketing in Premier Foods position Tesco as strategic - clearly Tesco's Procurement Strategy didn't position Premier Foods as strategic. And what about the reputational damage caused by Tesco's Procurement Strategy - never mind that a number of the Tesco staff are now suspended, how much will Brand reconstruction cost. Wouldn't it be interesting to read the brief for the procurement of that Brand agency who have to undo the damage caused by Procurement!