Culture by Design: How Tesco Made CI Everyone’s Business - with Anu Kalia, Tesco

Speaker A: Hello and welcome and thank you for joining PMI's Leading for Business Excellence podcast. I'm Susanna Clarke, managing partner of pmi, the performance improvement, consulting, training and apprenticeship firm. And today I'm excited to be joined by Anu Kalia from Tesco. Anu's team are, uh, still enjoying the success that they recently achieved, winning the Excellence in CI Culture award, the BQF Awards. And so today we're going to talk about that, what Tesco have been doing to achieve that elusive continuous improvement culture. A bit about Anu himself, his aspirations and of course his plans for what's next in Tesco. So Anu, thank you for joining me and great to see you today.

Speaker B: Thank you Suz. And I suppose above all thank you pmi for giving me this opportunity and sponsoring the BQF award for CI Culture too.

Speaker A: Thank you. Well, it is a pleasure, uh, it's a pleasure on two counts I think. One is because the aim of being able to promote that continuous improvement culture is at the heart of a lot of what we do. But then the joy of being able to hear the stories of what people are achieving is fantastic life confirming about the different ways people go about it. You know, one size does not fit all and everyone has their own theory on this and that's really great to get that experience and opportunity to listen to that. So I wonder if you can start off with a brief introduction, tell us a bit more about you, what you're doing, where you come from, as it were.

Speaker B: Sure. So I suppose it all started back in Birmingham. So a born and Proud Brummie, over 25 years of working experience at A across circle 10 companies now. So Tesco's is my 10th company, first one in terms of fast moving goods and retail. Prior to that experience with Ford Motor Company, ge, BT Group, Barclays, Vodafone.

Speaker A: Long list, but interesting.

Speaker B: Yes.

Speaker A: In terms of different, you don't often see people going through those different sectors.

Speaker B: Absolutely. And I think, I think one thing that is consistent across all of those is change and how the geopolitical economic market drives change, whether that be for the revenue maximization or cost reduction. But that diversity is part of the excitement.

Speaker A: And so now you're at Tesco and specifically you're in the business services group.

Speaker B: Yes. So being with Tesco now for six months, I would say it feels like five years given the, the amount of work and the impact the team have had, not necessarily through myself, but definitely in terms of the elapsed time. So yes, within Tesco's business services, however the strategic aim to ensure that we exp across Tesco in terms of the good work that we've done within the business solutions team. But then beyond that as well. There's no end to that value chain, whether that be with customers or suppliers too. So yes, currently with within Tesco business services but with a clear remit and ambition to become the best in house consultancy offering a number of products and services beyond CI as well across that value chain.

Speaker A: I'm looking forward to hearing all about that. So I wondered if you can take us back. I mean as you say you've been in post for 6 months and I know it wasn't long after you joined that you found out that the team had entered this award. What is the work they've been doing to be able to enter that award?

Speaker B: You're absolutely right. I think I was in two weeks prior to the judging rounds. However, there is a level of consistency and I do usually position this. We won the award and the, and the judging round based on standing on the shoulders of giants. Whether that be Laura McLaren, my predecessor as well as Ronica Rawal who um, kicked off CI within Tesco's as well as a number of team and central team as well as the colleagues and circa four and a half thousand people over the seven years have been through the CI waves. Yes, two weeks in, you know, presenting and leading on the um, the presentation on the award did feel a bit odd but like I say there is a level of consistency with both Ronick and Laura being part of my former BT team. So you know we knew each other, we knew our skills and our, the tools that we applied and what worked well and what didn't work well. So that I suppose worked in our favor. So uh, yes, seven years of CI deployment across Tesco business solutions and it's quite interesting that we had former nominations in the past and those had been very project specific, you know, within the CI culture. Here's an example of a project demonstrating X, Y, Z. I think my recommendation was, and based on my definition of culture, that it's not a year, it's not a project, that actually the fact that we've been doing this for seven years and sustaining and growing, that is culture. And actually even landing in my first week in Bengaluru looking at culture is that piece where people can't see you watching them and how things work every single day and people's behaviors, it was definitely part the culture. So our nomination was based on that and how that seven year journey I suppose started and then the benefits to balance the scorecard outcomes as well as how it evolved over that period. So it started, um, to answer your question, Suz was very much with um, the CEO Sumit Mitra, Dr. Sumit Mitra, came across from BT, had seen the success of continuous improvement and wanted to ensure that as part of his brilliant basic strategy that CI continuous uh, improvement was part of the fundamentals. Now I think to your point, people do at the top of the call, people define continuous improvement in different ways. I suppose our definition consistent to way we deployed across BT as well as each and every colleague regardless of any location with TBS operating in Dundee, Ireland, Budapest and Bengaluru in India were equipped with the appropriate tools and that's from Change, Lean, Six Sigma Sole and therefore empowered, engaged and equipped I should say to solve business, customer and their issues every single day. And I think that that vision was where we applied then the appropriate tools and coaching to enable that. So it started in Bengaluru with uh, I think a team of six central coaches led by Ronick. Restructured approach, very structured framework, but a coaching model rather than a towel model. So a case of allowing failure, allowing people to fall over and how the appropriate tools could work, setting up performance boards, generating ideas. And to date, just to let you know, we have had circa 15,000 ideas from frontline colleagues on how to improve our ways of working for the customer supplier as well as ourselves as well. So yes, so the initial parts then evolved over the couple of years into Budapest and then Dundee and now we're looking to expand that deployment of CI cross, uh, distribution and warehouses and hopefully into stores as well. So yes, definitely a long journey, two weeks in when presenting, um, an immense pride in I suppose presenting that seven year journey because it does come with challenges. But the fact that you know, the leadership team have been engaged throughout and there has been, you know, obviously evolution and changes as part of that, but the fact that it's still core to who we are and what we represent and our ways of working.

Speaker A: I think it was really great when you did do your presentation to have that representation from the different locations as well. And those people all having their voice was a great testimony to how we work. How you're able to work as a team in the broadest sense regardless, not uh, hindered by boundaries or locations. It was really, really great. You mentioned at the beginning this whole question of project versus continuous improvement, or is it the same thing? I think it's definitely for me in this award. Of course it's the, it's the word culture that makes the Big difference. Because I think many people believe a project that is enabling continuous improvement will generate a culture and they're often surprised that it doesn't. I was interested to think, to ask you that question of what's your impression of that?

Speaker B: I think projects, initiatives, JDIs, in terms of just do it A3s are outcomes of how to implement, I think the initial ideas, the mechanism of every individual feeling empowered and brave and curious to innovate. Innovate, to think openly, are the fundamentals of continuous improvement. I think the methodologies then of the appropriate lean change and Six Sigma tools that are then delivered via projects.

Speaker A: Yes, well put. Can I ask you what you do with regards to people joining the organization? Waves of activity happen and people are, um, changing their ways of working and then new people come along and they don't embrace the change in the. In the same way, perhaps?

Speaker B: Yeah, sure.

Speaker A: What are you doing to safeguard against that?

Speaker B: So over the last, I'd, uh, say seven years we've had circa 1500 people join TBS. So whether that be through replacements or new joiners, as part of the growth of the organization, every colleague within 90 days has onboarding training, of which CI is a fundamental. I think it's more engagement because there is an element of what this means. M for you, what the company will give you to support the culture and what's expected of you and live examples of that. So that's from an onboarding perspective. We're continuously transitioning new functions and processes from the uk, from a cost perspective or an efficiency and effective perspective, into India or our, uh, different locations. Our team are fundamental to that, whether that be assessing the processes before they come across or the new teams that are created. And how do we create performance boards on the shop floor once those teams are? So I think seven years on, whether it's transitioning new people, new business parts or onboarding new colleagues, it's seen as part of the fabric, it's part of what we do. And therefore this is the part you as an individual colleague play as part of that culture, which is very important. Yes.

Speaker A: It's just one of the parts of induction that must take place because in the same way people must know how to book their holiday and claim back their expenses, they must know how to improve the organization.

Speaker B: Absolutely. And then it's also seeing established colleagues being recognized on the shop floor for their ideas and their ideas have been implemented. Actually, you want to be part of that culture as well.

Speaker A: I heard some of your team talking about you using it as part of the recruitment and Talent acquisition process.

Speaker B: Absolutely. And I think a lot of global business services, regardless of location, are uh, going through this in terms of the representation of Gen Z. Gen Z innovators want to feel empowered, want to generate ideas and actually I suppose continuous improvement doesn't need to reinvent itself for that audience. It's almost ready made. So yes, career fairs, especially in Budapest, other locations as well, we promote that environment of actually join us because here's some examples of how colleagues have generated ideas. So to me sometimes it's less about the slogan that is continuous improvement, it's just the way we do things around here.

Speaker A: Yeah, yeah, absolutely. So how, how have you looked at the work that has been done very successfully and I'm interested in whether there's been anything that you've looked at and thought I'm not sure I'd have done it that way.

Speaker B: My role here now is where is the next level, where do we want to take CI? The team that we have that is made up of process architecture, Value Stream and CI coaches and how do we become that best in house consultancy and what does that mean and what does that look like? So I suppose my North Star is very much about operational excellence, data driven agile, lean Six Sigma capabilities to drive a balanced scorecard. Outcome is our North Star. And if you're based in finance, which therefore is focused on reporting and controls will be different to commercial services for example, is accepting that. But that North Star is still applicable but then producing a suite of products and services of which CI is one. But it depends on the process maturity and where the organization is. So it's evolving that basics, the foundations and the brilliant basics, I should say the foundations that have been laid and how do we now take that to the next level?

Speaker A: So I know you're only six months in, but where is your thinking at the moment in terms of. And can you give us some sense of the numbers just for our audience perspective, the number that you're of people who you're currently working with in this way versus what the ambition is and over what time period we've covered?

Speaker B: I'd say circa four and a half thousand people with the rotations and new people coming in and out. Ambition. There are 330,000 Tesco's employees. Now the difference here is not necessarily through CI waves or CI deployment. It comes back to where they are from a process maturity perspective. So if you look at the CMMI process maturity perspective or McKinsey's, you know you can have a process uh, that hasn't been mapped there is no controls, there is no ownership, no metrics. Well that's not the right place to start CI. Let's put some basics in, let's map it, let's people understand accountabilities and measures and so on and then you get to the scale from, you know, the initial chaos to managed actually good place to do CI, managed processes. Understanding your roles and responsibility and then you can get optimized through AI automation. I think there is a tendency for organizations to jump from not having processes map and trying to automate. So there is that level of caution. My personal view is it depends on the business need and the process maturity and the problem statement. I suppose the balanced scorecard outcome for me is, you know, it is the people cost, delivery and quality. However, from a broader perspective I think I'm coining four E's now, which is there is a level of experience that's whether that's a supplier experience, colleague or customer experience. There is engagement from a colleague perspective, there is effectiveness to being able to do more with what you have today and then there is efficiency. You know, we want to remain competitive, we take out costs. It's the selection of very appropriate tools. So Kaizen events, hot houses to cultural change, all of those within the product suite. How can we serve the business and touch each of the 330,000 employees across the globe with the right products and services that suit their requirements?

Speaker A: Presumably because you've got senior exec leader support for this, you've also got the benefit of the strategy helping you to inform this and.

Speaker B: Absolutely. And that's the key learning I think and the key takeaway from why CI within TBS has been so successful. So every three years, well two years, there's been an evolution of the strategy. I know Sumit, when he joined Vision 2020, it was very much about the culture, you know, getting the basics right to then Mission 2023 which was the next phase, which was during COVID Right. So it was very much about resilience ways of working and then currently we're in Odyssey 2026 and how do we use data insights to drive growth and provide sustainable I suppose future for Tesco's as well and services for Tesco. CI has evolved with each of those elements of the strategy and moving from initial deployments in the first part of the strategy was very much about managing what's in your control as a team manager. We evolved into the value chain and then currently, as per I suppose the stated objective of expanding across Tesco's through distribution, a great example of this Is So the team currently are ah, working with home and clothing on their strategy and their OP model. You know, CI will become part of that culture. But it's understanding from a data, process, people, technology perspective. Where are we today engaging the teams on pain points, benchmarking where we are against our competitors and where we want to be in three years from a vision perspective. And how do we then use CI, Kaizen, Lean, six Sigma, change, project management, all of the tools in the right places to enable that. The evolution now of the CI team to global process experience and the operational excellence goal is expanding.

Speaker A: You've mentioned performance boards a couple of times. Tell me a little bit more about how you're using them. I'm interested in, I guess two parts of that. One is how you've worked with different groups to work out what are the measures that we're going to report. The second is a little bit about perhaps is technology the right word potentially of that performance, which might be a whiteboard. I would include in techno everything from a whiteboard and on. So perhaps if we could start with the uh, measures and how have you found people's acceptance of managing measures?

Speaker B: Sure. So part of first phase of deployment of continuous improvement is the engagement piece. So every individual knows the contribution they make to the organization and what they do contributes then to the success of the organization and the measures that are specific to teams. So we deploy by teams, therefore recognizing how individuals then contribute to the team and the team then to the uh, broader team and then the business unit. So it is very much hierarchical, but we start with bottom up because it's very much about the colleague themselves in terms of focus. Depending on which function you're working in, the framework is the same. We start off with people. So the people score is how are you feeling? Whether that's today, this week, you know, over the period of time, on the frequency on when those huddles and performance boards are held. But how you uh, are feeling and some people don't like the score or some people use the smiley face. The objective there is to understand if you're not feeling good or you're feeling happy. One of those reasons, because that's where we'll start identifying bugs and issues to improve the second measure. Then we have cost, quality and delivery. I think whichever business unit you then or team you apply, they're standard, the framework is standard. Then it's really about making it applicable and adapting to the team and the colleagues. So whether that's a specific team looking at cycle time or it's a Controls team looking at errors or it's payroll team, because Tesco's Business Solutions manage both pensions and the payroll on a monthly basis for those 330,000 employees. On a monthly basis basis is to ensure there's no errors, people get paid on time. So the measures differ, but it's applicable very much to the colleagues and the part they play, which therefore they have, I suppose, a vested interest and empowered to improve that dial. So that's the technology piece.

Speaker A: Technology, yeah. I mean, that sounds fantastic and I love the way it's rolling up, you know, I really like that idea of that sort of rolling up to strategy for the business units as well and so on.

Speaker B: Yeah. So technology, it's an interesting one. So we like physical, you know, operational huddles on the ground, on the shop floor. Drives that enthusiasm. However, I think two years on from deployment, we were hit by the pandemic. So it was hybrid working and it was quite interesting to see how the team had adapted because we had just kicked off a CI wave in Budapest at that point and introduced hybrid coaching, hybrid engagement sessions with Lego to understand what CI is, and then use SharePoint Excel to create performance boards. I suppose the technology now, even with you can share files, you can show live files on teams. Huddles can be held anywhere. I know from my BT experience, I recall openreach engineers sitting in a van with their iPads before the start of the day, having a team huddle before the day kicked off to understand what was the most challenging part of their prior day. Did anyone in the team know of any resolutions that could be there, done there and then? So I think the huddle for me is key, the structure of the PCQD framework. And I think then to your point, whether it's iPad, Excel, a physical whiteboard with the black ticker tape and the, you know, there's a. And there's a level of, I, uh, suppose independence on the creation of the boards as well. As long as you have the measures, recognition, you know, what problems you're solving and communication, the look and feel actually you want to leave to the team. So they're more relating, it's their design.

Speaker A: Interesting that you've got that beginning with. With people and as you said, you're asking the. How are they feeling? I can imagine, as you said, that some people don't feel particularly comfortable with that at first.

Speaker B: Yes.

Speaker A: But I can also imagine. Well, I know that I talk to a lot of people who. Nobody ever really asked them that question at work.

Speaker B: Yeah. And it totally links to A colleague and well being, health and well being. It's one of probably the best open, probing questions there are. Right. In terms of how are you feeling? I do the same with my team every Monday morning. It's, it's a performance huddle about their week ahead and that how you feel individual personalities will spot talk specifically about work or how they're feeling because of the weekend or pending holidays or the challenges that they face. For me it's to generate the dialogue and how can the team help? Or are others in the team feeling the same way because of X, Y, Z? It could be stakeholder issues or how do we work as a team to solve those problems?

Speaker A: Yes, and interesting because you're going to have teams who are, who are um, not always co located presumably in these huddles and getting some sense about how things are going in the UK versus Budapest, et cetera. I would imagine that gives a real opportunity for those dialogues to happen and

Speaker B: I think that's part of the fundamental of the success. I think as you refer to how in the judging rounds we had representations from the team from Bengaluru, Dundee, Budapest and Welling, where I was. So yes, it allows us to understand the challenges but then also share best practice. And you're right and you know, culture is a great thing, isn't it? And it differs by region as well, but it therefore also allows that understanding of diversity.

Speaker A: You mentioned earlier about ideas and you mentioned the most enormous number in the thousands. Now multiply that up by the number that you are heading towards. In 330,000 people within Tesco adopting this, you know, the reality of managing that, I can feel people saying, good grief, you know, we'd be phasing out the suggestion box just because it becomes too onerous and everyone's saying the same thing potentially. How are you going to manage just some of the practicalities around the site?

Speaker B: So we measure, we have a tool, we have SharePoint, so every idea generated at the board or the huddle, the team manager has the responsibility to enter it onto the, the SharePoint what is the idea? Also search against other ideas just to ensure that hasn't been raised before and it's not a duplicative effort. There is also an approval mechanism in terms of should this go forward and how does it link to experience, engagement, efficiency or effectiveness. And we then also use an M appropriate. I'm sure the, the listeners are accustomed to the Iqku segmentation in terms of is is this issue in our control to solve or does it need to be referred to another team can we solve it? And if we can, is it a, uh, just do it. Is it so obvious that if we take this action, no one else will catch a cold? It's within our control. Or actually do we need to use an A3 tool, a structured DMAIC approach on solving this? Or actually it's technology based, we need to escalate it. So we monitor it through a kanban, if not a workflow, and then also make sure that we see it to execution. And what does that execution then mean from an impact perspective and how we recognize the individual right from source that raised the idea. Now, not all of those 15,000 ideas are implemented, they're not all improved. But it's recognition as well as ideas that are not improved. We go back to the colleague and explain why to generate new ones. So you're right, the extrapolation is a challenge that I'm actually looking forward to.

Speaker A: There's something about your nature though that you're predisposed to look forward to this sort of thing, aren't, uh, you.

Speaker B: Yes, absolutely.

Speaker A: You also mentioned AI I'm interested in and I'm sure there's a variety of different scenarios. If you could just talk us through some of the scenarios where you see the application of AI being part of improvements that you can achieve.

Speaker B: Absolutely. So there are a number of processes and we probably do this ourselves every single day, where we refer to data on some analysis we've done ourselves on Excel, or we then look at image on, on Goog and use different forms of data sources and then we crunch them all together to give us a decision. Actually, a lot of that can be done by AI. You know, you can automate the data in terms of source as well as the screen scrapes that you're doing and the information that you're taking to allow that the AI to make that decision for you, but then also continuously learn about making better decisions. Now that's not saying AI therefore takes out the human element. However, the checking, the data manipulation, the pivot tables that are URL doing, actually it's then redeploying that time spent on more value add tasks to allow AI to do a lot of the stuff that can be automated. And some of that is done through rpa, some of the, I suppose the repetitive actions can be done through rpa. But the AI is that intelligent thinking and how can I take all of these inputs that I would have done physically myself and use the AI with its effective continuous learning to give me better decisions in the future?

Speaker A: And have you been using it for process mining at all or do you plan to?

Speaker B: Yes, well not necessarily AI so we use, I don't know if I should use the brand but we use a uh celebrated brand for process architecture which is linked to our service model. So we process map consistently apply the right measures and we started to process mine identify I think I saw this yesterday across 3 million invoices and discrepancies over supplier challenges or payments versus what we believe they should be paid and use process mining to identify where those errors could occur, where they occur and how we can then use process improvement to improve the process as well as measures and then creating daily dashboards to manage that rather than wait I suppose a month end or six months on to say oh actually the payments aren't matching here is actually to have those dashboards every day. So yes we are using process mining and looking to use it a lot more.

Speaker A: So can we go back to you the decision to join a fairly mature organization. Now I know you're painting a fab, you've done a great job of painting a fabulous future and there are some really exciting times, times ahead. But as you say a lot of people will join organizations to bring in and make their own mark. But uh, you've joined an organization where you've had people who you know so it's great as you say out of the same school. But how do you find yourself sitting there and thinking about well what's in this for me, what, what am I going to really achieve?

Speaker B: And I think, I think with most of my roles it is about making that difference and leaving a uh legacy. So motivator for me is growing individuals through experience, learning, development, the train wrecks that I've been through and the multiple scars that I have and how do you share and develop that but it is making the difference and leaving a legacy. I think the, my aspiration of being the best in house consultancy team is something that wakes me up every morning about the how are there areas of Tesco's that aren't aware of operational excellence or CI how do we go out there and raise that awareness? How do we build that momentum? At the moment I would say with a team of circa 30 we are working across 190 projects and the pipeline is almost double that and therefore that that motivation and of course joining Tesco is because of the expansion across the 330,000 colleagues. But then beyond that it's also attractive.

Speaker A: You mentioned customers supply chain.

Speaker B: Absolutely. Because uh, I suppose the end goal of the right product at the right place at the right time at the right price for our customers and that convenience to provide that you know it, it doesn't start from in store.

Speaker A: And have you done any, have you, have you experimented with any of that

Speaker B: yet in terms of we're looking into warehousing and distribution um, and then I suppose then we can move into the suppliers themselves in terms of partnership. At my former role at GE we used to call it at the customer for the customer. So, so within GE Money for example you'd have the mortgage underwriter sitting with the broker so quicker decisions, understanding their processes before the application actually landed at GE Money.

Speaker A: Very interesting. And in your own career you talked about the different organizations that you've been in. Is there any either event or person who's had a particular impact in how you approach uh, your role as a leader and what you need to pay attention to.

Speaker B: So I'm not going to mention any of the leaders names or managers that I've worked for. There would be too many and I'd probably upset a few if I don't mention their names. But I think the pivotal moment for me is probably my role at Reliance Worldwide Corporation. I spent four years there, two roles before this one because it, it was a family run business that had just been acquired from a, by a global organization circa £700 million. So not a small acquisition manufacturing of plastic valves and that, that control your water temperature and the speed of water that's dispersed so very uh, pivotal in the home. But that role in essence was I suppose a blank canvas from the family led organization it's been acquired. How do we take the innovation, the quality, the pride that the colleagues have to take it to a corporate. So the range of transformation, the variety of transformation to the basic security needs of the colleagues from restrooms to lockers to their investing in local schools for education and different opportunities. I think the length, the breadth and depth of that engagement and the impact is probably something that's pivotal because what you face there as well is the number of challenges as well. So my role at RWC I would say was pivotal which allowed former larger organization learnings and failures to benefit.

Speaker A: And we talked around the sort of everyone comes at continuous improvement from a different angle. In the case of Tesco, you had a senior leader who was saying this is how we're going to work and let's start here for those people who don't have that. What would you suggest they do to get moving with this sort of development

Speaker B: of culture we have I suppose since winning the award and prior we do have a lot of calls with other organizations. Leadership, sponsorship, walking the talk. Being there, uh, is fundamental for deployment. It's fundamental because if something that, you know, we've had three iterations of the strategy now, which is right over seven years, you'd expect that. But one thing that has remained consistent is the CI piece. And that is, therefore it's not optional, it's not gone away. Our leaders walk the floor, help with performance boards, help with solving problems, recognize individuals. I think the leadership piece probably is a key focus and maybe that's where we need to. If that isn't there, that's where it needs to start. So how do we, how do we engage? And I'm sure these, uh, challenges will happen as we look to expand across Tesco as well. In terms of leaders, you know, do I want it, Do I want that empowerment and engagement? To a degree, we all want it. But will it distract from. I need to fulfill X amount of orders. So making time, realizing the benefit of doing so, I think a lot more time should be spent on that to win the hearts and minds of leaders and then the roles that they play in making sure it's sustained. I think that's crucial.

Speaker A: Anu, thank you so much for your time today. It's been fascinating listening to the work that you've experienced, the way the work is happening at Tesco and what your ambitions are, as well as those periphery elements that we can all learn from. And I really appreciate you joining me.

Speaker B: Suz, thank you very much for the opportunity.

Speaker A: So thank you everyone for listening. I hope you've enjoyed this episode of Leading for Business Excellence and, and of course, if it's inspired you do get in touch. I'm sure you can find Anu on LinkedIn. You can certainly find me on LinkedIn, or you can get in touch with us PMI by emailing teammi.co.uk thank you very much.