Kesko Ltd. is a Finnish listed trading sector company operating in the grocery, building, and technical and car trade business. Kesko and K-stores form the K-Group, Europe’s third largest trading company. In 2018, it employed some 41,000 people, and recorded retail sales worth approximately €13 billion.
In 2018, Kesko’s strategy was developed in four levels, starting with a wide and more generic concern-level strategy. This was followed by devising field-level strategies for different industries. Within the fields, separate strategies were created for each chain and for the most central functions.
The strategic goal for the K-Group grocery trade division is profitable growth in all channels. According to Kesko’s annual report, strategy execution has seen good progress, with positive developments in customer numbers, sales, and market share. Online grocery sales have also grown significantly. The case company, Kesko, has defined the following strategic objectives: (a) becoming the most customer-oriented and inspiring food company, (b) developing and modernizing the store network, (c) providing a seamless omni-channel customer experience, (d) developing retailer entrepreneurship as a competitive advantage, and (e) expanding the food service business.
Kesko’s strategy is being processed with a new operating model, and more people than ever are now involved in strategy work. Compared to the previous planning processes, hundreds of participants, Kesko’s main organization actors, and K-retailers now serve as active strategy makers. The president of the grocery business emphasized that this has been ‘a big change’, because the involvement of people in the strategy planning phase has contributed to making the strategies more tangible. The president underscored the improved understanding of the strategy work and the positive feelings attributable to it.
In practice, strategy making is done for different business units and chains of the organization. Industry-specific strategies are based on the Kesko corporate strategy, while chain-specific strategies are still being developed within the industries. Simultaneously, the strategies have become increasingly refined.
A comprehensive number of people were involved in strategy work at the different levels of the organization. Organizational actors were recruited on the basis of their job description and expertise to participate in the strategy discussion. Based on the interview, they felt inclusiveness in the work and committed to implementing the strategy. Thus, the strategy simultaneously becomes more concrete and understandable from the viewpoint of practical work. Involving people in the strategy planning entailed considerable training, and specific tools were needed to guide people in their participation. Training increased their understanding about the meaning of strategy in their daily work and raised their confidence and trust in the competence of Kesko’s management.
The collective strategy formulation process creates opportunities for new and brave strategic choices. Trust between partners creates a change in attitudes, in turn leading to a culture of receiving and listening. Thus, the most essential issues are focused upon without fear, and new directions can be forged in discussing the strategic choices and implementing them. An atmosphere of confidence raises the effectiveness of addressing challenges, and pseudo-friendly meetings can be dispensed with. Participation in the strategy work encouraged the employees to question things and become much braver when pondering strategic issues from different perspectives, which can be seen as a sign of fostering knowledge-based trust.
Trust in strategic choices arises as a result of the first strategy work process. Strategic choices are made by top management, but the discussions and data gathered from strategy formulation process direct their choices and perspectives. It fostered a sense of inclusion materialized in intensified shared sensemaking processes and feelings of empowerment, and daring to share opinions and understandings, which raised team spirit. In the strategy formulation phase, the development of both cognitive- and affective-based trust made understandings more tangible and increased commitment to strategy process in the different levels of the organization.
Kesko Ltd. is a large Finnish company involved in the food, construction, technology and automotive industries. Kesko and K-stores form K-Group, the third largest conglomerate in Europe. In 2018, it employed around 41,000 people and generated a turnover of around 13 billion euros. In 2018, Kesko’s strategy was developed in four phases, starting with a broad and broad spectrum of strategic concerns. Field-level strategies for a variety of industries. A separate strategy is developed for each channel and its most important function in the region.
The goal of K-Group’s Grocery Trading division is to achieve profitable growth in all aspects. According to Kesko’s annual report, the implementation of the strategy was achieved with good improvement in customer base, sales and market share. Online sales have also increased. Case company Kesko has defined the following objectives: (a) to become the most profitable consumer products and support of the food business; (b) establish and modernize its retail network; (c) provide a good understanding of each client; (d) improvement of the retail market on the basis of competition; and (e) food aid. Detail. Kesko’s idea speaks of a new model of work, and many people have worked on it. Compared to the previous planning process, hundreds of participants, large Kesko organizations and K stores now follow the expertise. The store manager said it was a “big change”. Indeed, human participation in the strategic planning phase has helped to make the concept a reality. The President improved his understanding of strategic plans and addressed the positive issues that arise from them. In practice, design strategies are applied to many companies and chains in an organization.
Specialized business strategies are based on Kesko’s business strategies, while specialist business strategies are still being developed in the industry. At the same time, ideas were getting difficult. Many people have been involved in the success at various levels of the organization. Artists from the organizations were selected based on their job description and expertise to participate in the discussion. According to investigators, they feel involved in their work and determined to carry out the strategy. Thus, the concept is both unique and easier to understand in the real world. Involving people in strategic planning requires a lot of training and the need for specialized tools to guide people to get involved. The training gives us insight into the essence of the concept in our daily work and builds confidence in the potential of Kesko’s management.
The integrated process creates opportunities for new and bold options. Trust among participants leads to behavior change, which leads to a culture of acceptance and listening. This allows you not to be afraid to focus on your most important issues and provide new information for discussion and completion of selection options. A place of trust that improves the effectiveness of solutions and bogus meetings can be ignored. By committing to a good job, staff have the courage to ask questions and think through idea problems from multiple angles, which can be seen as a symbol of building confidence in the cognitive experience. Confidence in the choice of strategies stems from the first effective process. Choice strategies are developed by senior management, but the discussions and aggregation of data during strategy development determine the management of options and assumptions. The shared process led to a better understanding, a feeling of support and a shared feeling of empathy and understanding which fostered a sense of belonging which supported the team spirit. . The development of cognitive and belief-based concepts during concept development led to better understanding and increased commitment to the process at multiple levels of the organization.