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EDITIONS
Friday, 27 September, 2002, 08:56 GMT 09:56 UK
Co-op chief looks back
Co-op shopper
The Co-op says it is focused on customers, not the City

Unlike many other captains of industry, Sir Graham Melmoth's reputation remains positively shiny when he formally bids farewell to his crew this Friday.

The Co-operative Group:
Is the largest independent travel agent in the UK
Is the largest commercial farmer in the UK
Has an investment property portfolio worth 150m
Runs the hugely profitable Co-op bank and the Co-operative Insurance Society CIS
Is mutually owned by its customers
Plans to return the "Divi", a system to distribute its profits among its customers
Operates in accordance with ethical values and principles

In fact, the last person who tried to taint the Co-operative Group chief's image was sent packing with a flea in his ear.

That was in 1997 when the corporate raider and asset stripper Andrew Ragan launched an onslaught on the largest co-operative in the land, Co-operate Wholesale Society (CWS) with a 1.2bn hostile takeover bid.

Recollecting the battle for control of the CWS, Sir Graham looks comfortably cheery as he lounges in a modest office on the top floor of the Co-op building in Manchester.

Mr Ragan's takeover attempt eventually fell apart after revelations that a Co-op director was feeding him insider information.

And in the end, the bid gave Sir Graham a hand, making it easier for him to push through other changes he felt were needed.

Shake-up

While the corporate battle with Mr Ragan was being fought in the background by the Co-op's corporate lawyers, Sir Graham set about changing the organisation's culture.

"We were very old fashioned, institutional, small-c conservative," Sir Graham says.

Co-operative Group
Turnover: 4.7bn
Employees: 55,000
Food stores: 1,100
Department stores:39
Funeral agency branches: 580
Car dealers: 26
Among Sir Graham's innovations were a series of large scale management planning conferences, and a push for greater sexual equality within the firm.

Sir Graham has also pushed for dramatic structural changes.

He has delivered a major merger between the Co-op's wholesale and retail businesses to create the Co-op Group, and brought together its financial services businesses, The Co-operative Bank and the Co-operative Insurance Society.

"We've changed absolutely beyond recognition from a manufacturer to largely a retailer of a number of things," Sir Graham says.

Continuity

And he expects the process of change to continue under his successor, Martin Beaumont.

Travelcare
The Co-op owns and runs a wide range of businesses
"I think that the conglomerate... is slowly refining itself into a consumer-facing business, largely food and non-food on the one hand and financial services on the other, but with an awful lot of cross-over between them," Sir Graham says.

The Co-op's recent impressive commercial performance suggests that many of the changes have already delivered what they promised to do.

"Give it another three or four years, and the commercial logic will become clear."

Another constituency

Not that he ever really cared about what City analysts were thinking: Sir Graham believes his constituency is the Co-op's customers.

"They're not concerned so much about their personal benefit from owning a share in the Co-op, but they are interested in the public face of the Co-op, what it's doing for the community.

"What we promote as principles... gives us a commercial edge [which] in turn drives the performance of the business."

This, in turn, has made many of its commercially minded competitors change their behaviour, Sir Graham insists.

"Talking about corporate social responsibility - it is now the vogue. Everybody is coming in on the act. That must be changing society."

 WATCH/LISTEN
 ON THIS STORY
Sir Graham Melmoth, Co-Operative Group
I don't have to worry about what the analyst think
Sir Graham Melmoth Co-operative Group
We are putting our values upfront
See also:

17 May 02 | Business
01 May 02 | Business
08 Mar 00 | Business
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