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We’re in a world of U-turns


Nor more U-turns please

A reversal of tactics is typically known as a U-turn and in politics it is
regarded as a very bad move as it signifies flawed initial thinking. It is not
generally regarded as quite as bad in the world of business because a change of
direction can obviously be a sensible thing financially if it is based on new
intelligence.

However, we should not be quite so lenient with business leaders if their
initial decisions are horrifically awful. Sadly we’ve seen rather a lot of
U-turns over recent weeks as a result of companies making seriously poor
decisions as they seek to navigate the Coronavirus.

Mike Ashley has been a very prominent U-turner as he argued the case for keeping
Sports Direct stores open as it was supposedly an ‘essential retailer’. This
poor, money-motivated decision was immediately reversed when he was told by the
government to shut it.

Serial offender Tim Martin, founder of JD Wetherspoon, did a couple of
U-turns after he had argued the case that any enforced closure of pubs would be
an “over the top” move, and then there was also some poor communication over
him possibly not paying his employees when he suggested they should get a job
with Tesco while the Wetherspoon pubs remained closed.

We’ve also had U-turns from some fashion companies including H&M that
said it would be cancelling all its existing orders with suppliers. It has
since backtracked. And there have been instances of luxury groups Kering and LVMH
initially telling staff they would be placed on an emergency government assistance
scheme before they reversed these ill-judged moves on the back of public
outcry.

In Germany Adidas made a rapid U-turn, as well as making an apology,
after it initially said it was to take advantage of the country’s eviction freeze
in order to avoid paying rents on its stores in April. This went down very
badly indeed and the sports firm has since been mending bridges with
politicians and the nation.

In the world of sport Liverpool made a U-turn on its decision to place 200
non-playing staff on the governments furlough scheme. It recognised this was a very
poor move at a time when there are heated negotiations taking place over the continued
paying of full wages to premier league stars.

Such examples show how decisions made on a purely financial basis are
likely to be shot down in flames in the current climate and result in the proverbial
U-turn. People want to see businesses thinking more holistically and having more
purpose-driven imperatives. Will this translate into the post-Covid-19 world or
will we all do a U-turn on this new mindset.

Glynn Davis, editor, Retail Insider



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