CIO Profile: M&S CIO Darrell Stein on benefits-driven strategies

This is not just food, it’s M&S food,” the well known advertising slogan intones. The success of this campaign and the products it promoted was down to the fact that it showed that with a little effort you could add — to borrow another slogan — a little magic and sparkle to the ordinary staple diet.

The semantics of ‘hand-prepared’, ‘slow-braised’ and ‘21-day matured’ lift these products from the commodity market into the hallowed premium arena.

Marks & Spencer (M&S) prides itself on being a premium department store in a commodity supermarket-dominated retail scene.

But after complacency very nearly cost it its crown, the 126-year old company has pursued one of the most aggressive renaissance programmes in the business world.

Darrell Stein, CIO and supply chain chief of M&S knows a thing or two about renaissance: as a long-suffering Tottenham Hotspur fan he is enjoying the club's recent return to form, while his return to his working roots at M&S has given him a licence to experiment with new management techniques as he modernises the IT and supply chain seams that hold M&S together and are essential to the retailer's re-emergence as a serious contender.

“People buy M&S underwear because they know it won’t fall apart in the wash. The company seems to have the same quality,” the Financial Times said in April.

The bounce-back from a series of damaging profit warnings back in 2004 at M&S is on-going. There is still a long journey ahead, non-food sales fell by four per cent in the April 2011 results.

But the ambitious Plan A to cut the environmental damage the retailer causes has already made the business £50m.

Much of the bounceback at M&S is credited to Sir Stuart Rose, the chief executive who left the company in July 2011 having already handed the hot seat over to ex-Morrisons boss Marc Bolland.

Rose refocused M&S and won back younger shoppers, which helped keep the business independent as bidders such as Sir Philip Green aimed their acquisition sites on the department store.

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Rose’s refocus hasn’t just been about good ads and branding, he instigated a root and branch overhaul of the entire company, remodelling shop interiors, product lines, back office functions and Stein’s IT and supply chain functions.

A comfortable fit
“I think we are becoming a lot more comfortable with change. You have to be brave as sometimes it can be a bit bumpy,” Stein says of the journey he and the company have been through since he returned after 12 years away in 2006.

“We told the city in October 2009 that we would spend £1bn on IT and the supply chain for five to seven years and from that there would be £250m in cost savings per year by 2015. We have now increased the savings target to £300m two years into the project.

“Some of the money doesn’t go on cost savings, some goes on increasing sales,” he explains of the disparity.
To achieve such considerable savings, Stein has had to rethink the way he manages the transformation of IT and supply chain at M&S.

“Rather than base the IT project objectives on a set of dates, I have given them a business benefit target. What that does is it focuses the minds of IT people.

“You have a certain amount of money to spend and you have benefits to achieve. If you are not getting the benefits then you have to find another benefit.”

Stein describes the method as “a big mindset shift” and admits that it’s not a management method he has used before.

“Running two functions of the business has helped me and taught me that it’s a better way to manage a back office function,” Stein explains.

On the wall of his office is a chart of the 2020 benefits targets, which the CIO describes as being a more important chart than the considerably smaller IT structure chart that sits next to it.