What will happen to Conad?
Conad at a crossroads after Francesco Pugliese's departure. The point of Mario Sassi, author of the Blog-notes on work
What to do? I think it is the prevailing question that is present today in the reasoning of those who reflect on the future of Conad. There are over seventy-six thousand reasons to do so. One for the 2,200 members and one for each of the 74,432 workers in the consortium. Francesco Pugliese's exit closed a part of his story born on May 13, 1962 in Bologna. And it is the story of several generations of entrepreneurs who believed in their abilities and in the strength of sharing common values. The leadership of Francesco Pugliese has not only given an entrepreneurial strategy of "number one" in the sector but has managed to realize a dream otherwise precluded by the very conformation of the consortium. In other words, he indicated to him a new mission: to go beyond his own borders. With its release, do we turn the page and face a new chapter of the same book or do we do something else? That's the point.
Also REWE, first in Germany and then in the rest of Europe, has grown like this. Without a far-reaching managerial project, individual entrepreneurs would have remained closed in their golden enclosures. REWE itself would remain confined to Rhineland Westphalia or so. While today it is present in 14 European countries. Of course, in its core values it remains a cooperative but this has not prevented a managerial evolution with acquisitions outside the individual cooperative realities and a modern vision of the business.
This is why the question of the hundred guns is simple: does the current Conad leadership have the will to adopt a renewed growth strategy? Because if this were not the case, each cooperative would inevitably tend to withdraw into itself and preside over its own perimeter, retracing the path taken in recent years within a formal façade unity. The five cooperatives today boast excellent economic results in their perimeters. Conad Nord Ovest closes 2022 with a turnover of 4.75 billion euros, +9% on 2021, Conad Centro Nord with a turnover of 1.174 million euros, +5.6% on 2021, Cia-Commercianti Indipendenti Associati 2, 66 billion euros +9.74%, Conad Adriatico with a turnover of 2,001 million euros + 8.19% and, finally, PAC 2000A 4,829 million euros, up 8.52% compared to 2021.
However, the elements that we have available today offer us a rather conservative scenario. A President with a precise profile but who from his CV does not seem like a business man who has been entrusted with five responsibilities: corporate representation, finance management, administration and control, personnel management and quality control management, while all the rest of the organizational machine reports to the general manager of operations. From a simple DHR, which I consider myself, a division of tasks at least bizarre. One above all: the lever of people management is not in the hands of those who manage the operational business. At least a false start. Now the only thing missing is for the 5 presidents to propose themselves as CEOs in rotation, underestimating the fact that today's Conad is not simply the sum of the five cooperatives. It's quite another thing.
For now we have been able to hear the individual cooperatives and their legitimate pride in the results achieved. A 2022 closed very well and a 2023 that will confirm its performance. Selex, however, is now one step away. It is true that a purchasing center like Selex cannot be put on the same level as a company like Conad. But if the market share competition was valid when whoever is paired today was behind it, all the more it is valid in this phase. It would be too easy to change the rules of the game on the run.
The Chief Operating Officer remains an indisputable strength. He knows the strengths and weaknesses of the entire consortium. If there is a managerial figure who deserves credit for having accompanied the exponential growth of the consortium, it is certainly Francesco Avanzini. Once the outstanding pending cases have been definitively closed, the Consortium's strategy should be quickly reset. The references, which appeared in the press, to the old cooperative model generating the consortium sound, for an external observer, like a barely concealed desire to return to the past.
What is the true prevailing culture and approach to business of Conad members and therefore of the leadership of the individual cooperatives today? Is it a model like the one proposed by REWE that looks at how to get out of the single perimeters of the current cooperatives by setting new goals in Italy and elsewhere? Or is it something else?
Is Conad addressing the issue of how to compete where the leadership is in the hands of others such as, for example, in discount stores? In a context that sees the decline of large formats and the emergence of discounters, what is the role of Conad? Is there the will to focus on Todis (one billion euros in turnover + 12% compared to 2021) and on its excellent management with acquisitions and accelerations that transform the home discounter into an all-round competitive player? Is the same difficulty in finding new entrepreneurs, for new territories or to consolidate, highlighted in the Auchan affair a subject for reflection and proposal? Does it still make sense to talk about five cooperatives which, in some situations, step on each other's toes with territorial overlaps? Is a strong managerial delegation essential to guide the relaunch compatible with the traditionalist mentality that emerged during and after the Auchan affair?
Conad is closed today. And it's understandable. However, the results obtained are excellent and attributable to all the players in the field. Not only to the leadership of Francesco Pugliese. But it is clear that we are dealing with a worried entrepreneurial conglomerate whose wrists are trembling at the mere thought of putting aside its own, albeit exceptional local success, to continue to compete in an even greater challenge. I believe that this is exactly where we should start. From the awareness of the role, from the resources available, from a management that, away from the spotlight, has been able to manage the business between rocks and waves.
A long time ago, in Galbani, I remember that someone had the idea of bringing together the entire commercial part at the Rimini sports hall. A restart was needed after the major corporate restructuring. Thousands of employees arrived from all parts of Italy. Company managers and executives included. They all left after a couple of days certain that the company was determined and ready for the new challenges. The five cooperatives, if they still want to have a future as leaders, must question themselves, dissolve the ambiguities present in each of them, involve the members transversally and decide to restart together. I like to think that the Margherita, symbol of Conad, doesn't have six petals by chance. There are certainly five cooperatives. The sixth is management and all those who work behind that symbol. In stores, cooperatives and up to Bologna. Be careful not to underestimate their expectations.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/che-cosa-succedera-a-conad/ on Sat, 19 Aug 2023 06:06:42 +0000.