THE HUMAN FACTOR: Ben Gordon must make sure that the front of house at Mothercare looks as good as possible while the turmoil backstage is brought to order

THE HUMAN FACTOR: Ben Gordon must make sure that the front of house at Mothercare looks as good as possible while the turmoil backstage is brought to order - Modern business is undeniably complicated. Technology, globalisation and the growing body of empl

by PATIENCE WHEATCROFT, business and City editor of The Times
Last Updated: 31 Aug 2010

Modern business is undeniably complicated. Technology, globalisation and the growing body of employment law and regulation add multiple layers of often conflicting considerations to the simple concepts of manufacturing and trade. I make that point to demonstrate my awareness that to criticise business is much easier than to actually do it. Journalists risk finding themselves derided in an extension of the old maxim: 'Those who can't, teach. Or write about it.'

Nevertheless, I am alarmed at how often businesses fail to get the essential elements of their operation right. Take Mothercare, a straightforward concept with a constant stream of potential new customers.

Providing for the needs of new mothers and their young children was, when Selim Zilkha came up with the idea, a surefire winner. Yet Mothercare has failed to capitalise on the brand name that he established.

The company has just appointed another chief executive, the last having been shown the door after less than two years. It's hoped that Ben Gordon, recruited from the Disney Stores, will inject new life and profits into the business. But first he must sort out Mothercare's distribution system.

Getting product from manufacturers and onto shelves doesn't seem difficult, although Britain's clogged roads don't help. But it's astonishing how often retailers run into problems with this core skill.

Boots and Woolworths have both recently confessed to embarrassing gaps on the shelves. At Woolies, product availability sank as low as 88% in late summer. The effects go much further than lost sales: customers set on purchasing something that fell outside the 88% availability margin would not only buy it elsewhere but feel less inclined to return.

Boots has also confessed to gaps on the shelves, but chief executive Steve Russell has told the City that the problem is being addressed and he is on course to achieve his target by the end of the year. That target, however, is to get only 98% of its lines available at any one time. Hard luck if a customer wanted something in the 2% category.

It is not just retailers and their distribution systems that fall short.

Think of the number of product recall notices that erupt across newspaper pages. How could a manufacturer of children's toys not realise until a product is on the market that a part could easily fall off and be swallowed?

How could a detergent-maker develop a powder that ate clothes without discovering the flaw during testing? Equally astonishing is how a major car-maker could launch a model that had a tendency to turn over.

I suspect that too much emphasis in many modern businesses is put on marketing the product or service rather than on the product or service itself.

This seemed to be the case when I was travelling recently from Blackpool back to London on a Virgin train. The glossy magazine, which I would happily have forgone for a lower ticket price, informed me of the wonderful new trains now operating the route. They certainly sounded like an improvement, with in-seat entertainment and a traveller's shop, and a plentiful selection of refreshments. Meanwhile, I was seated on an old-style train on which the buffet car closed more than an hour before we reached Euston 'for stocktaking and staff changeover'.

As is so often the case, the marketing merely exacerbated the customer's disappointment. It is possible to concentrate on the product before all else, even in today's marketing-led economy. The best hotels in the world do not need to advertise their wares: satisfied customers do that for them. And if their standards slip, the same customers will make sure that their friends know.

James Dyson decided that the best route to success for his vacuum cleaner was to develop a product that people would want to buy rather than investing heavily in advertising to sell something that was more hype than high-performance. Which is not to say Dyson has been tardy in acknowledging the benefit to be had from clever public relations, merely that he ensured that the product would work before he started selling it.

Gordon cannot shut the doors at Mothercare until he has the business sorted out. He must ensure that the front of house looks as good as possible while the turmoil backstage is brought to order. Shareholders will have to understand that to rebuild the company properly from its roots will take time.

Superficial quick fixes helped by slick marketing do not deliver long-term growth. What is required is far more boring. If it were not for the fact that John Major so discredited the phrase, one would be tempted to say that business needs to go back to basics.

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