Impact of leadership in performance Burberry plc, UK

 

Table of Contents

Introduction. 3

Leadership at Burberry. 3

Leadership theories. 4

Leadership at Burberry. 4

Conclusion and recommendations. 6

References. 7

 


 

Introduction

Background of Burberry

Burberry is a British luxury fashion brand that was founded by Thomas Burberry in 1896 by Thomas Burberry. It was named after Thomas Burberry. It is easily recognised as a British iconic brand, known for its iconic trench coats for men and women. The organization is listed in the London Stock Exchange and in 2015, the company recorded £2,515m and profit before tax of £421m. It is driven by four main objectives that guide its decisions on products, processes, retail, and productivity. Its main themes include brand first, customer-centric, famous for product, and productive and responsible. The main products sold under the brand of Burberry are accessories, women's, men's, and children's products. These products are designed in-house and sold to different parts of the country. Being a luxury brand, quality and authenticity through quality product innovation, management, and organisational leadership are key to its success.

The essay discusses the impact of the leadership and performance of Burberry. The company was used in this research due to its performance and existence for over 160 years since it was founded. At some point in its history, it was performing poorly, its image was tarnished and its heritage was almost decimated. However, this changed after Angela Ahrendts took over leadership in 2006. This essay analyses the leadership style approach used and why it was useful in the performance of the organisation after taking over. Different theories as applied by the leader are discussed and linked to the case study organisation of Burberry.

Leadership at Burberry

Rost (1993, p. 72) adopted Kellerman’s (1984) definition of leadership as the “process by which one individual consistently exerts more impact than others on the nature and direction of group activity”. This indicated that this is a process rather than a one-off process, and daily as opposed to an activity lasting one day. There has to be persuasion of people and a definite goal or direction that is to be achieved from the process. A leader must articulate these needs and convince and inspire the followers to do it. Ricketts and Ricketts (2010) noted that have been more than 350 definitions of leadership in the last 80 years, adding that recognising it is not as hard as defining it. The two proceeded to define it as “the ability of a person -the leader-to move an organisation to group toward the achievement of accomplishment of its goals and objectives, using whatever style is the most effective in each situation”. It is the process of achieving specific group goals.

Leadership theories

Leadership theories are based on different styles of leadership used by different people in different locations to achieve a specified goal. The theories can be classified as follower-centered or leader-centered or from behaviour or trait behaviour approach. Veach (Veach, et al., 2010) explained that there are traits and cognitive abilities that are associated with certain people that predispose them to be leaders. The personality, motives, values, and skills are used to determine the level of growth and development, using these distal characteristics. Proximal abilities such as social skills, appraisal skills, problem-solving and are also associated with these innate abilities that are associated with leaders. However, behavioural theory of leadership observes that leaders are not born but are made, best qualities can be developed and enable people to succeed as leaders. It means the qualities described above can be learned and practiced until they are perfected to enable a person to be a leader.

Leadership can also be described as follower-centered or leader-centered. Participative leadership approaches such as democratic, Fiedler’s Contingency Model, Situational Leadership, Vroom-Jago Contingency mode among others. Situational leaders use factors prevailing at the moment such as capability or motivation and the nature of the task to be completed. It is preferred because the style applied is suitable for the conditions of that time. Participative or democratic leadership allows employees or followers to be part of the decision-making process where their contribution is considered in the decision-making process. Though slow in the process of making decisions, employees are given a voice, feel empowered, and can be motivated compared to leader-centered styles such as authoritarian.

Transformative and transactional leadership styles are used to describe an approach that is used to change an organisation using evidence but with different motives. Aaron (2006) noted that whereas transformational inspires and motivated workers to achieve a certain target. Transactional is based on “reinforcement and exchange” where the focus is on the leader and not an organisation as in the transformational approach.

Leadership at Burberry

Burberry was a failing organisation that had declined several years before Angela Ahrendts took over. According to Ahrendts  (2013), the brand was aging, it was easily accessible and quality could not be controlled as before due to various manufacturing locations that followed licensing to 23 makers globally. Whereas luxury was growing in the mid-2000s, Burberry only grew by 2%. The company did not focus on making what had made it famous previously. There were too many products of Burberry products in the market and with this, its luxury and exclusiveness were fast fading. Its traditional customers shied off the brand as it was no longer appealing to them. Exclusiveness is a working rule in luxury and ubiquity kills these brands as they become like all else. It was not competing with its peers such as LVMH.

After Angela took over the institution, she used her cognitive skills through experience to know the problems the organisation was facing and which needed urgent resolution to make it succeed. The leader noted that consistency was needed and implemented the change effectively. These changes included cancelling all 23 licenses through renegotiation with other businesses that designed using the Burberry label and employed a skilled designer, Christopher Bailey who ensured only approved designs were released in the market. Qualities of transformational leadership exhibited included courage, vision for the firm, and not herself. Despite the political uproar over the decision to close some shops and decentralise Burberry centre for production, the leader stayed on. She led by example which inspired Christopher to create visionary trends that were not only good for the business but also customer experience.

the ethos and culture of Burberry needed to be created and instilled in people during this transformation.  And, the introduction of digital marketing that connected well with the youth that had embraced the social network era was needed to embrace them as well to do away with the aging perception of the brand. This was part of the strategy that Burberry used to be “consistent on emphasising its Britishness” (Gilchrist, 2016). This also exemplified visionary leadership as the company is widely considered among the pioneers of luxury digital marketing. the performance of the company in the days after this change of strategy and leadership is needed in the financial revenue that was generated.

Conclusion and recommendations

The essay discussed the transformational leadership of Burberry under Angela Ahrendts that led it to realising its goals of revamping its image that was in fact fading. Transformational leadership was applied in this essay where its characteristics were applied in the organisation and evidence in financial performance was given. the success of the organisation needed a change in strategy adoption of a new organisational culture and a vision of accommodating the youth to adopt the brand using social networks. This later became part of the main strategy that led to its success to date where it can once again compete with major luxury brands like Gucci or LVMH. Success requires this vision and understanding problems of the organisation for appropriate steps to be taken.

 

 

References

Aarons, G. A., 2006. Transformational and Transactional Leadership: Association With Attitudes Toward Evidence-Based Practice. Psychiatr Serv., 58(8), pp. 1162-1169.

Ahrendts, A., 2013. Burberry’s CEO on Turning an Aging British Icon into a Global Luxury Brand. [Online]

Gilchrist, S., 2016. The Democratic Republic Of Burberry. [Online]

Ricketts, C. & Ricketts, ‎., 2010. Leadership: Personal Development and Career Success. New York: Cengage Learning.

Rost, J. C., 1993. Leadership for the Twenty-first Century. Westport: Greenwood Publishing Group.

Veach, P. M., LeRoy, B. S. & Bartels, D. M. eds., 2010. Genetic Counseling Practice: Advanced Concepts and Skills. New York: John Wiley & Sons.

 

 

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