Brad Banducci bets culture change will revive Woolworths

Yoga, ocean swimming, mindfulness … whatever Woolies boss Brad Banducci is doing seems to be working.

Brad Banducci: ‘I’m getting more positive stories’ about Woolworths. Picture: Renee Nowytarger

What does a chief executive who is about to unveil the biggest loss in his company’s history do to prepare for the day ahead as analysts, investors and the media wait to pounce all over his presentation and turnaround strategies?

For Woolworths chief executive Brad Banducci, the choice was simple — do what he does normally every week: get up early before the sun rises and go for a swim.

He couldn’t make it to one of his favourite swimming holes, Sydney’s Icebergs pool at Bondi, and his yoga mat stayed in the cupboard. Instead, the South African-born boss of Australia’s biggest retailer headed somewhere else at just before 6am on Thursday to do some laps — and ponder the financial ­avalanche coming his way.

“I do a lot of yoga and swimming right now. I did my swimming this morning before I came to work, at 5.45am,’’ Banducci told The Weekend Australian after Woolworths posted a full-year loss of $1.23 billion, its first lurch into the red in 23 years as a public company.

“I find it very relaxing, and mindfulness is an important dimension in our world.’’

Other times Banducci can be found ocean swimming, rejoicing in the meditative qualities of the open waters where there are no barriers, no rules to keep him hemmed in.

Whatever he is doing, it seems to be working.

Over an intense 48 hours of deal-making and announcements, Banducci put the final nail into the coffin of Woolworths’ failed Masters hardware venture, selling it off in parts to a cabal of venture funds, wealthy families and bottom feeders, and then unveiled the massive loss.

And he remained very chipper all the way through. Maybe that’s because when he turns up at a barbecue or dinner party these days, he isn’t only hit with stories of bad service, empty shelves and long lines at the check-out. Banducci is also hearing some good stories in the mix.

“I’m hearing more positive stories ... I’m getting more positive stories than negative stories and it has energised me,” he said.

“And I’m getting more people saying to me or the team, ‘You know, something is different in Woolworths, there is just something there, I don’t know what it is, just a better energy’.

“I get it and I take feedback from suppliers or staff or whom­ever and when you get positive ­stories as well as negative stories it’s actually energising.’’

For Banducci, who through his career has collected a commerce degree, law degree, an MBA and done a stint with Boston Consulting, his focus since taking the reins of Woolworths in February has been to transform the ­retailer’s ailing culture.

It is cultural change that all things good would flow from. Happy, more motivated staff serving customers better and finally more happy customers willing to choose Woolworths over Coles and Aldi, and when they shop they fill up their baskets with more groceries.

And it starts with admitting mistakes. For Woolworths there are plenty of those, and plenty of blame to go around.

“I don’t resile from the bad issues; we have made mistakes. I have said to the team a successful culture is one that acknowledges mistakes and learns,’’ Banducci said.

“We talk a lot about this … no one always gets it right. I say to the team, we all make mistakes but if you don’t acknowledge the mistake, then you have a problem.

“And it’s not actually saying it, it is doing it. It’s me being in a store a day or two a week ... not telling the team what to do but actually saying, let’s look at customer data and they tell us what to do.”

As part of the rewiring of culture, Banducci broke with tradition and sent a video of himself talking about the 2016 performance to staff at about the same time the company’s results landed at the ASX.

Typically, internal communication would only happen later in the day, but this time up to 25,000 Woolworths staff saw a presentation first.

“The team heard from me before they heard from the press, which is quite unusual in Woolworths. (I wanted) them to hear from me first and get my interpretation on things,” Banducci said.

“I am just trying to make sure our team get balance and context, what the media don’t often write about.’’

An optimist looking for something positive in the $1.23bn loss this week at least could grab for news that since July same-store sales growth was in the black for the first time in 12 months, albeit by just 0.3 per cent.

Banducci said 0.3 per cent “isn’t good … but it’s just better than what we had.

“It’s nice to get a decent start.”