SIR TERRY LEAHY, who announced that he will retire as Tesco's chief executive next March, is one of Britain's great businessmen. During his 14 years at the helm, Tesco has become Britain's biggest food retailer, its biggest private-sector employer, and one of its most innovative companies. Over and over again, it has anticipated shifts in consumer demand, providing smaller "Metro" stores, healthier food and "ethically sourced" products.
Tesco has, rightly, tried to replace Sir Terry with a Sir Terry clone. Philip Clarke has had a very similar career, starting on the shop floor and working his way up. Mr Clarke even comes from the same city, Liverpool (the big difference between the two men is that Sir Terry supports Everton Football Club and Mr Clarke supports Liverpool).
What does this tell us about the mantra about diversity, which we hear endlessly repeated by business-school professors, diversity consultants etc? There is certainly a prudential case for diversity. Companies should cast as wide a net for talent as possible. BP would be (a bit) better off had it had more American directors to throw at America's media wolves.
But diversity's proponents need to grapple with the Liverpool effect. Some business skills are concentrated in certain places, certain groups of people, and certain cultures. Daimler owes its success to the fact that it is full of German engineers, just as Google owes its success to the fact that it is full of Californian geeks. Narrowness can be a source of strength and cohesion, not a sign of weakness.
Diversity is a technique, not an end in itself. It needs to be balanced against other considerations, such as the clustering of skills. Companies should block their ears to diversity consultants, who think that there is a single solution to every problem, and to proponents of affirmative action, who will not be happy until the corporate sector is "representative" of the population as a whole.
We need much more diversity of thought on the subject of "diversity".