Institute for Simplicity

Aldi is becoming a pretty normal supermarket with brand items and some 2500 to 3000 SKUs. Now, ALDI also changes internally and gives up what made the business model great and so successful. Organization and processes were always totally different from other companies. Aldi per definitionem was different. That was the reason for success. ALDI Nord now has hired a new Executive Manager („Verwaltungsrat“) for „Compliance, Legal and Taxes“. Additional Managing Directors in the headoffice are responsible for Logistics, Sales, Marketing and Communication and another one for Corporate Responsibility.

In the successful ALDI system there was no room for staff departments, the playground for all headoffice executives. ALDI never had a Marketing Department, nobody existed for talking to the press. Legal topics were managed by external law firms. There was never anybody in an ivory tower busy with topics which naturally belong into the line organization, the ALDI regions.

ALDI was the champion of decentralization and delegation of tasks and responsibilities. Any typical central functions one knows from any other company have been delegated into the lines. Each regional company was responsible for certain tasks like logistics and advertising and served all other regions. And Sales was a common responsibility of all, not of one high executive in the headoffice. That´s how the legendary Nestle CEO Helmut Maucher put it: „Marketing is a matter of the boss.“ In this sense all regional Managing Directors were responsible for Sales and Marketing.

Today´s ALDI management seems to have no idea of the significance and the success of the former organization and principles. Otherwise nobody would even have considered central responsibilities and departments for „Marketing and Communication“ or „Corporate Responsibility“. The line organization who knows best what works has nothing to say any longer. The new staff departments will soon come up with much more ridiculous nonsense like the ALDI customer magazine, customer washrooms, coffee machines for customers or customer satisfaction surveys. ALDI does not any longer focus on what is essential, what is really important and consistent in terms of the business model.

Since the founders left and passed away everybody apparently has forgotten what the great success of the business model was based on. Now, ALDI even comments in public  on a new  internal dress code (no more tie needed). In the past, ALDI never commented on anything, today on everything. Nice-to-have instead of what-is-essential has become the new principle. Just a matter of time that also financial results are as poor as the new ALDI protagonists.