The John Lewis Partnership has become one of the UK’s retail success stories. And, says its Personnel Director, Laura Whyte, holding the company to account is at the centre of everything it does.
The second week of March is always an exciting time to be employed by John Lewis, the department store group. Hundreds of staff gather at the flagship branch in London’s Oxford Street to hear an important piece of news. Unlike most retailers, John Lewis is owned by its employees, which means when the company does well, so do they. In March, they find out what their hard work through the winter months and the hectic Christmas trading period has yielded. It’s when John Lewis, where Middle England flocks to spend its money, reveals the size of the annual staff bonus.
Sharing your success
Last March, the mood was jubilant. Staff thought they had done well, but not this well. The bonus pot for 76,500 workers was nearly £200m, far higher than the £151m they split in 2009. Despite the continued gloom in some quarters of the high street, it meant staff received a bonus equivalent to 18% of their salary, or £2,700 for the average member.
“That was a very special moment,” said Laura Whyte, who has been John Lewis’ Personnel Director for almost three years. “There’s something very compelling about that announcement. Everyone gets very excited about it.”
It’s on days such as that one that John Lewis justifies how it operates. The group, which runs 28 department stores, four ‘at home’ shops and the 250-strong Waitrose supermarket chain, was put into a trust for its staff, who are called ‘partners’ internally, by the founder, John Spedan Lewis, before his death in 1963. It means that everyone, from the shop floor upwards, shares in the spoils of success. What makes the role unique for Whyte – who runs personnel for the John Lewis side of the business, but not Waitrose, which has a separate management structure – is that everyone has a say in the running of the organisation as well.
Its customers may hold it to its price-matching pledge, ‘Never Knowingly Undersold’, but John Lewis’s staff takes its promise to them extremely seriously too. Holding the company to account is at the centre of everything it does. The John Lewis Council is made up of elected staff members who sit alongside executives to give the workforce a voice at the highest level of the company. What they have to say often comes up from the grassroots. In each John Lewis branch there’s a local staff forum, and below that there’s even a committee in each store department. When the council meets three or four times a year, councillors can ask anything they like.
“In the last year, the council were increasingly challenging me about the policy on pay banding – how we link reward to performance,” Whyte said. “They flagged up fairly clearly that they believed there was some inconsistency in how the policy was being applied between branches. I undertook a review of the policy and went back to the council in January saying, ‘Here are the points you made and here are the developments that we have recommended to the management board. That has now been accepted, so here is how your influence has been brought to bear’”.
Then there’s The Gazette, an in-house weekly newspaper run independently of management. Any member of staff can write in anonymously to raise a matter of concern. Only the chairman of the group can block publication – and then only if the letter is defamatory. The rule is that John Lewis must publish a response within 21 days.
Taking the workforce with you
It sounds as though Whyte could be forgiven for trying to engineer anything controversial, such as a large-scale change programme. But a strategy to centralise some support functions, including call centres, has just drawn to a close after more than two years. Previously, there was a call centre team in each branch, but they’ve been consolidated in two locations, Didsbury and Hamilton. Out of John Lewis’s 27,000-strong workforce, some 3,000 employees were affected, but Whyte managed to redeploy 80% of those elsewhere in the business.
“We’ve been very fortunate,” she said. “Our customers have stayed loyal to us and because we’re not stock-market quoted, we’re able to make some of our decisions over a longer timeframe than some of our competitors. So when we get into things like looking at organisation and structural change, we can take time to make sure that we take the workforce with us.”
It clearly works, as staff turnover stands at 14%, roughly half the retail industry average. One of the main advantages of that to Whyte is that she knows she stands to make a good return from training. There are two main programmes. The first is the Selling Academy, which focuses on customer service and product knowledge, giving staff the chance to progress through three tiers of expertise on merchandise. The second is Horizons, which builds leadership capability, including for those who want to make the first step into management. John Lewis’s management board features three executives who came up through the graduate training scheme, as did many of the branch heads.
“The one thing I am confident about is where we have a partner with ambition and aptitude, we have a framework to support them,” she said. “With learning and development, I favour a pullpush approach. For me it’s about partners wanting to pull from the offer rather than managers pushing it. Learning is at its most effective when there’s a huge appetite for it.”
This article is taken from the November 2011 edition of Private Business magazine.
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