Key Note: Emerging People Management Insights – The John Lewis Case Study

John Lewis Model of People Management in Retail.

01• John Lewis is an employee owned Retail company

• It is one of the largest retailers in the UK – sales of 11 bn pounds.

• The People management Model is based on the principle that “A happy, engaged workforce and a long term focus delivers shareholder value“.

• The proposition to employees is about outstanding leadership and training.   John Lewis believes that employees, will then deliver a customer satisfaction proposition, sufficiently differentiated as to create value.

How the partnership model works

• No external shareholders – the company is entirely financed through internal accruals and borrowing.

• Profits are either ploughed back into the business, or redistributed back to the employees.

• Everybody, gets the same percentage of profits irrespective of grade / level.

Laura Whyte, Personnel Director, John Lewis

Employees are “Partners” in the business.

The principles of the “Partnership Model”

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Behaviours which epitomize the Partnership model.

03• These have been articulated, crafted and adopted by Partners.

Developing a Leadership “Compass”

• Partners have created a Leadership “Compass” – Critical behaviors that are required by current and future leaders which recognize the conflicting tensions that they are expected to reconcile.

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Leaders are expected to balance and maintain a ‘creative’ tension, while driving the business towards the goal.

Mechanisms that John Lewis uses for getting things done.

• Partners decide the final % of profits to be redistributed.

• Each week – two magazines are published in-house – a local,  store specific edition and a national one

• Any partner can write in anonymously – their manager must respond.

• No editing of the letters is permitted – unless the Chairman approves.

• Employee attitude surveys are used to gauge feedback – which must be implemented, if the it is the opinion of the majority of Partners.

–Response rates to these surveys are 88%.

On employee attitude surveys:  “If you are not prepared to change, don’t ask the question”.

Partners concerns can range from advertising to the environment

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All concerns are carefully debated, considered and voted upon.

What happens when things get tough?

• Most retailers reacted to the 2009 recession classically – they cut inventory and head count.

• John Lewis decided to continue its approach of focussing on the long term.  “Let the profit takes its course” was the majority view of the Partners.

• In 2009 the company did not make money for 5 months.

• Saw the online space as an opportunity, increased SKU’s from 45,000 to 200,000.

• Over 2009-2013 the online channel became a growth engine – 2013 online sales crossed 1 bn pounds

Taking decisive action – the online story.

• Expect that by 2020 –Bricks and Clicks will be equal contributes to sales.

• Website / mobile enablement is key.  2013  – spend of 40 mio pounds on the website.

• Online success is about controlling supply chain – end to end:  building the second fully automated DC @ 750,000 sq feet to match its twin.

• A large segment of the online customer is young – 39% are less than 35 yrs old.   This is good news for a brand that has often been considered, “solid, stable, middle class” in the UK market.

• Have created designer collaborations – and developed a master brand  in Fashion & Home.

All concerns are carefully debated, considered and voted upon.

Investing in Partners (i.e. employees)

• Over 2,000 Partners registered for an external qualification in 2012

• Address concerns that retail is not a “proper job”.

• 335 Partners achieved a qualification in Distribution

• 215 Partners achieved a Contact Handling qualification

• New JL apprenticeship programme

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Laura Whyte,

Personnel Director, John Lewis

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