STOrai profiles the people management practices of JOHN LEWIS \u2013 one of the largest high street retailers from the UK.<\/p>\n

The John Lewis story is characterized by success on three fronts \u2013 sales, online and people.<\/p>\n

They have ridden out the recession in the UK and have used their online channel to script a successful, \u201cBrick and Click\u201d strategy. Sales as of December 2013 were \u00a3 11 bn, with the online channel contributing \u00a31 bn.<\/p>\n

The company is entirely owned by the employees. There are no external shareholders.<\/p>\n

Laura Whyte, Personnel Director, John Lewis delivered the Key Note speech at the session on \u201cEmerging People Management practices\u201d at RAI’s Retail Leadership Summit in February 2014. STOrai presents some insights from that speech.<\/p>\n

Employees are partners:<\/strong> John Lewis is entirely employee owned, and is one of the largest retailers in the UK \u2013 sales of \u00a311 bn. The People management Model is based on the principle that \u201cA happy, engaged workforce and a long term focus delivers shareholder value\u201d.<\/strong><\/p>\n

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.<\/p>\n

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.<\/p>\n

The nomenclature used to refer to employees is different. They are consistently called \u201cPartners\u201d.\u00a0 The Partnership model has three key principles:<\/p>\n

\n
• Purpose:<\/strong> Empower Partners with the knowledge and desire to provide outstanding service<\/li>\n
• Power:<\/strong> Generate incremental sales through customer loyalty<\/li>\n
• Profit:<\/strong> Enable the development of deeper customer relationships<\/li>\n<\/ul>\n

  Leadership Compass:<\/strong> John Lewis has internally developed and articulated a \u201cLeadership Compass\u201d (see image). The compass measures the balance between Strategy vs. Execution on its vertical axis, and the ability to keep the balance between \u201cLegacy v\/s Change\u201d on the horizontal axis.<\/p>\n

  The Leadership Compass recognises the contradictory pressures that Partners are expected to manage. By measuring both sides of a skill set (i.e. strategy AND execution \/ Legacy AND change) \u2013 it acknowledges the fact that these will not always be in perfect balance. Partners are expected to use the compass to maintain a ‘creative’ tension, while driving business towards a goal.<\/p>\n

  Partners concerns can range from advertising to the environment<\/strong><\/p>\n

  The John Lewis Own Brand swimsuit campaign:<\/strong>
  \nPlease could you confirm the stance the Partnership takes on using models smaller than UK dress size 10, and whether these models used fit the Partnership\u2019s criteria?<\/p>\n

  Business expenses:<\/strong>
  \nWe have recently seen a lot in the media about the abuse of financial allowances and MP\u2019s expenses. Can Partners be reassured that controls are in place to ensure no abuse takes place in the Partnership at any level?<\/p>\n

  Plastic bags:<\/strong>
  \nAs a responsible retailer, why are we not leading the field
  \nAll concerns are carefully debated, considered and voted upon.<\/strong><\/p>\n

  Implementation:<\/strong> Partnership principles are implemented through the following:<\/p>\n

  \n
  • Each week \u2013 two magazines are published in-house \u2013 a local, store specific edition and a national magazine.\u00a0 Any Partner can write in anonymously to these magazines and their manager must respond. No editing of the letters is permitted \u2013 unless the Chairman approves. Partners concerns can range from advertising to the environment \u2013 and all concerns are debated carefully and publicly and then voted upon.<\/li>\n
  • Employee attitude surveys are used to gauge feedback. Feedback must be implemented, if this is the opinion of the majority of Partners.\u00a0 Response rates to these surveys are 88%.<\/li>\n
  • Partners decide the final % of profits to be redistributed.<\/li>\n<\/ul>\n

    Does it work?<\/strong> If the ‘proof of the pudding is in the eating, then the John Lewis model does work’.<\/p>\n

    \u201cMost UK retailers reacted to the 2009 recession classically \u2013 they cut inventory and head count. John Lewis decided to continue its approach of focussing on the long term. \u201cLet the profit takes its course\u201d was the majority view of the Partners\u201d says Laura.<\/p>\n

    In 2009, the company did not make money for 5 months \u2013 but the Governing Council decided to continue with the strategy of using online as a low cost channel for growth. They saw the online channel as an opportunity, and in 2010, increased SKU’s from 45,000 to 200,000.<\/p>\n

    Over the next four years, the channel became a growth engine \u2013 2013 online sales crossed \u00a31 bn.<\/p>\n

    What next:<\/strong> The Company’s focus now is to consolidate and expand its online success.\u00a0 \u201cWe expect that by 2020 \u2013 Bricks and Clicks will be equal contributors to sales\u201d says Laura. The next part of the story is to go mobile \u2013 in 2013; the company spent \u00a340 million on its website and mobile offerings.<\/p>\n

    Online success is about controlling the supply chain on an ‘end to end’ basis \u2013 John Lewis is building the second fully automated distribution center @ 750,000 sq. feet to match its twin.<\/p>\n

    A large segment of the online customer is young \u2013 39% are less than 35 yrs. old. This is good news for a brand that has often been considered, \u201csolid, stable, middle class\u201d in the UK market. To cater to this demographic, the company has created designer collaborations \u2013 and developed a master brand in Fashion & Home.<\/p>\n

    \n
    • Over 2,000 Partners registered for an external qualification in 2013<\/li>\n
    • Address concerns that retail is not a \u201cproper job\u201d.<\/li>\n
    • 335 Partners achieved a qualification in Distribution<\/li>\n
    • 215 Partners achieved a Contact Handling qualification<\/li>\n
    • New JL apprenticeship programme<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

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