On the couch with Charlie Mayfield, Chairman, The John Lewis Partnership01.Jan.2012
YSC has been working with the John Lewis Partnership since 2008, supporting the organisation in a number of areas, including running a high profile Board development programme.
The John Lewis Partnership is one of the
UK’s longest lasting and most successful retailers, made up of 35 John Lewis shops (29 department stores and 6 smaller ‘at home’ shops), 272 Waitrose supermarkets, an online business, a production unit and a farm. The John Lewis Partnership is also the UK’s largest employee-owned organisation: its 76,500 permanent staff are all Partners in a business with annual gross sales of over £8.2bn. Charlie Mayfield is Chairman of the Partnership, overseeing the Managing Directors who run the two main businesses.
The John Lewis partnership model is widely praised – cited as key to everything from customer service to resilience in recession. But if it’s so good, why haven’t more companies followed suit? The prevailing view of business ownership, particularly in the UK and the States, has come to mean a joint-stock company listed on a public stock exchange. There are unquestionably benefits that flow from that, but I don’t think it’s the only way to run a company. I passionately believe there should be greater plurality of ownership in the economy. We are one model – which I happen to think is a very good one – but it’s not the only one. You’ve got lots of different forms: co-operatives, mutuals, employee-owned businesses, family-owned businesses, traditional partnerships...
Do you think the current financial shock will encourage different thinking?
It’s certainly made people alive to the issues. There’s greater awareness both of the need for moderation of some of the models we’ve been taking to an excessive level – and greater plurality; this could be a good thing for stability. I think there has been an erosion of public trust. The danger is that we end up in a situation where people feel that any large organisation is somehow suspicious or bad.
Was John Spedan Lewis’s decision to form the Partnership in 1928 a pragmatic or a principled move?
A bit of both. He was in his early twenties when he started running Peter Jones and he had a tempestuous relationship with an incredibly autocratic father, so there was an element of wanting to stand back from him. But he believed passionately that it was better to run a company from the principle of fairness – and that the way other businesses were being run was unfair to the point that it would threaten their survival over time. I don’t think it was a flash of inspiration: the idea started forming in his mind when he was laid up after a riding accident in 1910 and then a number of events, including the 1917 Russian Revolution, probably built his conviction and sense of urgency about its validity.
What are the upsides of the model from a commercial point of view?
That it is extremely resilient. We’re not vulnerable to short-term thinking. Our model means we are absolutely committed to long-term plans. Probably the key element of our resilience long-term is the continuity we establish with our people.
Because they’re Partners not employees?
Definitely. They have much more buy-in. Financially, the bottom line is that they get a Partnership bonus dividend. But there’s an emotional connection too. That sense of ownership has seen John Lewis through some rocky times.
What does that relationship mean for how the business is led?
I am completely accountable. I have to go in front of the Partnership Council, an elected body of 70 councillors, twice a year and they can ask anything they want about any aspect of our business – and they certainly do.
Does the Council have teeth? Can it actually influence strategy?
Definitely. The only way the Chairman can get sacked is if the Council votes for it. That has never happened – but it doesn’t mean the Council is a damp squib. On the contrary, it hasn’t happened because it has been so effective.
Are there any downsides to that democratic culture?
There’s a risk of not generating enough urgency for change. There have been times when the Partnership has become complacent and introspective – almost taking refuge in its differences as a reason not to respond to what’s going on around it in the outside world. Introspection is a real enemy for us and we have to work hard to avoid any sense of that, though I don’t think we’ve fallen into that trap for many years.
How have you avoided it?
My whole mantra is that the Partnership is not just a nicer way of doing business – it is fairer, it is nicer – but it must be a better way of doing business because otherwise, ultimately, we fail. That’s the way the market works. We’re either better as a result of those differences, or ultimately those differences will become a burden to us. People talk about this being a great place to work. But I say: you know what? I’m really glad, it’s fantastic..... but it’s not nearly enough.
John Lewis is ‘a temple to Middle England’. True?
I don’t think so. We’re a brand that appeals to lovers of great food, style and service.
Nonetheless, you seem to have a particular connection with the British public. How did that come about?
There’s always been a warm personal relationship between customers and the Partnership. But it was a local one. The great change is that we’ve become much, much larger. We’ve gone from an original Partnership of 500, to 80,000, but we’ve maintained the original focus on offering genuine service and good advice. Nobody gets paid commission, that’s very important. We want customers to talk to someone who knows what they’re talking about – who will advise them objectively. We’re not interested in the size of the sale you make on that day, it’s about the lifetime value of the customer – a hackneyed phrase, but crucial to us. That’s why our focus on giving our Partners more fulfilling employment – and investing in benefits, training and leadership – is so important.
The poise and professionalism of even your youngest customer-facing Partners is often remarked upon. Is there a magic formula?
Some of it is osmosis: when a 17-year old arrives, he/she sees those behaviours being modelled from day one. But we work really hard at recruitment, especially regarding attitude. We’re looking for people who are driven, but team-oriented – someone who isn’t going to go off and be a complete out-and-out hero all on their own.
How has working with YSC helped?
Businesses do well because they build capability in the long run. Where they go wrong is that you can have the most capable organisation in the world, but if those capabilities become irrelevant – they’re just costs. That’s where leadership comes in. YSC has helped us gain a more objective view of the competencies, both personal and professional, that are needed to deliver the values of the Partnership [to fit a changing world]. Understanding their own strengths and weaknesses clearly helps people with their personal development. But the YSC programme has also enabled us to articulate more clearly what they’re aiming for.
Is the group’s ‘national treasure’ status the reason you haven’t expanded abroad?
We’re not in a great hurry to go international, partly because we’ve still got plenty of opportunities to exploit in the UK. But we’re thinking about it for the future. We’re starting by offering John Lewis internationally online. It will teach us a lot – in a year’s time we’ll have a much better sense of the underlying demand for, and awareness of, the John Lewis brand. Many retailers have failed because they’ve indulged in retail imperialism: thinking they can just export their formula for success in the home country.
Any other reasons?
Because of our philosophy of sharing profits with the people who make them, we’re in a different position from other companies. My absolute desire would be to see those people becoming Partners. What we have to figure out is to how to make that happen in an economically advantageous way. A lot of Indian businesspeople I speak to are fascinated by the partnership model, because India is developing very quickly, but very unevenly. They recognise that economic growth is beneficial to everyone in the country – and capitalism is a great way of driving growth. But they’d like to find a fairer form of it.
You have an army background, how did that shape your views on leadership?
It was a brilliant experience for me. I was given loads of responsibility, probably before I was ready to have it. I remember thinking: all my mates are at university (probably drinking...) and here we are in Northern Ireland. You grow up and you slightly sink or swim. The great thing about the army is that it provides a fantastic support network. I was extremely lucky to work with some brilliant non-commissioned officers. You don’t get respect just because you’re an officer – the antithesis in fact. You have to earn it. People misunderstand the army because they think it’s all about command. There’s an element of that, but actually it’s all about relationships.
You have been described as “a charming zealot”, true?
That’s for others to judge.... But I like potential and ideas and taking a future view of things: I always find it more exciting to talk about opportunities. My job when I joined was business development. It was very clear to me that our customers were going to want to shop online. What’s actually going on is that people are using technology to completely change the way they live their lives. That creates a very different dynamic, which you either take advantage of, or you become a victim of.
Do you get stressed out?
Generally no. But I do think a lot about where we’re going and how we’re performing – and whether I’ve done a good enough job. I sleep pretty well generally. But a job like this is never finished. You never gain completion. It’s always pushing on to the next thing.
What makes you bad tempered?
What really gets to me is when people are disingenuous. I’ve got no problem with disagreements – that’s fair dos. But I get extremely cross when I basically think we’ve agreed on something, and then someone presents it in a different way. You start off in life a bit naive, don’t you? You think everyone does the right thing all the time – and then you become a little more savvy and realise it’s not quite like that.
Are you the same person at home as at work?
Yes and no. I’ve always kept the two quite separate....On holiday I always turn my BlackBerry off. I think that’s really important. Because even if you take a quick look, your mind goes straight back to work.
....But there are perhaps similarities in terms of your long-term approach to gardening? Yes, I’m still persevering with my asparagus bed. I decided the reason it wasn’t being productive was that it wasn’t getting enough light. So I took the executive decision to give the bay tree a major haircut. We’re into about the sixth year now, and I had three spears last summer. Next year is going to be the big one....