JOHN LEWIS: AN EXPERIMENT IN KINDER CAPITALISM
For years the company has promoted a form of ‘caring capitalism’, putting its employees first. How has this model fared in the era of ruthless retail? This article is from Communicate magazine's print edition.
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Following the death of his father in 1864, John Spedan Lewis formalises the partnership “experiment”. John Lewis’s profits would be shared among all employees. Managers would be accountable to the staff via a council of elected representatives. Staff could also air their complaints in an in-house newsletter, The Gazette. |
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The partnership’s sales and profits were at times growing by double digits. |
Bonuses hit 20% of salary in 2008, meaning partners received more than two months’ extra pay. When the financial crisis hit, John Lewis initially promised “no job cuts”.
Then-chairman Charlie Mayfield says: “We work very, very hard to make people who work in the organisation feel valued. Hopefully, they’ll work better and harder and give better customer service. And we will be a more profitable business as a result.”
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Former Waitrose managing director Mark Price says he joined the partnership “because it had two golf courses and five ocean-going yachts”. |
Managers insist staff benefits, such as shopping discounts, salary pensions and holidays on company estates, inspire loyalty and commitment.
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The company hasn’t been able to pay bonuses to its partners, i.e. staff. Mayfield decides to axe the brand’s generous staff pension arrangements. |
Sharon White becomes chair, raising eyebrows due to her lack of retail experience.
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White says the company is going through the “greatest scale of change” in its 157-year history. John Lewis, she says, “cannot stay only a retailer if we’re to maintain ourselves as a financially independent partnership over the next 20, 30, 40 years”. |
The move comes as a huge shock. With no profits to share, and with thousands of staff made redundant, the partnership model is losing its shine and staff morale is dampened.
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Traditionally a company of lifelong employees, White replaces longstanding members, such as Patrick Lewis, the founder’s great-grandson and the retailer’s finance director. |
In 2021, none of the partnership’s seven top managers was in their role two years ago.
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John Lewis becomes the first major UK retailer to offer shared parental leave for all employees. In an interview, White says: “This hasn’t been lots of slideshow presentations about retail margins […] a lot of the conversation has been about purpose.” |
Amid fierce competition with online retailers, the retailer drops its ‘never knowingly undersold’ pledge, showing a real crisis of what it means to be John Lewis.
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The decision is met with fierce backlash which culminates in an annual meeting with partners. White wins a vote of confidence over her vision for the future but loses the vote over the performance of the company in the past year. |
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White is set to be replaced by a team with more retail experience, including her replacement Jason Tarry, who oversaw the turnaround of Tesco. |
Despite its challenges, the employee-owned structure has remained and stood the test of time.
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In an interview, White says: “[Spendan] talked about [how] to properly be a partnership, you must be efficient. And I think we got a bit less hungry. |
“I think we maybe just lost sight of the fact that we were an experiment that still needed to be worked at.”
