In an article I wrote for HR Magazine on the occasion of her appointment in 2020, I asked - ‘What are people at John Lewis and Waitrose to make of the appointment of a new chairman who lacks the retailing skills that many will have acquired over many years in the organisation?’
The answer comes in the partnership’s loss of £234 million last year and, flowing from this, its scraping of the annual staff bonus in March this year, the second time in three years.
White blamed inflation and the shift towards online shopping for the group’s underperformance but rival Marks and Spencer bounced back with results beyond expectations in May this year.
What HR can learn from customer experience
It seems that she made the fatal mistake made by M&S CEO Sir Richard Greenbury in the late 1990s of allowing skilled and knowledgeable staff to leave.
Yes, his policies produced pre-tax profits of £1 billion in 1997 but by 2001 these had tanked to £140 million. The back story? The gains had been made through the loss of people from the payroll, a loss the depleted the know-how and tacit knowledge in the firm.
For a retailer that provided itself on its quality product, this was a disaster. Retailers with a mission to deliver quality should never forget that a quality product relies on having quality staff to sell it.
This was the fatal flaw in White’s policies. Offering voluntary severance deals to experienced staff, the very people that customers relied on for detailed product knowledge, denuded the firm of the knowhow that customers expected in purchasing premium-priced products.
Her avowed commitment to customer service, repeated in March this year, was destined to failure with her policies of losing experienced staff; stopping all telephone contact with in-store departments and shifting telephone contact to an offshore call-centre in Tunisia.
Customers buying premium products expect premium service and White followed in Greenbury’s footsteps in forgetting this.
Can HR add value to the customer experience?
Someone schooled in organisational psychology would have known this but White’s background in traditional economics may have shielded her from the insights concerning behavioural economics that earned Daniel Kahneman, a psychologist, a Nobel prize in economics in 2002.
He reminded us of the way that biases underpin decision-making, with confirmation bias as just one of these. Trading experienced staff for less experienced staff will likely result in decisions that confirm biases, and leave problems unresolved.
An example serves to illustrate this. In June this year, I purchased a mattress from John Lewis and am still awaiting its delivery, five months later. The reasons for the delay?
The mattress is available in two tensions, one regular and one firm and is displayed as part of a double mattress, with only the labels distinguishing the two tensions.
When I queried the correctness of the labels, I was directed to go to verify them by going to another store and on doing this, I reported that the labels in the second store were labelled in a reverse fashion (so the second store had the ‘firm’ side on the left of the double mattress while the first store had it on the right). The customer could rightly ask which of the two sets of labels was correct.
On reporting my findings back to the first store, no action was taken and after months passed by, I eventually contacted the manufacturer who confirmed a labelling error in the second store.
Confirmation bias in both stores stopped the staff from engaging with this issue, with the expertise not there to question the rightness or wrongness of a particular label. As one salesperson in the bed’s department told me, even the staff in the call centre were earning more than he was.
There is still a place for premium products – quality endures and many will still seek out quality products – but HR policies must support this. This demands a leadership style that allows the elements of self-determination theory – autonomy, relationship and achievement – to flourish since good customer service flows from empowered and skilled employees. Not from disempowered, unskilled staff.
So, when the board meets to discuss White’s replacement, priority should be given to someone with an in-depth understanding of the people side of the business.
Gloria Moss is an experienced HR professional with a track record as head of training in blue chip companies and a professor of management and marketing, and author of Inclusive Leadership.
