· 6 min read · Features

Interview with Tracey Killen, group personnel director at the John Lewis Partnership

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I had been talking handbags with Tracey Killen, group personnel director at the John Lewis Partnership (JLP), for half an hour before we even started to discuss HR strategy. I am not ashamed to admit it.

To set the context, though, it has become a tradition for me to buy my mother a handbag from John Lewis for Christmas. She lives in Northern Ireland and the retailer hasn't yet reached its arms across the Irish Sea. I fondly imagine her showing friends the eagerly awaited clutch I bought her last year, boasting to them: "My son lives in London and he bought me this bag for Christmas… it's from John Lewis."

Killen is not surprised shoppers in Belfast know about the John Lewis brand. "We are finding numbers of people from Northern Ireland travelling to shop in our Glasgow branch," she laughs.

But she hints it might only be a matter of time before the retailer opens an Irish branch or two, in light of the fact JLP (Killen is responsible for the HR strategy at John Lewis department stores and grocery retailer Waitrose) is growing at a rapid pace. "We have doubled in size in the past five years," she explains. "We now have 78,000 members of [staff], with 48,000 in Waitrose and the rest in our head office or John Lewis branches."

In February, the partnership sold its 29% stake in online retailer Ocado, although still uses it to deliver Waitrose food.

But the partnership's half-year results (to July 2011) reported profits after tax of £67 million, down from £74.6 million for the same period in 2010. And, as I meet Killen in December, the department stores reported sales of £98.7 million for the previous week - a 1.2% decrease on figures from the same week in 2010.

The news came just days after Arcadia (owner of Topshop, Evans, Dorothy Perkins and Burton) announced it was to close 260 branches and weeks after Marks & Spencer announced half year results (to 1 October 2011), revealing its underlying profit before tax had dropped by more than £33 million to £315.2 million, from £348.6 million.

Nonetheless, the John Lewis department store division had reported a 15.9% increase on trade from the previous week, when I met Killen, partly because of the influx of Christmas shoppers - and partly due to that advertising campaign, with the little boy counting down the days until Christmas and then giving his parents a badly wrapped present.

The organisation spent £6 million on the campaign, which the Evening Standard said 'made even the hardhearted a little moist-eyed' and 'showed up the flashier offerings of its rivals with its understated charm'. John Lewis said campaigns put £4 in the till for every £1 spent.

Killen says the campaign has done her a lot of favours. "The ads helped make our brands accessible," she says. "They touch on the zeitgeist and make our brands more humane. This year, we have had more graduate applications than ever." She takes a deep breath. "It is challenging, though… Christmas is challenging. It has been a warm autumn and the crisis in the Eurozone is certainly making UK spenders less likely to part with their cash - trading has been slow and shoppers are just not in the 'Christmas zone' yet.

"But the snow hit this time last year - so we have softer targets this December. Our shops are looking great; operationally, we are in great shape. I just wish it was a bit colder to attract winter shoppers."

But with January sales looming as HR magazine was going to press, Killen is under no illusion it will be easy going. "The next period will be tougher for retail," she admits. "But our business model helps us not to have to take a short-term approach. If we focus our efforts, the business will grow efficiently - we have been safe and well for 100 years."

The business model Killen alludes to is what has put HR (or 'personnel', as it is referred to, in a bid to "not objectify" its people) central to board-level conversations. Andy Street, Killen's predecessor as personnel director, is one of the few HRDs in the UK who has made the jump to MD, now heading the department stores branch of John Lewis.

The partnership is held by a trust for the benefit of the people that work there. All the company's permanent staff are known as 'partners' and own 35 John Lewis shops across the UK (29 department stores and six John Lewis At Home), 271 Waitrose branches, an online business, (www.johnlewis.com), a production unit - and a farm, which Killen describes as "the Ritz for cows".

The mission statement says: 'Partners share in the benefits and profits of a business that puts them first.' Killen adds: "There is quite an unusual nature to the organisation, in that we have five elected directors on the board and a group of 80 'partners' in a council who hold the chairman to account. This strengthens the company and gives 'partners' a voice."

"The ultimate purpose of the organisation is the happiness of its members - we communicate this to staff and it drives a different imperative and has given the personnel department a stronger voice. It's a holistic circle: if we invest more in our partners, the business will be successful.

"This is underpinned by how the business is set up and puts the personnel department at the decision table - the commercial team will involve us."

As group personnel director, Killen - a 'lifer', after joining as a trainee in 1982 straight from school - is one of only two women appointed rather than elected to sit on the partnership board, reporting directly to the chairman, Charlie Mayhew; the other being Marisa Cassoni, director of finance. Laura White, John Lewis' personnel director, and Rob Collins, Waitrose's personnel director, both report into Killen and they meet regularly.

Killen's role is to focus on the strategy for the group, although she freely admits her board post is "not a given". There are 100 members of staff in group HR and while running the usual HR functions, they also manage the five hotels for staff and their partners and the various leisure clubs JLP provides. Last year, it invested £70 million in non-financial employee benefits.

And employees seem to enjoy working there. One post on gradjobsuncovered.com, said: 'I love the people I work with. John Lewis seems to be able to recruit staff that work extremely well together.' Killen demurs: "The perception of the partnership is that we are 'cuddly and nice', but we are flipping good retailers, running two compelling brands. The economic uncertainty has led to a 'new normal' for retail. Our structure and our model still have to add value to the business." She admits that, previously, the HR systems in the company's divisions had "not been consistent enough" and is working to develop stronger synergies between the partnership's 'value chains'. She says: "There should be no 'initiatives'. Everything should be aligned. As we grew, it was like a house, with a whole lot more people suddenly living there - so it is hard to cope and be confident. It is as if a massive extension has been added onto a building and we need to make sure the plumbing and electrics - the things you don't see [for example, HR] - are working. This is hard for HR. I believe in keeping things simple and minimising complexity." And Killen doesn't underestimate the importance of the operational role of HR, as well as its strategic ambitions.

"I have an operations dimension to my own role," she says. "Nobody working in HR can just 'voyage' - you have to make an effort to win confidence. If you can unlock the operations imperative, and 'do' HR actively, you can create a story and then use it for conversations."

Is Killen optimistic for the medium-term future? "I am confident about 2012," she explains. "We have built two new shops at the Westfield shopping centre in Stratford [beside the Olympic park]. London has made a commitment to host the Olympics - within budget - and has so far delivered really well. We shouldn't lose sight of this achievement and take confidence from this. We shouldn't underestimate the value of the Queen's Diamond Jubilee."

In a bid to engage staff with the Olympics, JLP has appointed former Olympic champion, Sally Gunnell, as the ambassador of its Partners in Sport programme - an employee and community engagement initiative. She will promote the importance of a healthy lifestyle, as well as using her own sporting experience to inspire and guide staff in overcoming individual and team challenges up until August next year. Gunnell has already played an active role within the Partners in Sport programme. Killen herself is training to take part in a sponsored treadmill run on the shop floor of the Oxford Street branch.

And for the partnership, Killen predicts a more focused and calculated strategy for HR and the business. "No business has a right to exist," she says. "But because we are not publicly quoted, we can afford to be free of short-termism. We won't jettison our longer-term strategy of efficient growth, but we can magnify our focus.

"It is going to be an exciting year - bring it on."