· 2 min read · Features

'Outstanding' results for John Lewis – proof that people principles can pay?

Published:

The John Lewis Partnership (JLP) has declared “outstanding” Christmas sales against a backdrop of weak consumer spending - total sales for its department stores were £596 million, 9.3% up compared with December 2010. year.

This is quite an achievement in a tough economic climate, and a testament to JLP's unique leadership model and strong values.

Many business leaders and many organisations aspire to authenticity, democracy, devolved leadership, transparency and openness. JLP and its leadership have long embodied all of these attributes - and outperform most of the competition. As many organisations struggle to increase levels of employee engagement, many JLP partners (as all employees are known), openly say how proud they are to work for the organisation they jointly own. The high level of trust within the business extends beyond it to its hugely loyal customer base. JLP leaders and all partners connect to the organisation's values, which in turn helps them connect to each other and to customers.

JLP is famous for its guiding principles. The partnership's ultimate purpose is 'the happiness of all its members, through their worthwhile and satisfying employment in a successful business' - a principle at the very heart of employee engagement. Partners share the responsibilities of ownership as well as the rewards. The JLP principles underpin its authentic, open and honest leadership.

Interviewed in this month's HR magazine, JLP group personnel director Tracey Killen says that because the business is not publicly quoted, it can afford to take a longer-term focus than many of its competitors. JLP has a unique culture, which engages partners and customers alike. Its focus on building this unique culture and distinctive brand has led to sustainable success. All 76,500 permanent staff are partners who own the business and its five elected board directors are supported by a council of 80 partners who discuss strategy and objectives and make key recommendations. This combination of shared leadership and authentic values is central to JLP’s success.

Even though managing director Andy Street predicts a challenging year ahead, it is likely that JLP will meet any challenges successfully. The main way it does this is by involving partners wholeheartedly in strategy and decision-making. This does not mean that every decision is voted on, as this would reduce the level of agility a successful retailer needs. However, the executive is held accountable by the partners' council, and open debate is encouraged. Because of this, employees across the organisation tend to feel fully engaged. They are more willing to accept tough decisions because they have a high level of involvement in decision-making. They are also much more likely to contribute to successful solutions and maintain high levels of customer service during tough times. Andy Street recognises that this great service is key to success.

All JLP staff share in the profits of the business, which can make for quite a significant salary boost. Interestingly, the chairman's salary is firmly capped at 75 times the average wage of JLP's lowest earners, and Andy Street's reputed £500k places him way down the executive-pay leaderboard. Street however, has said that he firmly believes his job is more fulfilling than the jobs of many of his competitors, and that he was attracted by the JLP 'magic'.

JLP has had its fair share of criticism. Some find it too formal, too bureaucratic, too frumpy. However, there is no doubt that this most British of organisations is in many ways one of the most forward-thinking and innovative on the UK high street. Maybe more leaders and more organisations would benefit from a little JLP magic.

Nicky Little, head of leadership development, Cirrus