John Lewis Partnership: A Unique Business Model
The John Lewis Partnership: A Unique Business Model
The John Lewis Partnership is one of the UK’s leading retail businesses. Colin Goepfert is the Learning and Development Coach at John Lewis. The John Lewis Partnership came into being in 1950.
We’ve now got in the region of 78,000 people who work in the John Lewis Partnership. It includes about 32 department stores up and down the country, over 250 Waitrose supermarkets, plus our Internet business. We have a production unit up in Lancashire, near Blackburn, and also we have a farm of about 4,000 acres in Hampshire, where we grow and produce a lot of the milk, apples, and mushrooms that we sell in our Waitrose supermarkets.
Partners, Not Employees
We have partners; essentially, most other businesses would refer to them as employees or staff. We call them partners because they are all partners in the true sense of the word. They all have responsibilities and share in the benefits of our business.
That doesn’t mean when they join us on day one they get one share of John Lewis. It means at the end of the year, when we’ve worked out our profit for that year, every partner would receive a proportion of their annual pay as a percentage. So whether you’re a Saturday-only partner or the chairman, you would all receive the same percent of your pay as your bonus. That’s almost like the dividend that you would get if you were a shareholder in another business.
We call them partners because they all have a part to play in our success and sharing that. Like any business, we have to be successful and therefore we have to make a profit. Because we don’t have any external shareholders, we don’t have to produce a dividend to keep other people happy. We have to make the profit, and we want the profit to be sufficient to enable us to continue doing what we do.
And what we do is to look after our partners in the terms of the employment and the benefits we offer. Because we believe that if you look after the partners, they will therefore look after the customers. Look after the customers, they will look after your profit. And we have what we call the partner-customer-profit cycle, and that’s what we live and work to.
Measuring Success
Other ways that we kind of measure our success, obviously, is turnover, because the turnover feeds directly into the bonus. But we also look at the feedback we receive from outside bodies – Which reports, Verdict reports, the customer service groups that are available – and we regularly, between John Lewis and Waitrose, feature in the top two or three companies for those, again for us really important.
We like to always pay the best rate for the right level of performance. We’re constantly looking at what we call the market rate, which is what the going rate for a particular job is, but within our pay structure every partner has the opportunity to work their way up.
Partner Benefits
We have a very comprehensive training package called Horizons, which has a huge amount of resources, courses, books, videos, DVDs, and coaching sessions that partners can sign up for to help them achieve the best in their performance. We have the bonus that we’ve mentioned earlier which was last year about 18%. We also have in all of our workplaces subsidized dining, a minimum of four weeks paid holiday, rising to six weeks after ten years, we have a final salary non-contributory pension scheme. We offer something called long leave – after 25 years of continual service, a partner can actually take 6 months off, fully paid, to just go and get away from their normal work regime and just experience something different.