Sunday 10 January 2010

Smelling shared success on the high street

It's a co-operative where every staff member is a "partner", where the emphasis is on sharing profits and taking part in decisions, rather than just reacting to management demands. And here's the surprising kicker -- the Telegraph loves it.
Today's Telegraph story takes a gentle meander around why John Lewis has recorded a huge annual profit with sales up 15% year on year over Christmas, doing far better than the average store. The Telegraph says it is because "we can't get enough of this most British of institutions".
But this department store chain is doing something different to most British institutions when it comes to treatment of its staff and customers, and perhaps that's why in a recession people have decided that is who they want to trust with their purchasing. In difficult times we want safe and reliable.
Interesting in this age of contemplation of bankers bonuses and pay gaps to take a long view back to John Lewis founder John Spedan Lewis who was shocked to discover that his, his brother's, and his father's earnings added up to the earnings of all his employees. He then committed to putting in place shorter working hours for staff, longer than average holidays, better housing and staff committees. Using these practices Spedan Lewis managed to turn around the failing Peter Jones shop and turn around a profit. Fellow social entrepreneur George Cadbury forged the biggest chocolate manufacturer in the world following similiar principles.
But times have changed. Companies no longer believe they need to take an interest in staff welfare, or do they? Staff at John Lewis are still offered educational subsidies so they can take evening classes and improve their knowledge as well as discounted holidays at five centres around the UK, and subsidised food so they can get a hot lunch during the day at an affordable price.
The department store is based on the idea of shared benefit across all employees and employee happiness, not just profit and loss.
While the idea of employee social benefits remain in countries such as France and Germany, these ideas have largely been stripped away in UK's workplace economics as unnecessary fripperies of little value.
But John Lewis has managed to hang in there. It has also hung on to the idea of customer service and sturdy pricing. It clings to the idea of having trained staff with knowledge about products who are allowed to talk to customers for longer than a minute or two without having to click up a sale. It has long been famous for offering solid, safe service when things go wrong and continually wins awards from Which? for this.
But offering customers advice cost time and money, and in the noughties many business leaders concluded that modern shopping was based purely on price and very little else, so they weren;t willing to pay for any excess.
Could it be in a recession what we the public want is to feel reassured that when we spend our hard earned money we want something of value in return? We want to trust the people who are selling to us not to rip us off, to offer us decent advice, and to be there to help when something goes wrong in the future.
It all sounds rather idealistic, doesn't it? A bit like Spedan Lewis's vision. And competing high street retailer Dixons obviously doesn't think this is where the public is at.
Dixons has been running an advertising campaign over Christmas which suggests that its customers should head off to an unnamed store (quite obviously John Lewis) to ask its expert staff for advice to find the perfect product, then pop down to Dixons to make a purchase. Not sure who thought up this humdinger of a campaign for Dixons -- but it shares with us the idea that Dixons thinks its staff don't know much about products and that their customers should go to other stores for that. Nice one.
Trust Dixons after that ringing self endorsement? No, thanks.

1 comment:

Newmania said...

Both premium service and budget service work as models.Free markets encourage solutions to all problems and needs. This is all a so what,
People that imagine mutuals are the furture tend to think of static economies , not start ups where you are asking people to take the risk , privide the idea the capital and the skill and then , as they expand , share the rewards .

Not likely is it , there are partnerships and so on , of course but they still have employees.