Sarah Gillard, John LewisThe above is the title for Sarah Gillard’s talk about how the renowned company has refocused itself on the state of mind of their staff.

For Sarah, she feels that to understand John Lewis you have to go back to its founder, Spedan Lewis, and why he created the company as it is.

“Back in 1909 Spedan fell off his horse, which gave him a couple of years to recuperate and think about his family business (a haberdashery set up by his father). He realised the three family members who worked in the business received more money from it than the 300 workers it employed.

“It was a time when increasing inequality was causing political polarisation and social unrest. He saw that the spoils of commerce were going to very few, built on the labour of many, and realised the dangers of that situation.

“As a natural scientist he was interested in creating a business that worked like an ecosystem where all the elements were in balance. He saw the benefits of capitalism in terms of people’s desire to improve themselves, and get the benefits from their own labour. But, also wanted to harness the energy people felt when working for the collective good — creating a community where people looked after each other, during good times and bad.

“He wanted to find a way of encouraging capitalism with a social purpose. He used his family business as a massive experiment to see if he could forge a new form of industrial democracy — one where customers, employees, suppliers and the community all work in harmony together for the collective good. We still refer to ourselves as a big experiment.”

I spoke to Sarah to discuss the culture of John Lewis and its foundation of the idea that happy partners = happy customers = more profit.

About Sarah

Sarah joined the John Lewis Partnership in 2010, following a number of years working in fashion buying and merchandising for major high street retailers. She was the Head of Merchandising for John Lewis Furniture for four years, moving to the Head of Strategy role in 2015, where she was responsible for the creation of the John Lewis Business Plan. In 2017, Sarah was appointed Director, Insight and Assurance within the Personnel function, leading the co-ordination of Personnel strategy and providing thought leadership and assurance on the development and sustainability of the Partnership model. She prefers the more user-friendly title of “Director of Happiness”.

Sarah will be discussing these idea further at this year’s Happy Workplaces Conference.

How can business be a force for good in society?

“How do you set yourself up so consumers and talent flock to you because of your purpose to make the world a bit of a better place rather than how much money you can make? John Lewis was fundamentally founded on the idea that labour should employ capital rather than capital employ labour.

“The idea that inequality is bad for everyone in the long run was a massive recognition to make back in 1909. Spedan asked how to use the principles of natural science to create a self-healing ecosystem. The sharing of knowledge, profit and power should lead to a happier and more engaged workforce, and in turn to happy customers.

Spedan Lewis was very clear: Happy partners = happy customers = more profit.” (In an extraordinary act of generosity, Spedan set John Lewis up as a worker-owned company and so staff at John Lewis are known as partners.)

“The principles he created were enshrined in the company Constitution, and begin with Principle 1: ‘The Partnership’s ultimate purpose is the happiness of all its members, through their worthwhile and satisfying employment in a successful business.’ Because the Partnership is owned in trust for its members, they share the responsibilities of ownership as well as its rewards – profit, knowledge and power.”

Creating Personal Fulfilment

“It was also always about personal fulfilment. Spedan was creating art clubs, badminton clubs, music clubs etc, right from the beginning. He was interested in the whole person, rather than just creating productive employees. He really wanted to enhance people’s lives through their membership of the partnership.

“That is still the case. We have subsidised hotels for staff, we hire out Alton Towers for a day for our people, we have over 25 clubs and societies you can join — including a sailing club with six yachts.  We even have a full-time Partner whose job is to coordinate all our music and choral societies. It’s still about personal fulfilment.”

Enabling physical, mental and financial well-being

“The partnership was ahead of its time. More than 20 years before the founding of the NHS we set up an internal health service, with clinicians who work directly with our people. We were among the first companies in Britain to have paid maternity leave.

“Now we are doing market leading work in mental health; We have partnered with The Samaritans to get managers trained on a listening course; We have partnered with another company to pioneer a mental health app, which we offer to Partners. The idea is it helps Partners focus on their mental wellbeing and take daily actions to improve their resilience — the feedback we’ve had from it has been hugely positive.

“We are probably best known for the sharing of profit. We get an annual bonus and a generous pension scheme. Plus great discounts on John Lewis and Waitrose products! Partners do financially benefit from membership of the business. But, that bit is possibly the easiest to replicate, with other companies having profit-related bonuses. The way to get people happy isn’t just by giving them more money. You’ve got to look after their physical and mental health. You need to support the community in which your business operates and your people live, the schools their children attend, local charities.”

Purpose, Learning and Judgement

Sarah talks about “Nicking with pride” and describes how they have done this with Dan Pink’s focus on Mastery, Autonomy and Purpose.

“We have converted it to Purpose, Learning and Judgement. To be happy, your work needs to have meaning. But, also the job for life no longer exist, so learning is key. We need to see re-skilling as an opportunity for joy not fear. One key area is apprenticeships, where we are doing a lot of work to encourage the concept of lifelong learning.

“Having autonomy in how you do your work is really important to [your] dignity, and to feeling you have control. It is very easy to focus on the task rather than the people, particularly in an environment like retail. However, we want to create an environment where people understand the context, what success looks like, and then work out how to achieve it.

“How we deliver is as important as what we deliver. Great leadership is about how you make people feel. The aim is to reframe leaders’ priorities from delivering results to ensuring everybody in the team is fulfilling their potential, and results will follow.

“We have articulated the outcome we want and are now working out all the ways to get there — from recruiting people who are good at people (rather than just good at delivery) to how we train them, how we reward, how we celebrate. How do we continue to attract people enthused by our purpose and remain differentiated as an employer?

“We are working a lot of this out as we go, like everybody else. The world is changing fast, and we want to make sure the core principles on which we were founded are as true for us in the future as they were in the past.”

Happy's next event

Happy's next event is Creating Happy Workplaces in Charities and Social Enterprises, a joint event with ella Forums and Happy. With speakers from Christian Aid, the social housing sector and Happy, you will learn how organisations both large and small have implemented ideas around autonomy and trust, how to help your staff work to their strengths, and how to create workplaces with a no blame culture. The conference is aimed at leaders of charities and social enterprises, with tickets available for just £95 per person.

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