Sir Charlie Mayfield, chairman of the John Lewis Partnership, will be speaking at our Economy Business Breakfast on Thursday, October 12. Prior to his visit, we spoke to Sir Charlie to get his views on the opportunities and challenges for businesses in the modern economy:
How do you approach strategy and decision making during such an uncertain period as the one we are currently in?
“The John Lewis Partnership is in a rather unique position compared to other PLCs due to our employee-owned business model. This means that the Partnership can take a long-term approach to decision making which we have done through our It's Your Business 2028 strategy.
“There are of course a number of policy decisions to be made by government, not least our future relationship with the EU. While it is true to say that this increases the level of uncertainty felt by business, it’s now critically important that government addresses some of the most pressing practical questions arising from the renegotiation, such as the type of future customs arrangement we’ll have with the EU.
“While the Brexit negotiations will undoubtedly be a major challenge and likely the prime focus of our government over the next five years, I believe that perhaps an even bigger challenge facing the British economy is how we address our sluggish productivity growth.
“Improving productivity is something which is within our control. While the UK has some high value, highly productive firms, we also have a far longer tail of low productivity firms - much longer than countries like Germany. The way in which we change this is through changes in things such as management practices and leadership capability. That is why in July we launched the Productivity Leadership Group and the Be the Business campaign which aims to help businesses understand how productive they are and provide them with some practical tools to boost their performance.”
How do you stay true to your values in a rapidly changing world?
“The Partnership is a business built on the principles set out by our founder, John Spedan Lewis, and therefore staying true to our values are extremely important to us. In fact we are one of the few businesses to have a written Constitution! However, we are also a business active in possibly the most competitive industry in the UK, the retail sector.
“Our sector has been at the vanguard of technological change and the advance towards automation. I think it’s important for businesses to be honest about the scale and the pace of change that we’re seeing. Honest with those it serves and those who depend upon it for employment. We have been clear that the increase in automation in the retail sector will lead to fewer jobs in the future but the way in which we handle this challenge will reflect our businesses values and we are investing significant funds into retraining Partners for the new roles which will emerge as we enter a new age.”
How do businesses’ retain their customers in the face of disruptive innovation?
“I think the key to success for any business, no matter the period of disruption it is operating through, is to stay true and steadfast to its underlying principles. Of course, businesses must move with the times and adopt new technology but if a business is built on a strong foundation where there is a clear market for what it sells then any technological improvement must complement that and not seek to supersede it.
“That said it’s vital, especially for long term businesses, like ours, to anticipate trends. In the case of the internet we started early and stuck at it. We didn’t know how big this would be, but felt sure our customers would embrace technology. Now 40% of our sales are online and our shops remain key to our brand experience, customer service and total sales.”
How do you make your employees really care about your brand?
“People inherently take more care and a more active role in any activity when they feel that their opinion is respected and where they have an opportunity to influence the direction of travel. I think that this is true in business and that companies should look at innovative ways for engaging with their staff.
“Of course one model which promotes this ethos is employee ownership, which is the model the John Lewis Partnership has been operating under for almost 90 years. I believe you can draw a correlation between our ownership model and the service that our customers receive.
“We are not the only company to notice this and indeed since 2010 there has been a 60% increase in the number of employee owned businesses, supported by a number of policy changes from government designed to support the sector. Statistics from the Employee Ownership Association show that there is a clear link between the employee ownership model and a firm's productivity.”
To hear more from Sir Charlie on this topic, book your place at the Economy Business Breakfast today.