John Lewis’ Co-Ownership Model and The Royal Wedding ~ Management 2.0 developing social capital

Friday 29 April 2011

John Lewis’ Co-Ownership Model and The Royal Wedding

I’m a republican. And I’ve avoided the royal wedding today by flying to Atlanta where I’m attending an unconference tomorrow.

On the flight out I’ve been reading this month’s Management Today, which includes an interview with John Lewis Partnership’s Chairman, Charlie Mayfield, and I’ve been struck by the similarities between this company’s co-ownership model, and the reasons why I’m a republican.

Co-Ownership

As Mayfield has explained in the Times a few years ago, co-ownership provides a good basis for long-term planning in business:

“Our success in that aftermath and our future economic growth will depend on knowledge-based companies working in new areas of business such as genetics and climate change technology. Such businesses tend to thrive when the people with the knowledge feel they have a stake in their future. Innovation will also be key to their success.

They will not grow into sustainable businesses unless they are built on a structure that encourages a long-term approach to investment and gives the people involved a stake in their success. The modern plc may not be it.”

He clearly sees the ownership model as one of the central planks in John Lewis’ success:

“Our constitution is most definitely not a philanthropic idea. It’s a commercial idea. A competitive idea. It’s not political, it’s about engaging people. We create a culture of ownership and people feel valued. So they perform better. That is a very powerful performance lever.”

Indeed. (The article also suggests that:

“If you stack shelves at Waitrose or sell bed linen at Peter Jones, you regard yourself as a cut above the till jockeys at Asda or Debenhams. You are the creme de la creme, with skin in the game.”)

So the suggestion is that co-ownership changes employees (‘partners’)’ perspective about their employment and employer, making them more engaged, with higher performance a result.

I think there’s a bit more too it than this. I’d suggest the main benefit of this less hierarchical approach is enhanced co-operation - that John Lewis’ people are not just in the game but are playing in the game together.

Republicanism

I probably don’t really need to explain the analogy I’m making here.

But let me just emphasise that one key difference between John Lewis and other UK retailers is that Mayfield reports indirectly to his staff (through a 70-strong council of elected partner representatives), rather than simply the other way around. It’s not too dissimilar to a Presidential political model where the populate appoints the President.

In other more traditional organisations, the boss is much more clearly on top. He (still less often she) are the corporate equivalents of our dear old queen. And employees don’t have the same sort of stake in the business that they do at John Lewis and they don’t get the same chance to ask questions, they simply need to do what they are told (as in the anthem: “Long to reign over us”).

So just as John Lewis gets improved performance from its enhanced engagement and co-operation, wouldn’t Britain (the United Republic?) benefit from giving its people (citizens not subjects) more of a stake as well?