Lessons from Britain's Most Loved Retailer

by Jurek Leon

At the 4-day 2008 European Conference in Customer Management, I attended in London, one of the most fascinating case studies was provided by Andrew Macmillan a senior executive with John Lewis department stores who shared some of his learnings from 28 years with the company, eight of them in charge of customer service.

What set this apart from other presentations by leading UK retail brands such as Marks & Spencer and Boots the Chemist is that the reality of the shopping experience seemed to match the rhetoric of the company spokesperson.  That’s one of the tough things about retail, there is nowhere to hide.  Customers, including the 400 plus delegates at the conference can test out the experience every day.  And from my own experience and that of many other delegates at the conference there was scepticism about Marks & Spencer and Boots recoveries and far more goodwill for John Lewis’ consistent performance.

There is more to back this up though. In November 2007, ‘Which?’ consumer magazine had 10,963 members of its online panel rate their satisfaction with and likelihood to recommend the retailers they use from a list of 77 well-known UK stores and independent retailers.  Shops were given scores for their service, in store experience, product, price and convenience. Waitrose finished top of the Which survey in 2006, and was second behind John Lewis in 2007.  Waitrose, the upmarket supermarket group, are also part of the John Lewis Partnership.

So, what is it that sets these companies apart?

While John Lewis began in 1864 with the opening of their first shop in London's Oxford Street, the current structure for the John Lewis Partnership was set up by John Spendan Lewis around 75 years ago.  In an amazing move that sets it apart from other retailers, the company is owned by its permanent employees, all 69,000 of them.  They are partners in a business that includes 26 John Lewis department stores, 189 Waitrose supermarkets and an expanding online business.  The John Lewis Partnership has four principles:

• Ensuring the happiness of Partners is at the centre of everything we do.
• Building a sustainable business through profit and growth.
• Serving our customers to the very best of our ability.
• Caring about our communities and our environment.

In a recent interview, Charlie Mayfield, Chairman of the John Lewis Partnership, said, “Performance doesn't just mean making the most profit. It is as much about the happiness of our Partners. They power our business and that's what makes us successful, and profitable.

“We have a more balanced agenda than most other companies and because of that I believe our business model is more sustainable than where a company faces a constant battle to reconcile the opposing interests of outside shareholders, staff and suppliers.”

While Mark Price, Managing Director of Waitrose, added:
“Although we have grown rapidly as a business in recent years, great customer service and quality products remain the cornerstones of what we do. The co-owned structure of our business - with employees sharing in the profits - means that the service ethos is deeply ingrained in how we work. Our Partners know that by delighting customers time after time, they are contributing to the success of the business and will reap the rewards.'”

So, what is it that enables them to ‘delight customers time after time’?  Here are some of the points from notes I made at the conference and follow up information from the conference newsletter. 

1. Recruit for Culture
“Be rigorous with the interview process. Put more time and resource into the interview process. Recruit on personality and attitude to create a culture in which people can be themselves.”

Allowing people to be themselves? That’s a bit scary, and somewhat surprising from a fairly traditional department store chain that is ‘Never knowingly undersold’.

Robert Stephens, founder and CEO of The Geek Squad, put it well when he said, “If you’re lucky your people will feel guilty about getting paid to come to work.” 

2. Lose Control and Let People Deliver the Brand
i) “We have an identifiable, definable John Lewis experience for people and customers, but within that, people have the space to express themselves. You need to find that middle ground.’
ii) “Make the day customer-focussed not task-focussed. Constantly piling up 'things to do' focuses people on the tasks rather than interacting with the customer.”
ii) “Encourage intuition.”  Interestingly, Andrew Macmillan mentioned he was heavily influenced by the books ‘Karaoke Capitalism’ and ‘Funky Business’ by the amazing Scandinavian academics and business thinkers, Jonas Ridderstralle and Kjell Nordstrom.  For me, Kjell Nordstrom was the stand out speaker when I attended this same conference back in 2002.
iv) “Support risk-taking. Your brand becomes your people so lose control. 99% of the time they will get it right. When they don't, don't worry. Just fix it.”
iv) “Make service fun.”  It’s so easy to say, isn’t it?  But how often do you see staff  in retail stores looking as though they are having fun?  Ever heard them say, “Quick, quick, the managers coming. Look as though you’re having fun!”

3. Create a Service Culture for Managers
Andrew Macmillan said, “At John Lewis we work at creating a service culture for managers.”  He isn’t referring to serving customers on the shop floor though yes, of course, they should earmark some time to do this regularly. His emphasis was on the need for managers to see themselves as serving employees, their direct reports.

For most people, it's their direct boss who makes or breaks their day and their working experience. People leave bad bosses, not bad organisations. And they stay with good ones. Line managers have massive influence, so work on creating a service culture within the managers, where they serve their direct reports.

4. Make Time for Your Important People
i) Set the standards by coaching, example and encouragement. An 'I have time for you' leadership culture creates an 'I have time for you' culture with customers
ii) As Ken Blanchard says, ‘Catch people doing things right’. Managers are mostly used to talking to people when things go wrong. Change that.

5. Use Measurement to Change Habits
The power of habit is enormous. Once people are aware of their subconscious habits, they can fix them. This awareness is vital to an improvement culture. Measurement helps highlight changes in behaviour and habit. Here's how John Lewis does it:

i) All shops are covered with 480 mystery shops a year.  That’s 40 per store per month.  As well as these independent surveys, local mystery shopping takes place too, between stores.  Stores pair up and mystery shop each other.

ii) Consequences: “Don't hit them over the head with habits they need to change. Give them a chance to change first. When we introduce a KPI, stores have six months before they start measuring and scoring against it.”

iii) Comment cards and exit questions: Complaints are compared with appreciation each month. Currently running at 1 to 10 (complaints to appreciation).  That’s right; they get 10 compliments for every complaint!

iv) Customer focus groups are held at which customers are asked to discuss anything they want.

6. Create Legendary Stories Then Share Them
Believe it or not, John Lewis stores are actually expected to identify at least one example of a 'random acts of kindness' in their branch each month.  It’s a most unusual KPI that helps differentiate them from their competitors and create legendary service stories.  These stories are then shared thus reinforcing the service culture.  For example,

It was a frantically busy day in the lead up to Christmas at their Southampton store. A staff member was helping a lady carry her shopping out to her MG sports car.  So much shopping that she couldn’t close the little boot on the car.  He took off his tie, tied down the boot, farewelled the customer and carried on with his work.

Then there was the pregnant lady at their store in Brent Cross who didn’t think she could be in labour because she was only 32 weeks.  Panic, but not from the staff.  They arranged an ambulance.  It took half an hour, by which time a baby boy had arrived.  Later, the staff sent flowers and followed up to make sure everything was alright.  It was, and the relieved parents decided to name John Lewis Plumstead after the store.  As his father commented, ‘Thank heavens he wasn’t born in Dorothy Perkins!’  Know any other retailers that have had babies named after their store?

And finally, there’s the customer who wrote on a Comment Card, "John Lewis is my spiritual home. I've asked my husband to scatter my ashes there."

While there is much to learn from John Lewis, this is no way out company influenced and inspired by a Richard Branson type figure.  In fact, I chuckled when Andrew MacMillan opened his comments by saying, “We don’t talk about exceeding customer expectations at John Lewis.  It might be hard to get that understood by every team member in every store.  But they do understand ‘nice’.  So, we spread the message, ‘Be nice consistently’.  They know what that means.”  How very, very British!

You can find out more about this fascinating company at www.johnlewispartnership.co.uk

Jurek Leon is a speaker, trainer and consultant.  To subscribe to Jurek's FREE monthly email newsletter go to the Free Articles section of his website www.terrifictrading.com and type in your name and email address.  It’s simple and easy.  Alternatively, email Jurek at info@terrifictrading.com.