John Lewis Partnership
The John Lewis Partnership (JLP) is one of the UK’s most successful retailers. All 91,000 permanent staff are Partners who own 42 John Lewis shops across the UK (31 department stores, 10 John Lewis at home and a shop at Heathrow Terminal 2), 328 Waitrose supermarkets, catalogue business and online businesses johnlewis.com and waitrose.com, a production unit and a farm.
Sales at JLP grew by 9.3% and operating profit by 15% in the year ending January 2013. Its success owes much to the co-ownership values of its founder, John Spedan Lewis, who handed control and ownership over to the employees in two trust settlements in the last century. The first settlement, in 1929, set up the current partnership and enshrined the principles of profit sharing. Financial control of the business was handed over at this point, but not in the form of a gift – the deal gave Spedan Lewis the right to be paid back for the ordinary shares he handed over. In 1950 the Founder handed over ultimate control to a Trust that owns the entire Partnership for the benefit of all its employees.
JLP is one of a handful of companies to have a written constitution. Uniquely the JLP constitution places the happiness of its Partners (employees) and worthwhile, satisfying employment at the heart of its successful business. The constitution also sets out the partnership’s democratic governance system. This includes the direct election of Partner representatives to the company’s board and a Partnership Council. The Partnership Council comprises Partner representatives from across the business. Its role is to hold management to account and to act as a sounding board for employee opinion.
JLP reaps the benefits of employee ownership by sharing ‘knowledge, profit and power’. Partners are more engaged in the business, they know that their opinion matters, and they are able to feed their views to management through the formal democracy bodies and through the company’s weekly magazine, and they know that they will be rewarded for their effort. The Partnership’s profit, after reinvestment, is distributed to Partners. In March 2013 this amounted to 15% of salary, or nine weeks pay, for every Partner. Put simply, ‘its their business’.