John Lewis is chain of upmarket department stores operating throughout Great Britain. The chain is owned by the John Lewis Partnership. The first John Lewis store was opened in 1864 in Oxford Street, London. All permanent employees are Partners in the business.
The chain is known for its policy of "Never Knowingly Undersold" which has been in use since 1925.[1]
There are currently 32 stores throughout England, Scotland & Wales, including four new ‘At Home’ stores, with a further two opening late 2011. The store in Cardiff is the largest currently operated by the Partnership outside of London.
On 1 January 2008, John Lewis Oxford Street was awarded a Royal Warrant from Her Majesty the Queen as suppliers of haberdashery and household goods.[2] John Lewis Reading is also the holder of a Royal Warrant from the Queen as suppliers of household and fancy goods, received in 2007.[3]





CONTENTS

Introduction
The Partnership
Pay
Employees (Partners)
Directors
Allocating the Surplus
Reserves
Organisation
Central Council
Central Board
Chairman
Controlling the Style of Management
Performance
Notes <..> and References {..}
Relevant Current and Associated Works

Relevant Subject Index Pages and Site Overview




INTRODUCTION

John Lewis Partnership with 23 department stores and 112 supermarkets is successful and expanding. It operates a good profit-sharing scheme combined with a form of open management. This study looks at its profitability, at the extent to which it serves its partners and at its way of managing.

The study is one of a series of eight studies of co-operatives and mutual societies which were undertaken to determine causes of failure and reasons for success, to see how these enterprises were controlled and managed, to learn from the mistakes of others. What is taking place is fascinating and often unexpected (See 'Relevant Current and Associated Works').

The main report 'Co-operatives: Causes of Failure, Guidelines for Success' is based on these studies. Its conclusions and recommendations are entirely relevant and cover fundamental and practical problems of co-ops and mutual societies, of members, of direction, management and control (See 'Relevant Current and Associated Works').



THE PARTNERSHIP

'John Lewis Partnership plc', commonly referred to as 'John Lewis'. In 1995 it had 41,100 partners, 23 department stores, 112 Waitrose supermarkets, a turnover of GBP 2.8 bill and pre-tax profits GBP 150 mill.

John Lewis is a public limited company (PLC) which apparently belongs to its employees as a group. This is collective ownership and employees are referred to as partners.

Management needs to run the enterprise in the interests of all partners 'past, present and future'. A good employer. Well looked-after employees (partners), contented and well motivated, giving helpful and friendly service. Employees receive each year a share of the profits which is paid out as a cash bonus.

Large and competitive, aiming to provide good service and value for money. In practice applying its slogan 'Never knowingly undersold' to the point where partners receive a small reward when they point out that a competitor charges less than John Lewis.

The John Lewis Partnership seems to provide good conditions of employment and reward for partners and provide its customers with quality goods at competitive prices combined with excellent service. It is successful and expanding successfully as a result.




PAY



EMPLOYEES (PARTNERS)

John Lewis' policy is to pay employees the local commercial rate plus a degree of performance salary. <1>

The annual cash bonus is the partner's profit share and makes much difference. Based on the Partnership's Report and Accounts 1996 {JOL 01}, the average wage or salary received by a partner working full-time was GBP 12,000. Partners received a bonus of 15 per cent for that year which brought the total to GBP 13,800, an increase of 6 per cent over the previous year. <2>



The rate of pay needs to be seen in the context of the UK's present employment climate of severe unemployment, widespread poverty and increasing differentials between rich and poor. Low-paid workers work more hours each week than in most other European countries and many do not earn enough to exist adequately. The government has been supplementing inadequate incomes by 'income support' benefits, in effect subsidising profits of employers who pay workers below-existence wages, instead of legislating a legally enforceable minimum wage. A kind of Victorian workhouse climate in the workplace.

So a bonus of on average GBP 1,800 makes much difference.



DIRECTORS

Pay is pay, no matter what it is called. There is no difference between pay, remuneration or emoluments as long as we include all direct and indirect pre-tax payments and services received from the employer.



The Board of Directors is headed by a Chairman whose pay is stated separately. In addition there is the Deputy Chairman and five directors appointed by the Chairman. Then there are five directors nominated annually by the Central Council. <3>



The company's published 1996 accounts, on which most of the figures given here are based, can be used to estimate some interesting figures.

The Chairman received GBP 343,500, an increase of GBP 41,200 or 14 per cent over the previous year. He received 25 times the average pay earned by the employees, up from 23 the previous year. The increase he received in this one year is the amount earned by one employee working for three years.

The top six directors are presumably the Deputy Chairman and five other directors. They received an average pay of about GBP 211,700, an increase of GBP 28,300 or 15 per cent over the previous year. They received 15 times the average pay earned by the employees, up from 14 the previous year. The increase they received in this one year is the amount earned by one employee working two years.

There is a curious discrepancy between the bottom five directors and the top six. The bottom five directors received an average pay of about GBP 62,500, an increase of GBP 4,000 or 7 per cent over the previous year. They received 4.5 times the average pay earned by the employees, just like the previous year. The increase they received in this one year is the amount earned by one employee working for four months.

One is tempted to assume that the bottom five directors who pay-wise form a separate group are those nominated by the Central Council.



The chairman reports that the Partnership does not pay directors' fees, that 'all members of the board are paid a full-time salary for their role within the business' and that salaries 'have to be in line with market rates'.

The term 'role' is open to misinterpretation. Are all directors working full-time for the partnership? I think it would be hard to justify a salary of say GBP 200,000 by market rates for professional work.

If the higher rates are based on 'market rates' for directors one has to remember that the market rate for directors is generally what the market will bear. The market rate for directors is the maximum amount shareholders will not object to or can be persuaded to pay {JOL 04}. Such a criterion would seem inappropriate in an enterprise which aims to benefit all its members.

The figures given and discussed above are listed below:

Pay or Average Pay Increase Increase Pay Ratio
(GBP pa) (GBP) (Per cent)


Chairman 343,500 41,200 14 25

Top Six Directors (Deputy Chairman and Directors appointed by Chairman?) 211,700 28,300 15 15

Bottom Five Directors (Directors nominated by Central Council?) 62,500 4,000 7 4.5

Employees (Partners) 13,800 740 6 1


Consider the increases given to the Chairman and the top six directors. Given that this is a partnership which is intended to be run for the benefit of all its members, it would seem difficult to justify pay increases of 15 per cent to directors and 6 per cent to the workforce, or an increase of GBP 41,000 at what is already the top end of the scale compared with GBP 800 at the bottom end.



But you may argue that as the enterprise expands so responsibility at the top grows and that it is this which is being rewarded, while the work done by employees hardly changes, it being the number of employees which increases as the enterprise expands.

But having responsibility means being accountable for work done and the above argument assumes that success depends on top-level decision-taking. But it is what is being done at the lower levels which underlies success.

Or a bit of both. That is, teamwork and partnership.

But then the question needs to be asked whether such differentials are either reasonable or fair and why they are increasing at such a rate, why those at the top are gaining so much more compared with other partners.



ALLOCATING THE SURPLUS

It would seem that the partnership's constitution lays down investment criteria which determine how much of the surplus is reinvested in the business and how much is distributed among partners.

Retained profits show up as having been added to reserves. Partners' annual bonus is their share of the profits.

For 1995 after-tax profits were GBP 121.2 mill. GBP 64.2 million was retained in the business. Partners received GBP 57 million which meant that each partner received a bonus (profit-share) which in that year amounted to 15 per cent of annual pay. {JOL 01}

So 53 per cent of net profits was added to reserves and 47 per cent received by partners:

GBP mill Per cent
Allocated to Partners 57.0 47
Retained in business 64.2 53
Total after-tax profits 121.2 100


RESERVES

'Net assets' is what would be left for distributing among shareholders in a plc, that is in a public limited company, after selling all its assets and paying all its debts. The net assets employed in 1995 were GBP 952 million. <4>

And assets are increasing each year as more and more profits are retained within the business. Added to reserves were
1993 42.3 GBP mill
1994 51.1
1995 64.2
Total employees, weighted for part-timers, is 31,000 <4>. So net assets per employee are GBP 30,700.



ORGANISATION

Here we are trying to get a view of how the Partnership is organised {JOL 02} and of the relative responsibilities and accountability of its key component parts. These are
Central Council
Central Board
The Chairman of the Partnership


CENTRAL COUNCIL

Employees are known as partners and elect representatives to a local branch council and by secret ballot to the Central Council.

The Chairman of the Partnership appoints up to 20 per cent of the Central Council's members, usually from senior management.

The Central Council has about 135 members and usually meets six times a year. It debates countrywide issues.



"The Council can discuss any subject whatsoever and make to the management any recommendation it likes. The Chairman of the Partnership cannot reject a recommendation from the Central Council without consulting the Central Board." {JOL 02}

The Central Council meets only six times a year and 'recommendations' and 'consultation' are not binding. Apparently it is the Chairman who takes key decisions.



However, the Central Council safeguards the Constitution of the Partnership and can at least in theory remove the Chairman.

Also "No alteration to the Articles and Rules of the Constitution can be made without its (Central Council's) agreement." {JOL 02}

And the Central Council may remove the chairman but only if 67 per cent of its members (which could mean 84 per cent of its elected members) want him replaced.



The Council each year nominates from its members five directors (out of a total of 12 directors) to the Central Board.



CENTRAL BOARD

The Central Board of 'John Lewis Partnership plc' consists of the Chairman who is also the chief executive, the Deputy Chairman, five directors appointed by the Chairman and five directors nominated annually by the Central Council, a total of twelve directors.



It is usual for a chairman to be elected by his fellow directors from among themselves. But here the chairman is appointed by the previous chairman.

The Chairman is in a position of authority and has much power. I feel there is likely to be little disagreement with his views in the Central Board.



"Under the Constitution, the Central Council's nominees are entitled - if a minimum of three so wish - to require the Board to consult the Council in three sets of circumstances {JOL 02}:
redundancy involving more than 12 Partners,

the contraction of the business by liquidation of more than 5 per cent of its fixed assets,

or the expansion of the business by more than 5 per cent of its capital other than by accumulation of profits."



CHAIRMAN

The chairman is appointed by the previous chairman and, in turn, will appoint the next chairman of the Partnership.

He appoints five directors to the Central Board and up to 20 per cent of the Central Council members (usually from senior management). He also appoints the Partnership's senior executives.

The Central Council may remove the chairman if 67 per cent of its members (which could mean 84 per cent of its elected members) want him replaced. It is unlikely that such majorities could be mustered under any but extreme circumstances, and this may be what is intended by this provision.

As said already, the Chairman is in a position of much authority and has much power.



So what is the source of his authority?

Ownership and control of the holding company John Lewis Partnership plc, and thus of the Partnership, are held in trust by John Lewis Partnership Trust Limited. The Chairman and Deputy Chairman of the Trust Company have to be appointed to the Central Board as Chairman and as Deputy Chairman. {JOL 01}

In the Trust Company, the only person who can vote is the Chairman. In other words, the Chairman controls all voting shares, is in complete control. The only exception is if the Central Council wishes to replace him by a specified big majority. {JOL 02}



So it appears that ownership and control are vested in the single person of the Chairman as Trustee.



CONTROLLING THE STYLE OF MANAGEMENT

The group produces a national magazine (The Gazette) and local magazines (Chronicles), and states that

Anyone can write to the group's national or local magazines ... signing the letter or anonymously. All anonymous letters must be published unless publication could harm the organisation. Absolute anonymity is rigorously protected - an effective way of calling management to account. {JOL 01}

... staff are allowed by the constitution to write to and complain completely anonymously in the columns of the in-house newspaper about ... management. Anonymity is guaranteed. Letters must be replied to 'honestly'. {JOL 03}

You can have an unskilled job in a store, write the most awkward letter to the chairman, and he must reply to it honestly. {JOL 03}



It is this simple provision which has given the group's employees an effective influence and control over the style of management.

A good manager welcomes helpful criticism, no matter where it comes from. But many managers dislike being criticised. This is a characteristic failing of authoritarian managers and organisation. {JOL 05}

An important element of effective management is to inspire staff, to motivate towards working well and towards working well together in teams {JOL 06-08}. So public criticism can be seen as an indication of how inadequate a manager is in this and in other aspects of his work. Managers at all levels will carefully examine the group's magazines to see who and what is mentioned as well as the honest replies which must be given.

Public criticism of any aspect of a manager's work can affect job and promotion prospects. And so can public praise.

Criticism from within one's own group, from below, can be stifled, discredited, eliminated. Anonymous public criticism cannot be dealt with like this. An employee's right to criticise anonymously in public any aspect of management in a way which can be seen by all is most potent motivation towards good and effective management.



To me it seems that an employee's right to criticise anonymously in public any aspect of management at all levels in a way which can be seen by all, is most potent motivation towards good and effective management at all levels, underlies in good measure the Partnership's success.

t's just before opening time on bonus day at John Lewis and, boy, are we excited. Up and down the country, the 69,000 people who work for the nation's favourite retailer are gathered, impatient. At head office in London's Victoria, in 28 John Lewis department stores from Southampton to Aberdeen, 223 Waitrose supermarkets from Plymouth to Norwich, the ritual's the same: a specially chosen staff member ("partner" in JL-speak) opens an envelope, and reads out a number.

The number will be a percentage. Over the last decade or so, it has ranged from 9% to 22%. It's the percentage of their salary that each John Lewis employee, from executive chairman to checkout operative, takes home as that year's bonus. If the number is 8%, they're looking at an extra month's pay; 16% is two months. So what's in the envelope is pretty important, and in the partnership's flagship Oxford Street store, partners, nearly 2,500 of them, are everywhere: crowded dozens-deep in beauty on the ground floor, lined up on the escalators, hanging over the balconies in the atrium.

"This is the moment," says Adrian Wenn from pictures, lights and mirrors. "This is the moment when all you've done, the contribution you've made, when it all comes home. Hope it's a good one. I've got a wedding to pay for." A good one it is. Frank d'Souza from furniture (picked because he closed the store's largest single sale of last year, at £50,000) tears open the envelope as the assembled throng counts down. He holds the card triumphantly high: 15%. "Magic," cries Lee Bowra from childrenswear. "Absolutely brilliant. That's our deposit complete. We can buy a house."

In the depths of what everyone keeps telling us is the deepest financial and economic crisis since the second world war, John Lewis plainly has not done badly (operating profit up 20%, if you didn't read the business pages last week). That's partly because it stacks its shelves with goods of a certain quality, and sells them to a certain kind of customer with a certain standard of service. After all, Middle England loves John Lewis: if a product is on sale in one of its stores, you know you can trust it. Plus you can be sure you'll be served by someone who really knows what they're talking about and, most unusually of all, is eager to help.

Partly, it's down to that splendidly arcane Edwardian slogan: Never Knowingly Undersold. It also has something to do with the reason everyone was cheering so loudly last Thursday: unlike other high-street names (unlike most companies, in fact), John Lewis is owned by a trust on behalf of its employees, each of whom has a say in its running and a share in its profits. This is Britain's largest and most venerable example of worker co-ownership. Its avowed purpose is not the making of shedloads of short-term profit to placate a bunch of remote and greedy shareholders, but "the happiness of all its members, through their worthwhile and satisfying employment in a successful business" (that's from the partnership's constitution. It bears re-reading).

And at a time when the limits of the more traditional capitalist model of shareholder ownership stand cruelly exposed, John Lewis's ongoing success is increasingly prompting all three main political parties to point to it as a possible template – for other companies, for schools, hospitals, even local councils.

But what's it like to work for an outfit run like this? Well, it's worth noting that there are some partners who weren't at work last week to hear the 2010 bonus announced. They were off staying at one of the five holiday centres the partnership owns and runs for the benefit of its employees. These include a 16th-century castle with private beach on Brownsea island in Poole harbour, an imposing Victorian pile on the shores of Lake Windermere, a 24-room outdoor and watersports club on Lake Bala in north Wales, and a country house hotel in 4,000 rolling acres of Hampshire.

Nicola McRoberts and her partner, Pedro Pereira, are staying in one of the 12 modern wooden lodges on the Leckford Estate, near Stockbridge. The self-catering cabins, popular with young families, have two or three bedrooms and are smartly furnished with leather sofas and bedlinen that a John Lewis shopper might recognise. Nicola works in the stationery department in Welwyn, and Pedro is a Waitrose chef. They're here for five nights, at a cost of £176. "It's a good company to work for," says Pedro. "I didn't realise how good until I joined." Employer-employee relations at John Lewis, says Nicola, "are completely different. They want you to be happy."

The estate is a working farm which, says its managing director Malcolm Crabtree, sitting at the wheel of his Land Rover, supplies Waitrose with flour for bread, barley, oats for cereal, free-range chickens and eggs, organic milk, apples, pears and a lot of mushrooms. It also supplies partners with two nine-hole golf courses, a cricket pitch, bowling green, tennis courts, two swimming pools and some of the finest fly-fishing in the country, on the fabled river Test.

Just down from the lodges, in the heart of the estate and a stroll from the river, is Leckford Abbas, an appealing ivy-clad manor house now run as a hotel for partners. There's an oak- panelled library, an elegant lounge, a billiard room and a well-stocked bar, and the food in the dining room is fresh from the Leckford estate. The most noticeable difference between this and some chic home counties hostelry is the price. B&B here is £20.25 per person per night, and the three-course dinner costs £11.25. The other significant difference is that the bedroom doors lack keys. "There are privacy locks on the inside," says manager Chris Marston, "but you can't lock the rooms from the outside. There's a feeling it wouldn't be . . . right. It's partners and their guests who stay."

In the lounge is Anna Clark, who worked for John Lewis for 27 years before retiring last year – retired partners, providing they completed 10 years service, get the same benefits as working ones. "I can't tell you what that means to me," she says. "But I've always used my benefits – I've been in the gliding club, the sailing club, the photographic club. It's not just the bonus at John Lewis, you know."

Too right it isn't. Besides the bonus, John Lewis partners also have a rare and near-priceless non-contributory final salary pension scheme. They and a named other (husband, girlfriend, mother, whoever) get 25% off most John Lewis products, and 15% in Waitrose. There are half-price theatre and concert tickets; subsidies for whatever educational or leisure course they want to follow; plus a raft of sabbatical and extended leave possibilities.

What matters to Ann King, who is on a Leckford art course with Clark, is that "you still belong. I'm retired, and single now, and it's precious to know there's all this to do, and that everywhere you go you'll meet people you feel you have a connection to."

It's not easy to find an unhappy John Lewis partner, despite the fact that they stay with the company twice as long as the industry average. That's partly, says Wenn at the Oxford Street store, "because if you're unhappy about something, you have a responsibility to do something about it." Which brings us to the man who invented the John Lewis model. Long before it became a hotel for staff of the two retailers Britain loves best (see the last few Which? and Verdict consumer satisfaction surveys), Leckford Abbas was his country home.

Born in 1885, John Spedan Lewis was a radical with the means to do something about it. There were plenty in the early 20th century (and, for that matter, now) who believed, like him, that "the present state of affairs is a perversion of the proper workings of capitalism"; that it is "all wrong to have millionaires before you have ceased to have slums"; that "the dividends paid to some shareholders" for doing essentially nothing were obscene when "workers earn hardly more than a bare living"; and that co-ownership and partnership, rather than exploitative employment, might be "the new source of working energy of which our country is in such grave need".

Spedan Lewis was the elder of two sons whose father had founded the John Lewis department store in Oxford Street, so by the age of 21 he not only had a quarter share in that but was also on his way to becoming director of Peter Jones, his father's other shop. It was at about this time that he came to the realisation that between them, he, his brother and his father were raking in a sum equal to the combined salaries of everyone else who worked for them. He was determined things should change.

Spedan Lewis swapped his stake in the Oxford Street store for total control over Peter Jones, where he instituted shorter hours, longer holidays, and a dose of democracy. Within five years, the Sloane Square store had turned an annual loss of £8,000 into a profit of £20,000. Heartened, he added a partial profit-sharing scheme, then, in 1928, a constitution, and finally the John Lewis Partnership Limited (he ran the business, but shared the profits). The ultimate step was an irrevocable trust settlement that turned ownership of the partnership – and a responsibility in the running of it – over to the people employed within it.

What does that responsibility mean? "We ask not only that you do your day job, but that you play an active role as an owner," says Patrick Lewis a member of the partnership board and of the family. "That you engage with your colleagues and work with them in thinking through what will make the business successful. Our shareholders aren't passive and distant . . . they have lots of opinions." Those opinions are voiced through democratic channels. The chairman and board run the company's commercial activities, but an 82-member partnership council elects nearly half the board (and in theory, can sack the chairman). And the Partnership council itself is largely elected through a network of forums representing every department of every JL branch and Waitrose supermarket.

"It works," says a chirpy Ashley Davis in menswear at the spectacular marble-and-glass Cardiff store, new last September (9,000 applicants for 750 jobs; queues round the block the day it threw open its doors). "It was branch forum week last week and each department had its say – on local branch issues mainly. Opening hours, the canteen, that kind of thing." For Sallie Beech, also a newbie, "there is a feeling of equality. You belong to the business, but it belongs to you too."

A veteran of five years, Kirsty Reilly in womenswear, speaks of the "passion and commitment" that come from "being engaged, because you have a vested interest in making sure it works, for you and for the people you work with." In floor-coverings and furnishings, Beth Smith says co-ownership ensures you "make that extra effort. And because you're all partners, there's no backstabbing. Motivation's different." She also likes working for a company where "the thinking's long-term. It's not about making a quick profit at the expense of bigger values. The partners' voices really do carry weight. It's not just window-dressing: we decided we didn't want to work on Boxing Day, and we didn't." Smith reckons another company would have to double her salary to get her away from John Lewis, "and even then I wouldn't be happy".

(I should say at this point that everyone I speak to in the John Lewis Partnership, is astonishingly, almost relentlessly nice. It's a word the very nice Cardiff managing director, Liz Mihell, hates: "Can't you say decent?" she says. "Caring? Warm? Nice is horrible. It's shared values, really." Whatever, it's plainly another factor in the firm's success: good service can only come from people who like people, who are happy discussing their needs, who want to help. Half the new Cardiff employees had no retail experience: what counts in recruitment, says Beth, is behaviour. "You can train anyone to do things," she says. "But nobody can teach someone how to be." It's known as having "green blood".)

In any event, the net result of these rights and responsibilities is employees who think and feel rather differently about their work than most. That feeling extends to the 30-odd nationalities represented among the 200 or so partners at Waitrose's new supermarket in Westfield, the huge upmarket London mall in downmarket Shepherd's Bush. Since the complex opened at the end of 2008, says department manager Ceira Thom, one rival retailer has had to fire 42 staff, mostly for stealing. Waitrose has sacked one. "The level of emotion she aroused was astonishing," Thom says. "It was like: how dare she? That's my bonus. This is my company!"

The point, though, is how this different way of thinking and feeling about work translates. John Lewis, we've seen, does more than all right. Employee-owned companies currently contribute some £25bn to the British economy. According to an annual index compiled by a leading law firm, they outperform the FTSE by roughly 10% each year. Research by the Cass Business School indicates that employee-owned businesses also create jobs faster; are significantly more resilient in an economic downturn; deliver far better customer satisfaction; boast substantially higher value added per employee; and, depending on the sector and size of the business, can deliver markedly higher profits (co-owned businesses seem to work best when they've got fewer than 75 staff and operate in knowledge- or skill-intensive sectors).

So why isn't every company organised this way? Partly, as Lewis points out, because it's not easy. "We're a commercial organisation," he says. "We have to make a 'sufficient profit' to sustain and develop the business. That sets the bar quite high for the commercial success we need. On top of that, we distribute a share of the profits in the form of a bonus, and also in other ways, that will benefit our members collectively." (The constitution says a share of profits must be spent "undertaking other activities consistent with its ultimate purpose" – which is, remember, "the happiness of all its members".)

What constitutes "sufficient profit" is, obviously, a tricky one. The total amount the partnership redistributes to members, in bonuses and all those benefits, is more than a regular PLC might pay out in dividends, Lewis reckons. But what's best for individuals isn't always best for the business, and achieving a good balance is both hard work and a source of discord between executives and partners (opening hours and pensions are two notable recurring headaches). "Running a business this way isn't an easy option," says Lewis. "In many ways it's simpler to have one boss who just says: right, we're doing this."

But mainly, as Will Davies of the Demos thinktank points out in Reinventing the Firm, the received wisdom for years now has been that shareholder value – "the belief that a company's primary purpose is to maximise its value for the benefit of external shareholders" – is the only way to judge a business. In fact, as Davies says, a company is about far more than the price of its shares. It's about "people, relationships, knowledge, reputation, all of which have enormous impact on long-term value. Firms are social and political, not just economic and financial." That's not, though, the way many people see things – at least until the recent banking crisis showed just how bad the shareholder value model was "as a mechanism for accountability, and for creating value".

Post-crisis, and in the run-up to a general election, politicians from all parties have made much of the "John Lewis Model" being transferable to public services: giving local providers ownership of their own (public or private) budgets, and of the services they deliver. In theory, public services are fertile terrain for co-ownership, a great way to harness the strong vocational commitment in the sector. In practice, reckons Nigel Mason, policy director of the Employee Ownership Association, "it raises a multitude of questions about how it could really be made to work".

Politicians like the sound of employee ownership, Mason says, because despite increased expenditure, public service productivity continues to fall, "and they really need to increase engagement, motivation and innovation, and provide a better service to the user". Westminster also likes the notion that with public service spending cuts inevitable, "co-ownership would be a nice sweetener". Employee ownership, though, is "not a panacea. It won't work if the conditions are such that any independent business would fail. It needs careful thought and planning about ownership and governance structures, and the precise terms of contracts. It can certainly work in some sectors – small-scale community care provision, for example. Big, complex enterprises running on fine margins may be more problematic."

Of course, as Patrick Lewis notes, John Lewis has had 80 years to get its "virtuous circle" working: look after the partners and the partners look after the customers, who look after the profit. "It's a culture and a way of working," he says. "You can't do it overnight, and it won't be right for everyone. But it's worth trying." And if we're really talking, as perhaps we are, about where capitalism should go next – about what exactly a good company is, and what it should do – there are worse models to look at than John Lewis.
 
Leadership of John Lewis is inspiring and incredulous. You have already explained about leadership styles. I would like to elucidate that if you want to start your business where leadership is must needed features you should have.Here is the list of characteristic which leaders should have to dominates the market.

The Characteristic of Leadership

1) Empathy

2) Consistency

3) Honesty

4) Direction

5) Communication

6) Flexibility

7) Conviction


:SugarwareZ-124:
 
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