Articles archive

Foreword to the 5th Edition - 2000

Author: Sir Stuart Hampson,Chairman, John Lewis Partnership

An intelligent word processing package fed with the two words 'create' and 'executive' would most probably produce some variant on the mantra - 'the prime responsibility of executives is to create shareholder value'. The straitjacket of short-term financial returns inhibits businesses fulfilling their potential, and it deprives employees of the opportunity to find personal satisfaction in their work. I therefore welcome the theme of this publication that creativity should be an essential element of executive education.

My business doesn't have shareholders in a conventional sense, as the John Lewis Partnership is owned in trust for each generation of employees. This inevitably gives us an unusual viewpoint, but it doesn't mean that we are insulated from the competitive pressures of the retailing sector or that we set any less store on creativity and innovation. Shoppers don't come into a Waitrose supermarket because they like the idea that it is owned by the staff who will be serving them: they need to be attracted by the excellence of the food products on offer and by the higher degree of personal service which they will receive. A workers' co-operative faces the same challenges as a conventionally owned business, but it does so with the advantage of a singular focus throughout the organisation of creating a better business. Our buyers' sense of satisfaction in developing a new product range is enhanced by their knowledge that they are moving forward a company in which they have a direct financial interest. It's a classic 'virtuous circle' which stimulates creativity at all levels.

We now have over 40,000 Partners working in our department stores, Waitrose supermarkets and textile factories. They all share the profits we make, but more importantly they share in the process of making profit. Our business rests on seven principles, the first of which is:

The Partnership's ultimate purpose is the happiness of all its members, through their worthwhile and satisfying employment in a successful business.

'Happiness' isn't a word that figures regularly in corporate mission statements, but we see it as an indicator of the extent to which we are enabling our Partners to feel fulfilled in their work. The success of a business like ours does, of course, depend on the direction and inspiration provided by its leaders, but we rely just as much on the creativity of our front line troops who actually deliver the experience to our customers. The Partnership is a disciplined organization and we are very aware of our history, but neither characteristic

inhibits creative thinking. Our hierarchical structure is undeniably unfashionable; yes, we have established procedures, and in areas such as food handling these are often determined by government regulation, but the Partner behind the meat counter in one of our supermarkets shares the responsibilities of ownership and is encouraged to think how he can be entrepreneurial, how he can help to move his business forward. Nor is history stifling to innovation: this year we are celebrating our Golden Jubilee - 50 years since Spedan Lewis converted his 'experiment in industrial democracy' into a permanent Partnership. As we enjoy that legacy we are reminded of the originality of his concept and the obligation on the current generation of Partners to sustain the vitality of this business. Pride in the past is a stimulus to creative thinking about the future.

The John Lewis Partnership is unique in its corporate structure, but an increasing number of companies have recognised the competitive advantage which comes from a management approach that releases energy behind the drivers of success rather than focusing on the product of shareholder returns. The RSA report on Tomorrow's Company underlined the competitive advantage that comes from such an inclusive style of management.

The liberation of creative thinking starts with a framework of corporate values that all employees can identify with, which they can take pride in and which is a starting point for job fulfilment. I am pleased to see this issue firmly lodged on the agenda of executive education.