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JLP 260John Lewis Partnership 

"The present state of affairs is really a perversion of the proper working of capitalism. It is all wrong to have millionaires before you have ceased to have slums. Capitalism has done enormous good and suits human nature far too well to be given up as long as human nature remains the same. But the perversion has given us too unstable a society. Differences of reward must be large enough to induce people to do their best but the present differences are far too great. The John Lewis Partnership was started to find out what would in fact happen if business were managed otherwise. So far, the thing seems feasible."
John Spedan Lewis talking in a BBC interview in 1957

Born in September 1885, John Spedan Lewis was the eldest of two sons whose father had opened the John Lewis department store in Oxford Street. By the age of 21, not only had he acquired a quarter share holding in the department store, he was well on his way to becoming Director of Peter Jones, the other shop in his father's control.

It was during this time that Spedan Lewis became aware that he, his brother and his father between them were enjoying earnings equivalent to those of the entire workforce in both shops. But it wasn't until a riding accident forced him to convalesce that he was able to spend time developing his ideas for the future of the business, ideas that would radically change its foundation.

With the happiness of his employees firmly at the centre of his mind, he began to instigate new systems and practices as soon as he returned to work. Intent on bettering the working conditions and spirit of the company, he offered shortened working days, the setting up of a staff committee, a third week's holiday paid holiday was an innovation for the retail trade at this time and eventually, a house magazine, the Gazette, which is still published today.

By 1914, a conflict with his father, who was alarmed by some of these bold practices, meant Spedan withdrew any active involvement with the Oxford Street shop in exchange for total control of Peter Jones. 

In 1920, the first profit-sharing scheme was introduced along with a representative staff council. A reconciliation with his father after his mothers death meant the cooperation between the two stores resumed, then his father's eventual death in 1928 gave Spedan sole ownership. He created the first Constitution and the following year the John Lewis Partnership Limited and signed the First Trust Settlement. This gave him practical control of the business, but allowed the profits to be distributed among the employees. Twenty-one years later, he signed the irrevocable Second Trust Settlement, and the Partnership became the property of the people employed within it.

The Partnership's ultimate purpose is the happiness of all its members, through their worthwhile and satisfying employment in a successful business. Because the Partnership is owned in trust for its members, they share the responsibilities of ownership as well as its rewards profit, knowledge and power.

These are its values:

  • Power in the Partnership is shared.
  • The Partnership aims to make sufficient profit from its trading operations to sustain its commercial vitality and finance its continued development, to distribute a share of those profits each year to its members and to enable it to undertake other activities consistent with its ultimate purpose.
  • The Partnership aims to employ and retain as its members people of ability and integrity who are committed to working together and to supporting its Principles. Relationships are based on mutual respect and courtesy, with as much equality between its members as differences of responsibility permit. The Partnership aims to recognise their individual contributions and reward them fairly.
  • The Partnership aims to deal honestly with its customers and secure their loyalty and trust by providing outstanding choice, value and service.
  • The Partnership aims to conduct all its business relationships with integrity and courtesy and to honour scrupulously every business agreement.
  • The Partnership aims to obey the spirit as well as the letter of the law and to contribute to the wellbeing of the communities where it operates.

All 84,000 permanent staff are Partners who own 49 John Lewis shops across the UK, 352 Waitrose supermarkets, an online and catalogue business, a production unit and a farm. The business has annual gross sales of over £11bn. Partners share in the benefits and profits of a business that puts them first. The average non-management Partner hourly pay is 20.4% above the National Living Wage.

Read more here

The John Lewis Partnership is one of a growing number of businesses with an employee-owned structure and is a member of the Employee Ownership Association (EOA), the not-for-profit membership body representing the sector. Is this something to consider for your business?

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Geoff Knott, 08/11/2017

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