We had an excellent presentation at work today by a couple of people from John Lewis and Waitrose about their approach to delivering a fantastic Customer Service. It’s always great getting perspectives from people outside your organisation, in different industries and seeing the similarities and differences.
The point that made me sit up, and for some reason get fired up was about how all John Lewis employees “own” the business. John Lewis doesn’t call them employees, they’re partners. The creator of this idea was John Spedan Lewis who wrote a book called “Fairer shares: A possible advance in civilisation and perhaps the only alternative to communism” which has to it a whiff of before-its-time-new-labour-lefty thinking that for some reason I warm to.
It’s not hard to warm to John Lewis/Waitrose when you discover the original documents relating to Tesco’s strapline from the days when things were are bit more honest.
person working in, and spending all their money with us, helps us to drive down prices for suppliers and make massive profits for ourselves, hahahhaha!
So there I was floating along on a delicious warm Waitrose croissant of general agreement about how valuing employees results in lower turnover of staff, fewer sick days and better customer services – which leads to happier customers ( who come back, again and again ) – which leads to profit. And because John Lewis doesn’t have shareholders, remember the company is owned by the employees, ahem, partners… all that lovely profit gets paid to them as their bonus. How totally crazy and brilliant is that?
Then we discovered that, as a partner, your bonus is a percentage of your salary. Currently, depending on how well John Lewis have performed, it’s about 17% of your salary. That’s a great bonus.
But it got me angry that those with large salaries, who have already been recompensed for the work they do ( haven’t they? ) then get a bigger bonus than everyone else. For some reason that completely irked me. If a “share” of the profits is “ownership” then why does someone on a bigger salary own more of the business? Should they?
I raised this question and received some counters, from the speakers and the floor, that went:
“Well, if anyone wants to earn that much at John Lewis they will be given all they need to climb the ladder.” That’s great but kind of misses my point.
“The top bonuses are capped.” Oh I thought, but it depends how they are capped. Are they capped at an amount or a percentage or what.
“People often value more the non-financial rewards more than the bonus.” Again, my point isn’t that receiving money isn’t good, but comparing it to a healthy working culture missed my point also.
I felt that I was maybe being unhelpful. They were here to talk about customer service and here I was wanting to genuinely discuss abstract notions of ownership. You see my thinking was, until I understand their idea of ownership which is based on a good culture for employees/partners and democracy of voices and COLD HARD CA$H – that until I could really understand their model, I wouldn’t be able to think about to apply any of their good stuff to my setting.
My point was this…
If “ownership” is being represented by money then why isn’t it equal?
… It always stinks to my ears ( ahem ) when I hear of percentage-based pay increases in the media. Percentages make the difference between the haves and the have nots wider.
It was during the presentation, at this very point that I was reminded of Doug Engelbart who died recently. Doug seemed to get described by the media as “the guy that invented the mouse”, which he did do, but more importantly ( to me ) Doug’s work was all about using the computer to create tools to augment intellect. Not replace it. If you haven’t watched this video, The Mother of All Demos, go watch it. It’s stunning. The hard part is trying to imagine what it’s like not to know what a mouse is. Also pay attention to the things he demonstrates that we still don’t have today.
And so there I was listening and asking questions about the John Lewis bonus scheme thinking… at a gut level, I have no clue as to how the bonus scheme would change if it were paid equally rather than on a percentage basis. Of course, there are only a small number of people earning the big bucks at John Lewis, but how much bigger is their drain of the collective profit is.
I would argue that dealing with these unusual sliding scales, like when thinking about the 99%, and like when dealing with very BIG numbers is something we as humans just aren’t very good at dealing with, at working with at a gut level. Maybe it’s just me.
And so I thought, well, what do I know? They have 85,000 employees. They will have fewer high paid execs that lower paid checkout workers. I could guess at how much roughly they get. From there I could work out what 17% bonus would be and add it all up.
So I made a spreadsheet to try and get a feel as to what the difference would be.
What I discovered…
…was that if you are on £20,000 you currently get a bonus of £3,400 and if you are on £40,000 you get a bonus of £6,800. If you are earning £150,00 your bonus is £25,500.
If the bonus was equalled out it would be £5,814 each. That, of course would be a massive increase of those at the lower end, but would it be even worth bothering to drag their sorry arses out of bed for those at the higher end of the pay scales who, in my imaginary model would be out of pocket by £20, 000.
One of the strangest things about doing this was, if you remember the Telegraph article I linked to earlier which contained the figure for the total profit announced by John Lewis for last year. It has £415 million whereas my spreadsheet has £494 million. What I’m quite clear about there is how, given my numbers were pulled from my hat, and have no fine tuning applied and can’t take into account a myriad of factors, it’s still not a bad ballpark figure for something I wouldn’t have even been able to guess at if asked in the street.
I came away wanting to explore the numbers, only slightly, and did. The answer I got told me that ownership is never ever fairly shared out but that some ownerships are more equal than others.