How John Lewis Puts the Happiness of its Staff at the Core of its Business

Thanks very much, that's my speech done: ‘There should be more happiness’ -Mic drop-. Actually I've had the opposite experience to Sophie in my life, I spent the first 18 years of my life learning ballet and then the rest of my adult life trying to work out to be how to be sexy; but that's not what this speech is about, that's a whole other speech. This talk is about the John Lewis Partnership where I work and how for 100 years we have been experimenting with how to make people happy. But first I thought I’d just do a quick survey, hopefully after 7 hours of being talked to... ‘Who thinks happiness at work is a good thing?’ (Many hands are raised). Marvellous. ‘Who thinks we've still got a bit further to go before everyone is happy at work?’ (Hands raised again) Great, more work to do. So hopefully some of these tips will be quite useful.

First of all though I wanted to talk to you about my early years of career. This was me in my Twenties (picture of a woman bent over her desk with her head in her crossed arms), I'm not sleeping, I'm in existential despair. I worked for an unnamed large women's retailer and I worked in the department at Head Office that dealt with jersey trousers, so like leggings and tracksuit bottoms and stuff, and for a while I was able to keep myself amused by the fact that I would have to answer the phone with ‘Hello Soft Bottoms’; my friends thought that was pretty funny as well and they’ve heard it quite a lot. But after a while that failed to disguise the misery that was surrounding me on a daily basis and I thought: ‘This is odd. Here we are working in clothes and it should be fun and yet people are throwing up before they come into work and trembling on the pavement before they enter the door and having that absolute Sunday-night-pit-of-the-stomach-doom. And I thought well, you know if this is what it's like in fashion, which is meant to be fun, then maybe this is just normal; in fact, maybe this is inevitable. Maybe work is a deal where you exchange your happiness for money and you use that money to pay the bills and that's what I adult life is all about?’ And hence head on elbow. And I spent probably ten years of my career thinking ‘This is just normal, this is how everybody feels at work’. And this is me now (picture of a woman behind her desk, hands in the air, shouting in glee), not everyday, that would be annoying for all of my colleagues and everybody else. But I have found that work can not only be fun, but can be a source of joy and pride and creative expression, and it can actually, if you enjoy your work, make you a better person; my husband definitely prefers this me, to the other me and certainly my children do as well. And so I became sort of evangelical about making work a more fulfilling and human place to be, because of the ripple effect it can have on so many people.

So ‘Happiness at work’ it's quite a popular idea at the moment but it's not a new idea. John Lewis and Waitrose is part of a partnership that was set up over 100 years ago by somebody called John Spedan Lewis. Anyone heard of him? So hopefully you've heard of John Lewis and Waitrose? Anyone not? Thank goodness. So we are a business of about 85000 partners like myself who co-own the business, we have about 450 stores, we turnover over 11 billion pounds, with over 10 million customers, and we only really exist because 100 years ago a man fell off a horse. This is Spedan Lewis, he didn't quite look like that, but it’s my artist’s impression of him; Spedan Lewis was working in his father's haberdashery business in 1909 and it was on the original Oxford Street store site, it was a silks and fabrics business, and in 1909 he fell off his horse. He was about twenty one at the time, and he was injured so badly that he spent two years in a sick bed recovering, and it gave him a lot of time to think; and in the early part of the twentieth century there was quite a lot of stuff going on, there was quite a lot of social and political unrest, and he spent two years really thinking about why this was the case. He recognised that social inequality was a really big part of the problems of society that he was seeing and he also reflected, whilst he was recovering, that he, his brother, and his father took home more in profits from the business than did the 300 people that worked in the stores and he thought that not only is that unfair but that is unsustainable and society will break down if that continues. So he had studied natural science as a student and was really interested in nature, and how the principles of nature could be applied to business. He wanted to see if you could create an ecosystem where all of the parts of the ecosystem were in balance and worked to improve the whole. So he wanted to run a giant experiment with the business to say ‘If you gave the business away to the people who worked in it and you set it up such as it was designed to work for the benefit of everybody who it touched: employees, the customers, suppliers, the community, would it self-regulate like a massive Earth experiment and constantly improve and be resilient?’ It took him thirty years to realise that dream that he had when he was twenty one; it took the death of his father, who wasn't that keen on giving away his family business funnily enough, and actually an act of Parliament to be able to do it, because nobody had really done it before. But he created the John Lewis Partnership and it's constitution; and we still run the business, this giant experiment in industrial democracy, on the principles that he provided. Our constitution is written and the very first thing it says is ‘The Partnership’s ultimate purpose is the happiness of all it's members’, and there aren't that many businesses who run a business for the happiness of the people who work in it; we've got something in there about profit eventually, but it only says we have to make ‘sufficient profit’, which again is quite unusual for a commercial business. But we still run the experiment on these lines today.

I thought it'd be interesting to go through some of the stuff that we have learnt over the past 100 years of trying to make 85000 people happy, and I've just subdivided them into health, wealth and happiness, because it sounded nice. I'm going to give you some stories of some of the things that we've done.

So on health: of course we've got the normal things we have health insurance, and discounted gym memberships, and spa days and doctors, and podiatrists and things working with us; but I thought I tell you about Laura Garvin, that's Laura on the right there. Laura was an HGV driver for the Partnership and it's a very sedentary job and so she found that over time that she was overweight, and unfit, and eating unhealthy food through service station snacks and things, and she wanted to change that. She took control of her own life and ate better food and became really interested in nutrition and exercise. And she became so passionate about it, and realised how much happier it had made her, that she wanted to share this with more of her fellow partners. So she re-trained to become a chef, in the John Lewis partnership, and she was a chef for a distribution centre; so again, serving lots of her fellow drivers, and knew that spiralized courgettes and quinoa was not going to cut the mustard when it came to feeding hungry drivers. So she has developed what she calls ‘Stealth Health’; she still serves them sausages and chips but they’re baked, and sometimes they’re sweet potato fries and that sort of thing. And she's done things like run exercise clubs for people in her area, and she creates nutritional lessons for them and the health of the Partners in her area has really improved. This is her winning an award for how she has improved the lives of her fellow partners through health (photo of Laura with an award).

Wealth is the next one; probably the thing that most people know about the John Lewis Partnership is that it shares its profits with its employees, and this is us receiving a 15% bonus, which was some years ago now (I chose not to show the one of us receiving the 5% bonus which was this year's one, but actually people still look pretty happy because in retail 5% is, at the moment, quite awesome). So we do various things in terms of improving people's wealth: we have great discounts for John Lewis and Waitrose, we have financial advice, we offer low interest loans, and we've just teamed up with a company called Canopy that help people who are paying rent to use their regular rent payments as part of their credit score. So we try to be innovative in how we are understanding people's current financial problems and helping them. But actually the interesting thing that I thought I'd share about wealth is, a bit like if you ask customers what it is they want they always say lower prices, if you say to an employee ‘What's going to make you happier?’ They will always say higher pay and that's always the number one thing. But actually when we did the data analysis, when we correlated employee satisfaction with how they scored on various metrics, their satisfaction with their pay wasn't even in the top 10 of factors that influence their happiness. Far more important were things like ‘My line manager cares about me as a person’, or ‘I work as part of a supportive team’; and I think that's part of how we’re rethinking about the definition of wealth. Nowadays, millennials are favourite famous for it, they're not necessarily only thinking about money, of course money is important, but they are really interested in having a fulfilling life, and doing work that they feel is meaningful and serves a purpose, that they're surrounded by colleagues that they actually think care about them. And so we’re rethinking about how we think about value and what we provide for people.

And then finally in our current ‘This is what we do’: Happiness. I could have chosen to show you a picture of our six yachts, Brownsea Castle that we have hired on a permanent basis from the National Trust as one of our partnership hotels, we've got various other extraordinary things that we do like renting out LEGOLAND for the day, for all of the partners and their families. But I thought I'd show you a picture of our Christmas concert this year. We have 18 choirs around the country; Manvinder Singh, the chap in white in the middle, he is our full-time musical director. Not many retailers have a full-time musical director and this is our full, 150 piece Partner Orchestra. It was a lovely evening, with carols and Christmas songs generally, but the most memorable point of it for me was when he called down from the choir a chap called Daryl Sergeant who is a Waitrose supermarket assistant. Daryl had always, always wanted to be a conductor and Manvinder had spent the last six months training him in how to conduct a full choir and orchestra, so, in front of his family who are in the front row, Daryl then conducted ‘Away in a Manger’ to this full 300 piece choir and orchestra. There were really quite a lot of goosebumps and even maybe some tears in the audience when he did that. And that's part of what we think about when we think of happiness, it’s not just happiness at work, it's happiness as a human in your whole life.

So that's a quick rundown of what we do at the moment and before I go onto the next bit, which is what we are thinking about for the future, I thought I would just ask you to talk with your neighbour about ‘When were you happiest at work?’ and ‘Why was it the case that you were happy?’ If you could just spend a couple of minutes talking about that.

It's brilliant that there’s so much energy in the room. That says to me that you have at least, at some point in your lives, been happy at work. So that's fantastic; I'm not going to ask you why it was the case but hopefully you all found reasons why you were happy.

So I just wanted to give you a bit of an insight into how we’re thinking about happiness for the next 100, or at least the next couple of years who knows what's going to happen in the future? Health, wealth and happiness can get you so far, and it's done us well for a century or so; although I'm not sure that if you were creating a company that was dedicated to making its employees happy you’d necessarily choose to do it in retail right now, however we motor on. Purpose: everybody wants purpose at the moment, everyone thinks purpose is a really important thing to have at work and that either they are discovering it, or creating it, or finding it, or whatever. We've actually had a purpose for a century which is ‘To find a way of doing business where everybody benefits’, so for us it is as important as ever has been; but we want to make sure that it's really relevant to the society in which we are operating at the moment. When we were invented 100 years ago there was no National Health Service and so one of the things we did was create a ‘free at the point of need’ medical service for employees, 20 years before the NHS was invented. And one of things that we are constantly doing is looking at the societal problems around us and thinking ‘What are the urgent needs now, that our partners need us to do something about?’ And so mental health is one of the areas which is affecting so many people at the moment and we're looking at how we could be as revolutionary in helping our people with their mental health as we were 100 years ago in helping people with their physical health, or being one of the first employers to offer paid maternity leave; so that's one of the things where we’re looking at ‘How can we make sure that our purpose is still really is as relevant today as it was then?’

Learning. Everybody knows that reskilling is what are all meant to be embracing with joy at the moment, but actually we recognise that it's a really important part of who we are as a business to make sure that the people who work for us are equipped to continue to work for as long as they need to. And we have tried various things, and we've been at the forefront of the government's work on apprenticeships so that we've got, hopefully, a thousand apprentices in our business by the end of this year. But we’re doing much more than that as well, we’ve taken all of our HGV drivers, for instance, and helped them go through a program where they're not just drivers, they’re also trained in how to install washing machines, and how to install TVs, so the skills they learn are useful as the business evolves. And then as the future of John Lewis and Waitrose gets reinvented for the modern world, we are looking at how we train existing partners to become fashion stylists or home designers or nutritionists; it might be easier and cheaper to buy these skills in, and sometimes we may have to do that, but actually we think it's our responsibility to make sure that the people who work for us are as equipped as possible in learning the new skills that they need for the modern world and we've got a job to do in helping them.

And then: Judgement. Everybody knows that one of the ways of being happy at work is having some control and autonomy over what it is you do every day. And running an 85000 strong retail business, where you're selling an awful lot of stuff every day, requires a lot of tasks to be done, a lot of things to be ticked off. And, without really intending it to happen, you can eventually end up in an environment where you've got just hundreds of tasks, KPI's, things to do, processes, rules, operating procedures, and you can become sort of swamped by that. And one of the things, if nothing else, we know about the future is ‘If you can write a rule for it, it will probably be automated at some point’ and so we really want to understand where is it that people add value? And how are they adding value? And are we helping them add the most value by helping them use their judgement, rather than using a rule, to decide what they're going to do. People have 86 billion brain cells in their head and we want to make sure that they are using them, by understanding the context, understanding what it is we’re trying to achieve, and then using their own judgement in helping them to decide what to do next, rather than following a rule. So in this sort of area we're looking at: How do you remove KPI's? How do you remove policies and rules? How do you remove appraisals? How do you help people be freer to understand what it is they need to do and then work out for themselves how they're going to do it?

So three takeaways that I just wanted to leave you with; the first thing that we've learnt is really that people enjoy different things. I think the people who joined our Ukulele Orchestra they were surprised, and their audience was surprised, at just how enjoyable it was for them to play, and for people to hear them play. But this is a really fun part of our Head Office environment now, the Ukulele Orchestra. These are people running in a fun run. But what I think we really recognise is that with 85000 people there is definitely no ‘one size fits all’ in what's going to make those people happy, so experiment. I think the message is: ‘Get the hygiene right and then really focus on community and experience’ because, in our experience, that is what makes people happy. Secondly, even though we've spent a century trying to work out how to make people happy we definitely don't score 100% on all our employment engagement surveys, although of course that's always the aim. I think though the important thing is to aim for 100% and realise that you're never actually going to achieve it. And embrace the dissatisfaction, part of what makes us human is being dissatisfied, that’s what makes us strive to be better, and really finding out what's at the source of that dissatisfaction is probably going to help you improve the experience for everybody, even people who think they're already as happy as they can possibly be. And finally, one of the things that we've worked out is that a lot of the good stuff is free: saying ‘thank you’ is free, having your manager recognise that you've done something really well is free, having people around you know that you're caring for aging parents, or that you're about to get married, or that you’ve had a birthday, or that your child is about to start a new school, these are the things that actually make people feel happy, and feel part of a community. And a lot of things like singing clubs or running clubs or exercise clubs these are free to setup and free to do right now; and it doesn't take Brownsea Castle on Brownsea Island, an amazing hotel, to make people actually happy, feeling part of community is what makes people actually feel happy at work and not just a cog in a machine, And that's probably the most important thing we've learnt over a century of experimenting in how to make 85000 people as happy as they can be. So my final question is: ‘What more can employers do to advance human happiness?’ and then, as an extra bonus question, ‘What gets in the way? And how can you help to overcome those barriers, so you can advance human happiness in your organisations as well?’

Thank you very much.