An amazing photograph appeared recently in The Guardian newspaper – the shot consisted of the MD of John Lewis, addressing hundreds of his ‘partners’ at a new branch opening in London. What makes the shot interesting is the fact that his partners are employees that share in the ownership of the company, and they number almost 80,000. There isn’t a stock market listing and there aren’t private equity backers, and the payout for last year to everyone was in line with the overall profits – and those keep getting better every year.
This interesting model isn’t entirely rare, and when John Lewis first made this shift to an employee-owned business in 1929 – this experiment in industrial democracy – it has continued to reap benefits and move from strength to strength. Tony Greenham, head of finance at the New Economics Foundation said in the same article, “A successful economy is one where private interests ultimately serve the broader public interest…What companies like John Lewis demonstrate is that this does not have to come at the expense of commercial success.” And this has also helped establish and define a lasting brand that continues to grow, espousing a collectivist attitude. The idea that hard work will benefit you, the employee, and not the boardroom seems so simple a motivation. And it works.
This model isn’t the only one turning a profit, and employee-owned businesses traditionally don’t skyrocket like their more conventional peers, but it seems to be more about longevity, respect, quality and a slower, steadier growth pattern. Perhaps the days of ‘smash and grab’ economics are due for an overhaul; this model may just be the wave of the future, even though it’s a blast from the past.