‘We will watch his future with interest,’ MT wrote of John Lewis boss Andy Street after we named him Britain’s most admired leader two years ago. His career has certainly taken an interesting turn.
After nine years as John Lewis MD and a lifetime working for the company, today is his last in the job as he heads off into the world of politics in hope of winning the fight to be mayor of the West Midlands, the region from which he hails. His replacement Paula Nickolds is the first woman to run the department store in its more than 150-year history.
‘I have no wish to sound sanctimonious, but the moral compass by which we run this organisation is always in play,’ he told MT in the below feature, first published in December 2014. He might find the world of politics something of a culture shock.
In John Lewis's calendar, there used to be but one red letter day: the ritual announcement of the annual bonus in March when the 90,000 suspense-filled partners discovered their cut of the annual profits. In 2014, it was 15% of salary for each one, the equivalent of eight weeks' pay.
Now there are two RL days at JL. And MT meets Andy Street, its new Most Admired Leader, on the excited eve of the second: the release of its Christmas ad. The £7m push this year, featuring a heart-warming little piece of schmaltz about a boy and a penguin, provoked the desired media frenzy – it quickly received 13 million hits on YouTube – and, with luck, will have punters flocking into JL shops and onto its website to blow their cash.
Street has been MD of John Lewis for seven years and his is an unusual job. There are few bosses whose function every day is to focus on achieving a success for their business that is defined as being measured 'by the happiness of those working in it and by its good service to the general community', as stated in the JLP constitution. He is not one of the rat pack of UK retail – a night out with Philip Green at Boujis would be a non-starter.
Is the command of Spedan Lewis, who handed ownership of the company over to the staff in 1929, ringing in his ears when Street slips from beneath his luxury Hungarian goosedown duvet (10.5 tog) each morning? 'What's driven me all these years is a desire to prove that our business model is not only different but superior. The day of the bonus announcement is when what we do becomes real.'
They believe in the JL method more than ever. JLP's turnover overtook Marks & Spencer last year and confirmed it as the post-crash darling of the UK high street. With Tesco in a turmoil of hubris, horse meat and SFO investigation, the virtuous path of solid bourgeois shopkeeping has become an even more powerful competitive advantage. The soul of decorum, Street won't comment on Tesco, but notes: 'I have no wish to sound sanctimonious, but the moral compass by which we run this organisation is always in play. Everyone expects this of us: customers, suppliers. They have confidence in our principles and values.'
Never knowingly undersold. It had a rough ride a couple of years back when it extended the payment terms for some suppliers, but the damage was contained.
Street has become JLP's public moral voice. Along with Justin King, then of Sainsbury's, he was one of the few to speak out about non-payment of tax by foreign companies, protesting: 'I feel strongly that if we make £100m and pay 23%, and Amazon makes £100m and pays nothing... that is not right.' But has the government responded to lobbying and started tackling this? 'It has been as good as we could have expected,' he says. 'The PM tried to address this at the G8. What more could we ask? But there is no change in Amazon's arrangements.'
Street is the first Most Admired Leader who is not the overall boss of his organisation. Charlie Mayfield chairs the John Lewis Partnership and indeed Mark Price, 'The Chubby Grocer' and head of Waitrose, is the deputy chairman. It's been rumoured that the pair are serious rivals, favourite generals competing for the affections of the dashing ex-Army and former McKinseyite Mayfield.
There's a hint of a smile. 'There is a healthy, beneficial rivalry. We run our own profit centres (Waitrose had gross sales in 2013-14 of £6.1bn and operating profit of £310m; the figures for John Lewis are £4.1bn and £226m), but it is a bigger business, with tighter margins. We've grown up together. I admire him. Their waters are more turbulent than ours. The world of non-food is more benign.'
If their roles were suddenly reversed – 'that would be great fun' – would he give Ocado, with which relations are legendarily frosty, the bum's rush? 'A contract has been signed,' he replies. 'That is an academic question.'
Street is open that Waitrose is a 'far posher' brand than his own JL. 'It's vital that we are accessible to everybody - we must reach 70% of the people who live in the cities that contain our department stores.' Street has 43 stores and a burgeoning online trade that grew by 19.2% last year.
The JLP business model of employee ownership has attracted increasing interest in recent years. The organisation has done very well in testing times. Its staff are engaged, focused and pull together. They are the creme de la creme. While not fully Athenian, JLP has democratic elements. It isn't in a dogfight at the bottom of the value market. It has relatively flat pay structures in an era when the gap in UK business between the poorly paid at the bottom and those at the top is the widest ever.
Street appears to earn between £750,000 and £1m a year, a healthy sum, but relatively low compared with his peers, who until recently, at Tesco, for example, were tooling around in a fleet of executive jets, including a top-of-the-range G550. Rule 63 in the company constitution states that the ratio of the highest to lowest-paid employee can never exceed 75. The average current figure in the UK is currently 180 times, and in the USA 204. As we suffer from the effects of an era of excess when a lot of wrong was done, it feels as if John Lewis tries to do the Right Thing.
Others want to know the ingredients of the magic elixir. The government is very keen on John Lewis and has courted it assiduously, not least for support in the final week before the Scottish independence vote. It was suggested that the JLP model was one the Royal Mail should adopt, which revealed a lack of understanding about the shortcomings of the latter organisation. HMG will support a big conference next year to promote employee ownership. Sceptics say that with the power of the Waitrose brand and more aggressive expansion, it could have been twice the size it is now.
Street is a John Lewis lifer, but comes from an unusual mould. He is small and slight, with a nervous energy. His parents were scientists from Solihull, and he attended King Edward's School in Edgbaston before studying PPE at Oxford. (He retains strong links with the Midlands and chairs the Greater Birmingham and Solihull Local Enterprise Partnership.) He wanted to lead or manage, and he thought of joining the social work department in Birmingham, which didn't want him. Then he tried M&S, which also turned him down.
So what did M&S fail to see in him? 'I never received feedback. Possibly they saw a young man they found a bit cocky and not mouldable. I had a great time at university (he chaired the Conservative Association). This organisation liked people who were different. The people who interviewed me were engaging characters, and I liked that.' He was also late for his first day.
Street made the right choice, with M&S still struggling to find its way, its clothing remaining a poor performer. What would he suggest to Marc Bolland? 'I would not comment on another retailer, but what I've enjoyed about this job is the intellectual challenge of leading in a commercial world that has been turned upside down. We have anticipated the changes in our customers' behaviour – their tastes and practices – and we've acted and stayed ahead of the curve. M&S still has the same challenge.'
Street has made John Lewis less dowdy on the clothes front and has invested very heavily in a seriously impressive web offering. Its click-and-collect service works a treat. For a retailer, he's an unenthusiastic shopper himself, and like many men prefers a rapid view, evaluate, grab approach – 'I'm the type that just wants it to be an efficient process.'
We cannot leave him without a discussion about our nearest neighbours, the French. Street got himself into de l'eau chaude in September, when he described France as 'sclerotic, hopeless and downbeat', and said UK entrepreneurs with investments in the country should 'get them out quickly'.
Stating that France was 'finished', he noted: 'I have never been to a country more ill at ease... nothing works and, worse, nobody cares about it... You get on Eurostar from something I can only describe as the squalor pit of Europe, Gare du Nord, and you get off at a modern, forward-looking station (St Pancras).'
There was a huge outcry, but many agreed. He's contrite. 'I shouldn't have said it. It wasn't reasoned and thoughtful.' (He's reasoned and thoughtful today.) But surely his outburst was made more in sorrow than anger? 'I am a huge Francophile. Our countries have similar histories and are inextricably linked, and will be in the future.' He is squirming, having doubtless received a re-education in spin from his PRs.
He supports staying in Europe, saying that an exit would be disastrous and internal reform is the way forward. He is also concerned about the national conversation about migration.
'Immigration has made this country tolerant and competitive over 300 years and continues to do so. Our greatest cities became so because intellectuals gathered to exchange ideas – it is a vital part of our economic heritage.' Gathering intellectuals is one thing, but having to import 300 Hungarians to make sandwiches, which so pains the Daily Mail, is another. Although he's aware of the ethnic breakdown of his partners, he doesn't know what proportion was born abroad. This clearly interests him as an idea worth looking into.
At 51, he is single, with flats in London and Birmingham, plus a cottage in Snowdonia he shares with the Tory MP Michael Fabricant. 'I can be a bit selfish. I can organise myself without worries about obligations to family.' Does he regret not having children? 'Of course I do. It's a disappointment.' At this point, his two female PAs across the room are tittering quietly. 'Look – they're laughing at me!'
The Times quoted a member of his social circle who noted that there was something of John Inman from Are You Being Served? in him. But he's far too serious to be seen as camp. He doesn't wish to share his private life with the public, and that is fair enough. JLP is collegiate and abhors cults of personality, and has even been rude about Spedan, JLP's founder, who got uppity in his dotage. Street had an old MG TF that went phut this year and was swapped for a Land Rover. He spends his bonus on another field for the sheep he rears in Wales.
He's not public property, but he let his executive coach speak about him last year. Dr Catherine Sandler said: 'He's a very focused, very structured and very organised person – a swift decision-maker but does agonise, especially over people-related decisions.' We will watch his future with interest.
THREE CHALLENGES FACING STREET
1. Keeping the clicks versus bricks and mortar finely balanced.
2. Stopping Waitrose, the chatterati's favourite supermarket, getting all the glory.
3. Trying to discover his inner shopaholic.
STREET IN A MINUTE
1963 Born 11 June
1981 Enters Keble College, Oxford to study PPE
1985 Joins John Lewis as graduate trainee
1993 Store manager, Milton Keynes
1998 Store manager, Bluewater
2000 Supply-chain director
2002 Director of personnel
2007 Managing director