UK: PROFILE - STUART HAMPSON - JOHN LEWIS PARTNERSHIP.

UK: PROFILE - STUART HAMPSON - JOHN LEWIS PARTNERSHIP. - The freemason, ex-civil servant and keen gardener spent his first six weeks at John Lewis in the basement selling pyjamas. Now he is bedded in as chairman.

by Malcolm Brown.
Last Updated: 31 Aug 2010

The freemason, ex-civil servant and keen gardener spent his first six weeks at John Lewis in the basement selling pyjamas. Now he is bedded in as chairman.

The chairman of the John Lewis Partnership, which runs 22 department stores and the Waitrose supermarket chain, traditionally uses green ink for anything that he wants to speed through the system. When Stuart Hampson got the job last year his senior colleagues provided him with a special four-bottle inkstand. Each bottle contains a different shade of green to match his varying moods. The hues run from emerald green (for 'dazzling') through apple and brilliant greens ('sweet and sour' and 'hopping mad') to viridian, which portends dire things for the recipient of anything written in it. The viridian bottle is inscribed 'draconian'.

Hampson is probably in an emerald-green mood most mornings when he arrives at his headquarters in London's Victoria Street but he does have the occasional apple or even brilliant green interlude. On Sunday trading, for instance: Sunday opening by competitors such as Sainsbury and Tesco in advance of the change in the law has cost Waitrose £1 million a week in lost trade. Hampson is bitter about the money, but it is the moral double-think that really irritates him. He is not a sabbatarian, he just feels that in a democratic country we should obey the laws, whether we like them or not.

When the law does change, some Waitrose branches will open on Sundays. On a purely personal level the drift towards Sunday shopping is something Hampson regrets. Sundays are a family time, he says, and when the habit of largely commerce-free Sundays changes, family life will have lost something.

His own family - wife Angela, who used to work for the World Health Organisation in Geneva, and two teenage children - is based in deepest Buckinghamshire. He commutes every day and regards home as a safe haven, somewhere he can escape from London's pressures, listen to Mozart and Mahler, and, in particular, tend to his large garden. Even in horticultural mode the wiry 47-year-old seems always to be on the move. 'I'm never happier than when I'm digging the garden, particularly when I'm what I call remerchandising it, moving the bushes round rather than just sitting and watching them grow.' He doesn't seem to sit still much in London either. Every morning, for instance, he walks up the 224 steps to his 12th floor Victoria Street office.

He is only the fourth chairman since the partnership was born in 1929 and number five will probably not get a look in until at least 2007, when Hampson is 60. The partnership seems to like longevity. His predecessor stayed for 21 years and his predecessor's predecessor, 17. The founder, John Spedan Lewis, clocked up more than a quarter of a century.

Longevity means continuity. The partners (his fellow workers) don't want somebody who will slavishly follow tradition but someone prepared to renew and reinterpret the core ideas on which the partnership is built.

Spedan Lewis launched the John Lewis Partnership on the basis of a simple but radical notion: that labour should hire capital rather than capital hiring labour. His father, John Lewis, had started the business when he opened a draper's shop in London's Oxford Street in 1864. Spedan was struck by the fact that though his father spent only a fraction of his income, he had all the material comforts anyone could want while his employees were barely scratching a living. It didn't seem right. So why not turn convention on its head? Instead of providing what was in effect unlimited reward for financial risk takers, Spedan Lewis thought capital should be restricted to a fair but finite reward and that all the profits (after costs, of course) should go to the employees, present and future.

That was, and remains, the bedrock of the partnership's philosophy. It has no outside equity shareholders and runs on co-operative principles, owned by and answerable to its 30,000 employees. Part of the profit in any year is retained to develop the business for the benefit of partners in the future. The rest is distributed among managers and staff alike in proportion to their pay. Hampson thinks this way of doing things is perfect for the retail trade. 'It works particularly well in a service organisation where the quality of what the customer receives depends very much on the commitment of the person who's giving it.' Hampson has been with the partnership 12 years and reached the board in a remarkably quick four years, before he was 40. His elevation to the chairmanship caused a minor burst of outrage when it was rumoured that the new boss was a freemason. Some of the partners, who are encouraged to discuss anything that might affect them, wondered aloud whether they wanted a chairman who gave funny handshakes and belonged to a secret society that many people believe indulges in influence peddling.

Disarmingly, Hampson makes no bones about being a mason. In fact it would have been surprising if he had not been one. His father, an Oldham policeman and freemason, had died when Stuart was four and the masons not only looked after him but paid for his education. But the helping hand stopped there. 'I've never found any link between freemasonry and my professional life,' he says.

If one were looking for something really sinister in Hampson's background then, rather than freemasonry, one might cite the fact that, from the age of 12, his ambition had been to be ... a civil servant. That, he suggests laughing, might indicate a grave character flaw.

He achieved his ambition after Oxford. He was soon on the fast track - principal private secretary to Roy Hattersley when he was secretary of state for prices and consumer protection, then, after 1979, private secretary to a succession of Conservative ministers.

After 12 years, though, something snapped. He became disillusioned. There had been a feeling in 1979 that everything was changing and he and quite a few other civil servants were ready to help change the system from within. 'But it wasn't changed from within and the negative approach to the service that Mrs Thatcher brought - civil service bashing - was demoralising.' So demoralising, in fact, that when a John Lewis ad appeared in the Sunday Times inviting 'high performers' from other fields to get in touch he did just that.

He joined the partnership in February 1982 and was immediately dispatched to the basement of John Lewis's Oxford Street store where for six weeks he sold pyjamas. 'I tried to keep it a close secret from my civil service friends so they wouldn't come and pester me.' Hampson compares two people - one from the dog days in Whitehall, the other from those first few weeks in Oxford Street - to point out what he thinks of as the essence of John Lewis. When he was working in the office of Conservative minister John Nott, he says, he had to recruit a clerical assistant. One candidate was memorable because of her almost total negativity. She wanted the job not because it would mean working for a minister but because she could escape her present job, which was to check that export promotion scheme forms had been filled in properly. 'I asked, "What do you do then?" and she said, "I pass them to my boss". "What does he do with them?" "No idea." "What's the scheme about? " "No idea."' Moving to John Lewis he found himself helping a stock keeper to sort out shirts. He was puzzled as to why there appeared to be two lots of shirts. The shirts in one pile had sales tickets put on them immediately, while the others remained unticketed. The stock keeper explained that the pile that had been ticketed came from John Lewis's own warehouse, while the others were from an outside supplier. 'He said, "We've got to confirm that the supplier has delivered the right quantities, the right styles. Until I confirm that that's right and pass the invoice we won't settle the invoice and if there's a delay in that we lose the discount we get for prompt settlement."' The contrast between the would-be bored-to-distraction clerical assistant and the stock keeper was enormous, says Hampson. 'The stock keeper, who'd been doing the job for donkey's years not only knew what his job was, but he knew what the ramifications of it were. He saw that his contribution to the profitability of the business was to make sure that we never lost that discount for prompt settlement of the bill.' In other words, everyone in the partnership feels (and is) involved.

Everyone also feels (and is) accountable, especially those at the top. Top management are given lots of freedom to manoeuvre and determine strategy, but they can be questioned on anything by the rank-and-file partners. That clear accountability, in the words of Hampson's predecessor, Peter Lewis, makes people think ahead and consider the consequences of their actions.

The main mechanisms through which democracy and accountability are exercised are the branch councils, which monitor management decisions at store level, and a 140-member Central Council which can discuss anything, including, in extremis, sacking the chairman.

Outsiders tend to think that, splendid as all this kind of thing is on paper, employee involvement in running the group is probably minimal. Not so, says Hampson. Take Sunday trading. The change in the law means that to be competitive Waitrose must consider opening, but there was never any question of Hampson and his fellow directors imposing Sunday trading by fiat. Instead, the chairman put a motion to the Central Council proposing Sunday opening if the local management recommended it.

'I put it as a proposal to the Central Council that was then voted on and accepted. When we come to open the branches it will be done by the Waitrose branch council agreeing that those branches should be open. There is real power in the democracy.' It is democratic, but does it work financially, or is there a trade-off between high-sounding principles and profit? An independent study by two academics a couple of years ago concluded that its performance was directly comparable with that of the market leaders in both the food and the non-food sectors. Which isn't, of course, to say that everything is always rosy at John Lewis. The increase in profits last year followed a depressing four-year trough of declining profits. The prolonged slump in housing probably hit John Lewis disproportionately hard because of its heavy bias towards furnishing rather than fashions, and Waitrose, a relative tiddler in food retailing, is suffering from the oversupply of space in the industry.

Hampson believes these are comparatively short-term problems that will sort themselves out, but he knows he can never take his eye off the ball. Retailing is fiercely competitive and could get even more so. If he had a nightmare it would be that discount shopping, now so powerful in the US, will spread here in a big way.

The key to John Lewis's success is the combination of high standards of service and the price guarantee 'Never Knowingly Undersold'. But widespread discounting might throw that into disarray. 'We want to make sure our customers get the things that they want and we want them to come back to us and feel they can rely on the advice we give them,' says Hampson. 'Discount shopping is inimical to that. It's based purely on price and let the customers look after themselves. If you get a mentality where all that matters is price then it's very much more difficult to go on serving our customers as well as we do.' If anything like that began to get a real grip on the retail trade then Hampson and his colleagues might have to invent whole new shades of green to express their feelings.

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