John Lewis not the right model for Royal Mail, says Mayfield

In an exclusive interview with MT, John Lewis chairman Charlie Mayfield says its partnership structure wouldn't work for the Royal Mail.

by Emma Haslett
Last Updated: 06 Nov 2012
Given the recent success of John Lewis, there's been lots of talk about the benefits of its unusual partnership model. For instance, it's been cited as the inspiration behind Vince Cable's proposed reforms for the Royal Mail - the Business Secretary wants to privatise the business and give a share of the company to employees, the idea being that they'll be more engaged and work harder if they've got a bit of skin in the game. But according to John Lewis chairman Charlie Mayfield, trying to impose a John Lewis-style structure on the Royal Mail now would be a mistake: 'It's the wrong model and, sadly, probably 20 years too late.' he told MT. 'If you simply endow somebody in an impossible situation with a share certificate, it doesn’t solve anything at all.' Time to think again, Vince?

It's been a remarkable few years for the John Lewis Partnership, which continues to top polls of the UK's favourite retailers, and, importantly, continues to make money. Only this weekend, its food business Waitrose reported that its sales jumped by nearly a quarter ahead of the Royal Wedding, as people stocked up on bunting and champagne. Apparently, Heston Blumenthal’s special royal trifle sold out, while sales of bin liners, foil and cling film were all up, and the number of sponges sold jumped by 370% (although we’re not entirely sure what that amounts to, in real terms).

So it's no wonder that other organisations are looking at the company enviously. The trouble is that it's been run like this for decades; others can't expect an overnight transformation by adopting a similar approach now. And certainly not just by giving some shares to employees, since as Mayfield points out: 'Our partners don't own shares - the Employee Benefit Trust does. That leaves us free to focus on the culture, not the share certificate’.

Mayfield is careful to try and steer clear of politics; he admits that '2011 is going to be tough', but largely refuses to be drawn on whether the Government's pace of change is correct. But his ownership model is becoming a hot political topic - with a little help from his own op-eds on its benefits relative to the old listed stock model. So it'll be interesting to see what the Government's oversight group on the subject - of which Mayfield is a part - eventually comes up with. Clearly it won't work for everyone.

- John Lewis chairman Charlie Mayfield is the subject of this month's MT Interview. Read it in full HERE

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