Charlie Mayfield on a winning employee ownership model

It’s fitting that the John Lewis Partnership’s radical employee-ownership structure was founded by John Spedan Lewis in 1929 at the start of the Great Depression. Fast forward some 80 years and the business finds itself operating in similarly challenging times, led by a chairman who believes it is the partnership’s moment.

Charlie Mayfield, the well-spoken former army officer, says – with typical understatement – that the partnership’s unique business model shines as a beacon of accountability while all around traditional capitalism loses its head.

“In terms of the John Lewis Partnership’s relevance and potential, one thing I hope – in light of the past 18 months – is that there will be views on creating different ways of running a business, some financial and some social. There is a desire to see accountability and businesses taking a responsible role. There are a number of ways this can happen. A lot of conventional businesses can work that way, but employee ownership is another option,” says Mayfield.

69,000 employees at the John Lewis Partnership share in the ownership of the £6.9bn turnover business, which opened its 28th department store this week in Cardiff and has 215 Waitrose branches nationwide. The John Lewis Partnership is as famous for its unparalleled customer service and employee bonus, as it is for its Middle England leanings and reliability.

Mayfield could be said to comprise all that the partnership stands for; his well-heeled roots at Radley College and Sandhurst; his diplomacy and mix of calmness under fire and his old-school charm.

When Mayfield became chairman of the partnership in March 2007, it was said by outgoing chairman Sir Stuart Hampson that the clean-cut former Scots Guard would bring “fresh ideas” to the fore.

“Tamper with it at your peril, Mr Mayfield,” one supporter warned on the Daily Telegraph’s website, which was deluged with similar remarks.

However, far from charging in and radically overhauling all that had gone before, Mayfield pledged to stand true to the partnership’s ideals of democracy.

Two and half years into his tenure and Mayfield has steered his troops through the recession and waged a campaign against falling spend on the high street. He says the partnership’s success is down to the happiness of its workforce.

“The John Lewis Partnership is about how it treats people and how it treats its customers,” he says. “Part of that is the way in which shareholders hold management to account. We have done a lot of work to rejuvenate that.”

He adds: “It might sound fluffy but it is all important,” sounding far from fluffy. “A partner who works on the shopfloor in John Lewis or Waitrose must feel that there is a spirit of accountability. That is the basis on which people work well.”

But there has, in the past, been an element by which the partnership has been seen as closed off to the outside world and set in its ways.

Jason Gissing, one of the founders of Ocado – the online grocer that partners Waitrose and in which the John Lewis Partnership pension fund has a 28% stake – told The Guardian last year the partnership is “a pain in the arse to deal with at the corporate level” and added that “they don’t speak with one voice”, something Mayfield politely skirts around before firmly adding that he will “not apologise for the partnership”.

“I have always believed that the John Lewis Partnership faces outwards,” he says firmly.

The appointment of Mayfield as the fifth chairman in the partnership’s history was not without internal upset.

Much was made of Mayfield’s comparative youth – he turned 40 on Christmas Day 2006, weeks after his appointment was announced and three months before he took up the reins – and his lack of pure retail experience.

Mayfield says: “Because in the John Lewis Partnership the chairman has historically done the job for some time, the appointment of the successor has meant the appointment of someone quite a lot younger. In the John Lewis Partnership there is the view that continuity is important.

“When are you too old or too young to do your job? Quite a lot of it is about your mindset. My mindset was: ‘Look, I feel ready to do it and in a way which reflects the experience I do have’.”

A question of leadership

Mayfield is uncomfortable talking about his leadership style outside the context of his executive team.

He says that he and his team are “developing” their leadership style and ideas. Mayfield’s priorities for the partnership include “renewing what it means to be a partner”, “strengthening the customer offer and focusing on multimedia”, “growing the business profitably and making the business model resilient”.

He says: “The role of the chairman is not to run the division but about the long-term health of the business as a whole. The chairman is most formally accountable to the shareholders. Leadership is not about having every answer but about how you get the best out of your team or organisation. It’s actually quite helpful to not have done the traditional route.”

Mayfield, who left school to go straight on to the army, says he “had a great time” at Sandhurst. He says: “It put me in a position where I had responsibility at a very young age.”

Five years later, Mayfield left to go to Cranfield business school and in 1992 he joined SmithKline Beecham, where he was marketing manager for Lucozade. In 1996, he joined McKinsey & Co where he consulted for consumer and retail businesses.

Mayfield showed his entrepreneurial flair after joining the board of John Lewis as development director in 2001. He played an integral part in the acquisition of Buy.com in 2001 – which became Johnlewis.com, putting it several years ahead of its rivals online.

He became managing director of John Lewis 2005 before stepping into the chairman’s shoes in March 2007, taking over as Hampson announced record profits of £319m and an 11% increase in sales to £6.4bn.

However, the partnership has not been immune to the recession. Plans announced by Mayfield in his first year to double the size of the partnership over a decade, have been put on the back-burner as the property pipeline mothballed. But Mayfield has negotiated the necessary change of tactic in a typically measured fashion.

Throughout the downturn, the partnership has kept investing and become increasingly innovative. It has launched a small format home store for John Lewis and adapted to the flight to value by introducing a Value range for John Lewis and an Essential range for Waitrose.

It has countered a fall-off in home sales by successfully driving fashion sales at John Lewis, with innovations such as an injection of high-end brands in stores and online.

Mayfield adds that technology “will transform retail” and that it has the potential to make as big an impact on retail as the rise of the supermarkets.

“I feel that the business is in good shape,” says Mayfield. ”Confidence is high. We have got lots to do but we are making enough progress.”

The John Lewis Partnership website states the chairman “has personal responsibility for ensuring the partnership retains its distinctive character and democratic vitality”. There will always be a part of the John Lewis Partnership that is forever Middle England and Mayfield is the embodiment of its principles, but he is also directing the retailer towards a new chapter in its history.