The Pioneer interview with... Sarah Gillard

The John Lewis Partnership is the UK’s largest employee-owned business through the brands of John Lewis and Waitrose, much loved staples in the nation’s shopping repertoire. Since John Spedan Lewis became involved in the business 110 years ago, it has had a strongly held sense of purpose at its heart. He was first asked by his father John Lewis to run the Peter Jones store in 1914, and he went on to set up the Trust that allowed transfer of ownership from the family to the business’s employees in 1929. It has always had a nose for what matters to the people it serves and in particular, how to provide trust in areas where it might be needed.

They honestly declared the origins of products before it was common practice and a legal requirement, they found ways of motivating colleagues, known as Partners, to be fully engaged as co-owners, interested in guiding customers to the right decisions for them ahead of an immediate sale, building lasting relationships, and they made the famous price promise to never be knowingly undersold. 

But in time, and under pressure from new competitors including those that were online only, offering the same or similar products easily and at lower prices, the business’s confidence and belief weakened and its direction became confused. 

Sarah Gillard had been with the business for some time and believed deeply in the value of these deeper beliefs applied to the current day. Alongside urgent work on new strategies to compete, she argued for a renewal of belief in why the business existed, something that surely needed to be central to any successful strategy. She led the work that resulted, as Director of Purpose and Special Projects, and through a clear, consultative process, developed renewed commitment to the idea that the Partnership exists for people – not just colleagues which is where the previous version had started, but also customers and others involved around them, and in supplying them, and in living alongside them – happier people leading to a happier business as part of a happier world.  

Sarah has since joined the charity Blueprint for Better Business as CEO, an organisation created from work that started in 2011 looking to put a more human sense of purpose at the heart of business, countering the assumptions that had grown that a business’s first motive was a financial responsibility to its owners. 

Q. Tell me a little about your background – what led you to where you are now?   

Well, going right back I did a degree in politics, philosophy and economics. However, I didn't want to be a philosopher or an economist or a politician so I took a temp job in retail and stayed for 25 years. On reflection, it wasn't a strategic decision but because I moved around organisations I was able to observe businesses and how they responded to the external context - how business thought about itself, how it treated people, how it thought of its customers, what success was, how it thought about its relationship with society and what it was actually trying to do in the world. 

I had experienced extremes in the retail industry. I began at the Arcadia group just before Philip Green bought it. An organisation with a proud history, that invested in people, in IT systems, in supplier relationships. It was the place that you went to for training because it was a Grand Dame of the High Street. 

When Philip Green bought it, it became very, very focused on short-term shareholder primacy - how much money can we make this year to maximise the dividend? This changed the whole culture. And I saw how this shift was showing up in business outcomes – the short-term looks really good because you're extracting all the value you can, including from customers. In the medium and long-term, I didn't think that was a good business strategy. But I was a philosophy graduate, so what did I know? Initially I thought well maybe this is just how business works, you have to have this very individualistic competitive extractive short-term maximising mindset because the context is so disruptive.  

What I learned during my degree finally kicked in and I began to get really curious, and it shifted my view of business, particularly retail. Instead of it being just about buying and selling stuff, I started to see it as something that was shaping how we live. 

I began thinking about whether the current paradigm of what drives business, or what has been driving it for the last 50 or 60 years, is leading to the right outcomes. And my conclusion, along with like you know, 7 billion other people, has been no, not really. 

Q. You worked for the John Lewis Partnership. What are the stories you hold most dear of the Partnership pioneering on behalf of the people it serves? 

Oh there’s lots of anecdotes. Around 2015 we commissioned an external agency to try and find the source of the magic for both John Lewis and Waitrose. But particularly John Lewis because people had a very strong emotional attachment to the brand that went beyond the products, beyond ‘I can get good stuff here’. It was a relationship and we wanted to understand what it was that created this strong emotional attachment to the brand. 

What they identified was that people had good experiences, and then something would trigger it into an extraordinary experience. You know, a pregnant woman coming into the store and being offered a seat, a glass of water and a Partner offering to get what she needed from the store. Or a Partner talking to a customer who has come in for say, a £1,000 camera. But after discussing the customer’s needs, they recommend a £200 camera.  

The focus was on customers.  

The John Lewis Partnership is the UK’s largest employee-owned organisation. It’s got a very different sense of what it's trying to do and how it how it does things. And that's what was triggering these deep personal relationships with the brand. We asked ‘well, how does that happen? How do we teach people how to do that? Do we teach Partners that you've got to constantly be going above and beyond?’ What we found was that people who wanted to work at the Partnership tended to be very driven by an honour to do the right thing, social connection and a feeling they were helping people.  

They were very people-oriented people and they were drawn to work in the organisation. 

I think over time this creates an environment where, if that's your inclination, you're going to thrive.    

I also found it absolutely fascinating that at a time when retail was very disrupted, the John Lewis Partnership had two things which everyone else was trying to invent. It had a purpose that went beyond just making money, a sort of societal purpose. And it had a culture where everybody who worked within it genuinely felt like they were owners, because they were owners of the company. And if you're an owner of the company, you think long-term, you think about fundamentals, you think about the foundations you're building and how you're planting seeds that you might not see the benefit of, but the generation after you will.  

It creates a very different environment for decision-making and for how people show up. This is very beneficial for long term business resilience. Retail continues to be a very challenging industry and John Lewis has had his own challenges but it does appear to be adapting and perhaps will be around long after many other brands. 

Q. What had the problem become by the time you started to work on reinvigorating it? 

I'd worked for years on the commercial side of the business in merchandising. When I joined the Partnership I became really interested in why it was different to all of the other businesses I worked in. I moved to the strategy department for a while thinking success must be about very clever strategy. And of course that's something to do with it, but I could see that clever strategy wasn't enough. Perhaps it was something to do with the culture that was critical to the implementation of the strategy?  

I then worked in the People space, studying the culture, leadership, operating model and governance. And I thought well, that's also really important for how this business shows up and how it makes decisions. But both strategy and culture to me appeared to arise from something else – an understanding that the business had about what it was and what it was trying to do in the world. However, I was also observing that as the partnership had scaled it was facing lots of competing pressures and that sense of purpose had become fractured.  

Everyone knew it was a purpose-led organisation, but there were 80,000 different versions of what the purpose was, which isn't that helpful because if purpose is going to create the internal energy and innovation that an organisation needs to flourish, it must provide direction and it must define success. It has to form and shape strategy and culture. If you've got 80,000 different versions of it, it's not going to.  

I'd had this epiphany… then COVID hit. For big retail organisations like the Partnership, this had a significant impact. The John Lewis stores were shut while the Waitrose stores had queues outside them, security guards on the toilet roll aisles and supply chain issues. I mean it was just absolute chaos! 

Everyone was working around the clock but what was interesting was that all the John Lewis Partners were on furlough on full pay in that beautiful spring weather that we had, yet each day 12,000 of them turned up to their local Waitrose stores to see how they could help. They weren't asked to. They weren't incentivised to. They weren't even recorded as doing so. It was just a natural desire to see how they could help. Not just help their colleagues, but how they could help the local community, how they could help vulnerable customers and how they could help suppliers. We all felt motivated to solve some of the challenges that you could see were emerging. We had people making decisions all over the place without waiting for permission. They had extraordinary autonomy and energy, which led to great innovation. 

So I began to pose questions – what's going on here? Is this telling us anything about the purpose of this organisation? I thought, to be honest, that most people would go, yeah, great question. But can we talk about that another day when we're not quite as overwhelmed? Actually people genuinely wanted to talk about it now because they could see Partners responding in ways that felt like this is us at our best. This is us genuinely powered by what can we do to help. We can contribute to some of the solutions beyond our normal circle of interest, way beyond what's the financial case for this and is there going to be a payback.  

People wanted to know if these actions were telling us something about the core of who we are. How do we make sure that we're able to articulate this core so when this crisis has passed we still had this sense of this is who we are – this is how we make decisions and this is what success looks like?  

We began the work on re-articulating the purpose of the organisation. The John Lewis Partnership has been going for over 100 years. Rather than inventing something new, or trying to create some modern whizzy statement, we were going back to why we were invented. How could we articulate this in terms that were relevant to the 21st century and how could we inspire people to continue to innovate and experiment in service of the reason that we were invented in the first place? 

It was fascinating and such a privilege to do it in an organisation like that because it's so unusual. But actually what we learnt is applicable to every organisation because businesses are people coming together to achieve something that they can't achieve on their own, whatever the ownership structure is.  

Q. How did you go about recreating shared belief in an outward-looking purpose? 

You need to create a more direct connection between the employee and the organisation. It needs to speak to a pride in what you're doing every day. You're not just selling stuff, you're trying to help people live the kind of lives they want to live. You're not just selling food in Waitrose, for example, you're helping supply chains and farmers create the best quality food with the best animal welfare standards and the best regenerative farming practices.  

Another example is a few years ago, the John Lewis Partnership had the last final salary scheme of any major retailer in the UK. It had become clear that this was going to create great difficulties for the business in the future – not for this generation of Partners, but for the next generation. There was a year-long consultation process where everyone received information about the various options and the John Lewis council with, I think, 58 democratically elected councilors, would decide whether the pension was going to change. 

After a year of talking to the Partners – and these are people on very low wages, including HGV drivers, warehouse workers, shop assistants – it came to the vote. Would this generation of partners basically reduce the size of their pension in order to allow the organisation to survive beyond their tenure? It was a unanimous vote – yes. 

That is such an interesting example of people recognising the value that the organisation has to society and they were prepared to sacrifice some of their own financial reward in return. 

If a business genuinely creates value for all stakeholders – its communities, suppliers, customers, employees – they’ll want it to continue beyond their own time.   

Q. You are committed to helping businesses ‘be more human’. As business’s relationships with customers evolve how can they balance the move to an increased digital or virtual presence with being human? 

That’s a really interesting question and one that many organisations are wrestling with. In an ideal world, the digital capabilities and AI and all the rest of it will serve to enhance the things that humans are best at - building connections and relationships, things that call for a level of understanding and empathy that is beyond words. 

In an ideal world, this is what would happen. However, the temptation is always to look at what’s measurable – number of transactions, average basket size, speed through checkout and a whole load of things which you start solving for maximum efficiency rather than necessarily maximum human connection or wellbeing or anything else that is much more difficult to measure but actually really important.   

Businesses have for a long time run themselves through things that are identifiable, measurable and quantifiable. You can set targets. You can understand the progress, and that's super useful particularly if you're trying to optimise for efficiency. But the future will look very different to the past. All the challenges, environmental and social, that we already face will get significantly worse. Businesses need to adapt, to become more flexible. 

They'll need to be more connected to the societies they serve, and this relies on people inside the organisation thinking that what they're doing is worthwhile, otherwise why would they bother to innovate or adapt?   

And for it to be worthwhile, it means genuinely serving society in some way or making life better. Some of that is measurable, but a lot will be down to people's sense of it being a worthwhile endeavour, what the value is that is being created and for whom? How is it helping us live better lives?  

The human aspect is going to be increasingly important. Efficiency used to be enough but in the future it will be efficiency plus humanity. Instead of seeing individuals in very one-dimensional roles – as investors or workers or customers or suppliers – we will need to shift to seeing us as humans who are citizens. 

Jon Alexander talks about this in his brilliant book, Citizens. If you think about somebody as a customer, you're thinking about what they want and how we serve them. What choice have they got? If you think about people as citizens, then you begin to think about what we are co-creating. How do we do this with you? How do we help people participate in whatever the future looks like? It’s a mindset shift. And that mindset shift is one of the things that the charity that I now work for, Blueprint for Better Business, helps people explore.  

It’s becoming strategically critical for businesses to think in a very different way – that people aren’t one-dimensional stakeholders, but as citizens living on this planet, living in communities. And communities and a planet that is shaped by the decisions that business makes.   

Q. How does being a purpose-led business help organisations pioneer for customers, or the people they serve? 

Blueprint was founded on two core beliefs, and neither are radical.  

The first idea is that a business is actually a group of people coming together to create value for society and that any financial returns are a consequence of doing that well – but they're not the goal. They're a necessary condition of the business being able to survive. The goal is some kind of societal value that the business creates. 

Pre-1970 that was often how business were thought of. Businesses were embedded in their communities, creating jobs and improving the community, and there was a sense of pride about it, the positive impacts that the business had within the community. 

The second idea is that people are human beings with inherent dignity and value. They’re not just assets or resources or liabilities that can be instrumentalised in service of financial goals. And when businesses start to see all the humans that the organisation interacts with, and accepts that they have inherent dignity and value, then the quality of the relationships the business creates becomes an inherent part of what it means to be a successful business.  

This creates more opportunity, more potential, more of a sense of possibility than thinking about business as a machine with inputs and outputs, with the highest priority outputs being a financial one. 

Q. Why do you think organisations find it so hard to be, and to keep on being, customer-led? 

Businesses have become very used to measuring. Everything that appears to matter is measured. However, some of the most important stuff is not measurable, so if you don't measure it, it becomes invisible even though it is critically important to the long-term success of the organisation.  

The second reason is the simplicity of the measurement model has so much tied up in it, including incentive schemes, remuneration schemes, targets, KPI’s, how people are seen rewarded, promoted. It becomes difficult to focus on all the other aspects that are important, like developing a culture where people feel that they can thrive, growing the next generation of leaders, developing the supply chain and the people in that supply chain, and the impacts on the environment that you might not be regulated on but that you care about. All these other things are critical to how people feel inside and outside about your organisation. It's easy to just ignore them. 

Just look at the pioneering stories from the brilliant group The Foundation has created – people who have kept hold of their sense of what's really important to them as a human, as a citizen.  

We need to think about what is important to other people. To gather different perspectives and genuinely find out from people themselves what they care about, what’s important to them and then think how do we solve those things?  

The British Academy and Colin Mayer came up with this phrase for the purpose of organisations: that they profitably solve the challenges of people and planet without profiting from creating them. I think that's a very natty definition.  

And the other one is the BSI has a standard of what purpose driven organisations are called – PAS808. And their definition of a purpose-led organisation is one that is pursuing its optimal strategic contribution to the long-term wellbeing of all people and planet.  

I think these definitions help ground the concept away from sort of fluffy ‘make the world a better place’ stuff to a much more targeted strategic ‘what's your contribution and how are you delivering it’ question. This helps inform strategy, shape culture, guide business decisions and define success.  

Q. Are there any examples of organisations that you particularly admire as customer pioneers in other sectors, with ‘customer’ defined broadly as the people an organisation serves? 

 I think the easy answer is all of the brilliant social enterprises out there who are very explicitly demonstrating this is why we're in business. They tend to be smaller. They tend to be very issue-specific and they tend to be very successful in saying if you're interested in this, join us, so the culture is very strong. What they do is centred around something that's tangibly helping.  

I think the area that we work in is harder – the big legacy organisations, often publicly listed, with investors looking for a return, often regulated, and who are trying to shift their organisation to be a purpose driven organisation.  

If you look on our website, you'll see case studies where organisations are trying various things and succeeding. I don't think there's any kind of slam dunk ‘this organisation nailed it’. It requires both a strategy and culture shift, and often a shift in the entire business model and product and proposition – how they're thinking about brands supply chains, procurement. It's a multi-year journey.