If the past week’s headlines around Sports Direct and BHS remind us of anything, it’s that business success starts with your employees.
Culture is a key factor, as is showing your staff that you, as the head of the company, are in it for the long haul.
Take Marks & Spencer as a case in point.
The retailer has taken some flack in recent months. Following coverage of its less than positive clothing sales figures – the worst in a decade – Steve Rowe announced, just a week later, a tactic that he believed would generate reassurance both among shareholders and customers.
His plan? To create a shareholder panel, made up of ‘Mrs M&S’ – yes that term again – that will advise the board and shape the retailer’s turnaround strategy.
Specifically, the views of women aged 50-plus will be used to help M&S get its clothing offer back on track.
We’ve all heard the saying ‘the customer is king’. M&S needs to balance shareholder needs with insight from its customers – and has to show us all that it’s in it for the long haul.
Creating this panel is one element of that process and also a very positive step forward for the retailer. But it alone won’t solve M&S’s clothing woes. Rowe also needs to look closer to home: to the shopfloor.
Customer feedback should be supplemented with insight from the people serving those customers. The people who live and breathe the retail environment, and are tasked with representing and selling the brand at the point of purchase.
First, however, Rowe needs to look at the workplace culture. To get the most from staff, they need to be incentivised. This is where John Lewis does so well.
Its famous partnership model, where staff are all part-owners, means they each feel in some way responsible for the retailer’s success.
“To get the most from staff, they need to be incentivised. This is where John Lewis does so well”
Nick Gray, Live & Breathe
Those at the top behave in the same way at those on the shopfloor. It’s why John Lewis goes from strength to strength – it invests in people rather than simply filling the pockets of its board members.
Another fantastic example is Majestic Wine. The brand’s chief executive, Rowan Gormley, recently directed that his shares bonus, offered to him as part of a long-term incentive plan, be distributed to staff, netting them a potential windfall of more than £7m.
M&S has the backing of the nation – 81% of shoppers say they want it to remain on the UK’s high streets, rising to 83% among women. But Rowe needs to change industry commentators’ opinions and disseminate down from there.
All eyes are on brands and retailers post-Brexit, both in terms of business performance and contingency plans. Even when there’s a cataclysm at the top, Sports Direct for example, business leaders have a responsibility for those in their employment.
The victors of these turbulent times will be the ones that have the loyalty and support of their store staff, who must be as evangelical towards the brand as the board are. If you’re a certain Sir Philip Green or Mr Ashley, however, you’re more likely to endure a public dressing-down.
- Nick Gray is managing director of retail marketing agency Live & Breathe