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The John Lewis Partnership is the largest example of worker co-ownership in the UK and Sir Stuart Hampson was at the helm of this Partnership as Chairman until 2007. Hampson believes that other companies, both public and private sector, can learn from John Lewis’ approach to employee engagement, which he explained to the London Business Forum (LBF) is a concept that “is very much in fashion.”

This radical approach to business was the brainchild of John Spedan Lewis, Hampson explained to the LBF. With the happiness of his employees at the forefront of his mind, Spedan Lewis was unsettled by the fact that he, his father and his brother between them were enjoying earnings equivalent to those of their 300 employees put together.

When Spedan’s father died he bought out his brother and implemented his idea of employee ownership across the business. He founded the Partnership Trust to whom he sold his share creating a business “owned by the staff and for the staff”.

The JLP still benefits from this brave move today, Hampson told the LBF. The company has sales of £8.2bn and has just declared profits of £368m, £195m of which has been shared by its 76,500 employees – 18% of each partner’s earnings. The benefits to partners though are more than just money; they have access to clubs and societies, theatre tickets are subsidised and the company even owns five ocean-going yachts. With all this revealed, it’s hard to imagine who wouldn’t want to work for John Lewis!

Why, Hampson asked the LBF, is the JLP considered “Britain’s favourite retailer”? Why in times of economic uncertainty is it continuing to grow its market share? “The simple answer,” he said, “is that employee engagement works.” Citing Charles Handy, Hampson shored up this belief with evidence from history: “In battle, very rarely do mercenaries beat an army of citizens.” People are more motivated when they feel a part of something great he continued, “Most employees want to feel really proud about the business they work for.”

Supermarket work, Hampson admitted, involves “a lot of hard physical work that is routine.” The role of a manager in this environment, he believes, is to encourage “a sense of engagement and fulfilment out of what could be a routine job.” Maintaining high levels of employee happiness and motivation leads to great customer service and, of course, increased profits. Creating this level of engagement, Hampson argued, involves showing staff that they are part of something bigger: “If you’ve got that sense of a name, a brand, that people are proud to identify with and you marry good management to that then that’s a hugely powerful combination.”

The values that guide the partners underpin their relationships with each other, with their customers and suppliers. These values, Hampson explained, guarantee a culture of both trust and loyalty:

John Lewis' Values:

• Be honest
• Give respect
• Recognise others
• Show enterprise
• Work together
• Achieve more

When recruiting Hampson believes in the adage: “Recruit for attitude, train for skills.” Even if someone is really good at their job he suggested, if they do not embody the values of the business then the tough decision should be made that they need to go. Ensuring employee happiness, he believes, is crucial and often employee engagement has nothing to do with “conventional incentivisation” but the feeling that what you are doing is “more than just a job”.

Hampson gave examples of partners who went above and beyond to do the right thing: One partner hearing that a customer’s elderly mother was struggling with the summer heat delivered and installed an electric fan herself because holiday hours meant it would not be delivered until after the Bank Holiday weekend, when it was truly needed. It was not from the partner that Hampson learnt about this but from the customer and, he concluded, it demonstrated that if you recruit the right people they don’t need to be trained but rather left “[to] be themselves”.

Despite all these benefits, the JLP model hasn’t been widely copied. Why? Hampson believes there are two main barriers. The first is that financiers and shareholders still fail to appreciate how powerful this depth of employee engagement can be, they are concerned at what would happen if some of the profit is taken away from shareholders and distributed amongst employees. The second is, Hampson suggested, leadership: “Too many executives are concerned with demonstrating their own impact on a business and creating something that will, frankly, help them with them with their career.”

“Making money and creating happiness are not a contradiction,” Hampson concluded. It is clear he is a true advocate of the John Lewis model and the power of employee engagement more broadly. However, that the concept is fashionable doesn’t necessarily mean employee engagement has been truly embraced across organisations. Hampson doesn’t contest that it takes “courage to embrace the full effect of employee engagement,” but the JLP, he believes, proves that really engaging employees is worth it.