In any other week, the news that the boss of Britain’s largest retailer is to leave his post would headline any people news bulletin. But in a remarkable couple of days that has also seen Argos’s John Rogers join Dave Lewis in announcing his (more imminent) departure, the restructure announced by John Lewis Partnership (JLP) simply has to take top billing.
To recap, JLP has announced that, going forward, it plans to organise and manage the Partnership as a single business rather than as two separate business units. Led by the chairman designate, Sharon White, a newly created seven-strong executive team will have responsibility for JLP’s overall strategy and performance. Divisional boards will be dissolved and there will no longer be separate managing directors for the John Lewis and Waitrose brands.
This is radical stuff that has huge implications not just for JLP’s strategy and structure but for the culture of the organisation.
Leaving aside the business rationale, the transition to this new operating model will unquestionably be difficult and at times extremely painful.
We know already that 75 senior management roles out of a total of 225 will go. But the disruption will not stop there and we can expect significant churn in head office roles in the years ahead as people that are accustomed to the old way of working decide the new structure is simply not for them.
Perhaps the greatest challenge facing White as she takes on her first retail role will be less about how to deal with the external threats to traditional retail – huge as they are – and more about how she manages the relationship between Waitrose and John Lewis teams as the two brands integrate.
Bringing together two large businesses that operate in completely different spheres is a monumental task culturally as well as operationally. There is likely to be a certain amount of antipathy between partners previously tied to a single division who will now be asked to function as a unified business.
Senior management will have to work hard to avoid creating a feeling that one division is being subsumed into the other. It is perhaps instructive that outgoing Waitrose MD Rob Collins has admitted that he could see no role for him in the new structure. Looking at the executive director appointments to-date, one thing that stood out to me was the absence of a senior Waitrose executive among the list. True, there are trading and strategy roles yet to be filled but the impression given is that John Lewis – much the smaller business by revenue – has immediately become the dominant brand within the new structure.
The lack of a ‘foodie’ at the very highest level should also give cause for concern operationally. JLP has historically been averse to hiring from outside of the business, but with Collins leaving I would want to see an external big-hitter in the mould of Stuart Machin (now running M&S’s food business) brought in to ensure there is a senior executive with specific grocery expertise sitting on the new Partnership board.
With its democratic ownership model, JLP has always had a unique purpose that sets it apart from its high street competitors. For this reason, I’ve no doubt the process of change will be managed in a sensitive and collaborative way as possible.
In five years’ time, we may find ourselves reflecting on an object lesson in successful change management.
But no one that takes that journey with JLP should be under the illusion it will be anything but a bumpy ride.