Spedan's Partnership: The Story of John Lewis and Waitrose

Peter Cox's latest book "Spedan's Partnership - the Story of John Lewis and Waitrose" tells how a tiny Oxford Street fabrics shop grew to become the most successful employee-owned business in Britain. John Lewis, who opened the shop in 1864, wasn't interested in worker participation. Far from it. It was his son Spedan who decided there must be a fairer way of doing business. He was shocked to discover that he, his father and his brother took more income out of the enterprise than all their 300 employees put together. While recovering from a severe illness in 1910 he worked out how to give the shop's workers a stake in the business. Nine years later he set up his 'Partnership', distributing most of that year's profits in shares to his employees. In the 1920s, he fought further illness and financial difficulties. A period of rapid expansion for John Lewis in the 1930s - including the purchase of an insignificant food chain called Waitrose - was abruptly ended by the Blitz, which destroyed the Oxford Street flagship and three other Partnership stores. It was twenty years before the main shop could be rebuilt and the business start to recover. Now, exactly a hundred years after Spedan's original idea, the Partnership employs over 70,000 people and the annual Bonus paid on top of each Partner's salary has averaged 16 per cent over the last fifty years. Both John Lewis and Waitrose constantly top customer opinion polls, and Waitrose, nearly sold off in the lean years, now achieves sales and profits greater than its parent. This book explores how it all happened, and looks at the unique organisation of a business whose stakeholders are its own employees, not anonymous external shareholders. The global banking meltdown has revealed the deep-rooted flaws in a society where capital employs labour, where there is little real accountability to hold an enterprise's managers in check. But here is a highly successful business in which labour employs capital, its managers accountable to its employees. Cooperatives have been unfairly derided for years, yet the 'John Lewis' model thrives. Why?