Magazine article Management Today

The MT Interview: Andy Street

Magazine article Management Today

The MT Interview: Andy Street

Article excerpt

As befits the founding principles of the brand, John Lewis's managing director is a model of old-fashioned propriety. But our Most Admired Leader for 2014 is also a shrewd moderniser and no stranger to controversy.

In John Lewis's calendar, there used to be but one red letter day: the ritual announcement of the annual bonus in March when the 90,000 suspense-filled partners discovered their cut of the annual profits. In 2014, it was 15% of salary for each one, the equivalent of eight weeks' pay.

Now there are two RL days at JL. And MT meets Andy Street, its new Most Admired Leader, on the excited eve of the second: the release of its Christmas ad. The pounds 7m push this year, featuring a heart-warming little piece of schmaltz about a boy and a penguin, provoked the desired media frenzy - it quickly received 13 million hits on YouTube - and, with luck, will have punters flocking into JL shops and onto its website to blow their cash.

Street has been MD of John Lewis for seven years and his is an unusual job. There are few bosses whose function every day is to focus on achieving a success for their business that is defined as being measured 'by the happiness of those working in it and by its good service to the general community', as stated in the JLP constitution. He is not one of the rat pack of UK retail - a night out with Philip Green at Boujis would be a non-starter.

Is the command of Spedan Lewis, who handed ownership of the company over to the staff in 1929, ringing in his ears when Street slips from beneath his luxury Hungarian goosedown duvet (10.5 tog) each morning? 'What's driven me all these years is a desire to prove that our business model is not only different but superior. The day of the bonus announcement is when what we do becomes real.'

They believe in the JL method more than ever. JLP's turnover overtook Marks & Spencer last year and confirmed it as the post-crash darling of the UK high street. With Tesco in a turmoil of hubris, horse meat and SFO investigation, the virtuous path of solid bourgeois shopkeeping has become an even more powerful competitive advantage. The soul of decorum, Street won't comment on Tesco, but notes: 'I have no wish to sound sanctimonious, but the moral compass by which we run this organisation is always in play. Everyone expects this of us: customers, suppliers. They have confidence in our principles and values.'

Never knowingly undersold. It had a rough ride a couple of years back when it extended the payment terms for some suppliers, but the damage was contained.

Street has become JLP's public moral voice. Along with Justin King, then of Sainsbury's, he was one of the few to speak out about non-payment of tax by foreign companies, protesting: 'I feel strongly that if we make pounds 100m and pay 23%, and Amazon makes pounds 100m and pays nothing ... that is not right.' But has the government responded to lobbying and started tackling this? 'It has been as good as we could have expected,' he says. 'The PM tried to address this at the G8. What more could we ask? But there is no change in Amazon's arrangements.'

Street is the first Most Admired Leader who is not the overall boss of his organisation. Charlie Mayfield chairs the John Lewis Partnership and indeed Mark Price, 'The Chubby Grocer' and head of Waitrose, is the deputy chairman. It's been rumoured that the pair are serious rivals, favourite generals competing for the affections of the dashing ex-Army and former McKinseyite Mayfield.

There's a hint of a smile. 'There is a healthy, beneficial rivalry. We run our own profit centres (Waitrose had gross sales in 2013-14 of pounds 6.1bn and operating profit of pounds 310m; the figures for John Lewis are pounds 4.1bn and pounds 226m), but it is a bigger business, with tighter margins. We've grown up together. I admire him. Their waters are more turbulent than ours. The world of non-food is more benign. …

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