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Strategic Management and Leadership for John Lewis Partnership

Free «Strategic Management and Leadership for John Lewis Partnership» Essay Sample
  1. Leadership

John Lewis Partnership’s style of leadership has played a vital role in enhancing the company’s success. The management has set up a way of practice that enhances employee motivation and engagement (Glancey, 2014). JLP employs a democratic style of leadership (Dunnett, 2015). It is a participative approach to leadership. The employees, who are also partners, are involved in the decision-making processes of the company through various channels. For instance, at the local level, JLP employees have a PartnerVoice platform where opinions and ideas are aired (Dunnett, 2015). These opinions and ideas are then conveyed to the top management executives through the representatives chosen by the employees themselves. The representative merely represents what has been agreed on and does not act on his own accord or on behalf of the rest of the employees (Bai & Morris, 2014). Further up the chain, there are other platforms, such as the Partnership Council, the Partnership Board and the chairman, who listen to the employees’ feedback (Dunnett, 2015). The democratic style of leadership has been supportive of the company’s endeavours, because it accords the employees greater freedom and responsibilities, which enhance employee engagement, motivation and satisfaction.

To ensure the effectiveness of the democratic style of leadership, JLP engages inspirational employees. The group’s chairperson, Charlie Mayfield, is charismatic and extremely influential (Dunnett, 2015). From time to time, he takes a position behind the desk in one of the local stores and interacts with the employees. His approach is based on the path-goal theory of leadership (Mayfield, Purnell & Davies, 2012). According to this theory that was advanced by Robert House, the more the leaders engage in behaviours and activities that support their subordinates, the higher the employees’ performance and motivation. Charlie Mayfield has brought an achievement-oriented approach that is well synchronized with the values of participatory decision making.

The managing director, Andy Street, and the IT director, Paul Coby, have been instrumental in driving innovation and personal growth through the visionary leadership (Wood, 2014). This is done accordance with Bernard Bass’ transactional and transformational theories. The transactional leadership theory advocates for the promotion of reciprocity between the management and employees to create an inspirational business environment (Syedain, 2009). JLP leaders and employees are extremely friendly to one another hence creating a friendly environment that improves efficiency, motivation and satisfaction. The transformational theory advocates for intellectual stimulation of employees and safeguarding of their interests by the top management (Bai & Morris, 2014). Through the various motivational talks and seminars arranged by Andy Street, the employees’ bond with the management and the company increases leading to increased productivity and profitability.

The employees’ sharing of the company’s profits is a great motivator and facilitator leading to the company’s success. It not only makes them work harder to earn more, but it also increases their sense of belonging as they view the company as their own. This is in line with the various employee motivational theories, such as Maslow’s hierarchy of needs and McClelland theory of achievement motivation. Employees crave for higher benefits, which causes them to work harder to satisfy their needs. The more they achieve, the more they get motivated and, consequently, the higher they aim.

  1. Innovation Strategy

JLP is one of the most innovative companies in its industry. For a long time now, JLP has been using innovation to improve efficiency, productivity and flexibility, especially through using cutting edge technology and the internet (Mari, 2015). For instance, it was among the first companies to adopt the electronic point of sale systems when they were introduced in the early 1990s. They have remained at the forefront technology-wise and are regarded as an innovation leader among retailers in the UK. In the past five years, JLP has pumped more than £80 million to update the technology and enhance innovation, and the company plans to increase this investment (Trunick, 2015). JLP’s innovation strategies have enabled it to stay ahead of competition such as Tesco and Marks & Spencer.

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The flagship innovation strategy for JLP is its omni-channel retail system. This system enables customers to shop across all the points and stores to buy goods using several channels availed by the company (Alexander, 2014). The omni-channel approach is an integrative system that enables the customer to have easy experience from researching about a product in the portal to making payments and physically collecting the products. Currently, JLP utilizes the online, in-store and mobile platform channels (Wood, 2014). Prior to the advent of the omni-channel retail system, it was not possible to integrate online purchases with the in-store ones. With this innovation, one can research on the internet, make payments online and pick the commodities up at a local store. Furthermore, the system makes it possible to track the customers’ tastes and preferences by keeping a record of their consumption, with their consent (Mari, 2015). This allows to improve the customer’s experience online by personalizing the services, especially through ‘click and collect’ and ‘click and commute’ platforms. What is more, the omni-channel system enables the company to track the products from when they were manufactured to when they were sold, regardless of the channels through which they passed through.

Another strategy is updating supply chain systems. The firm has recently adopted the Enterprise Resource Planning (ERP) platform to facilitate better and efficient stock management thus reducing the stock holding costs (Mari, 2015). Oracle has been a long-time partner and has helped to design tailored platforms for JLP. The adoption of the Adobe CQ5 software enabled it to design and launch a new website in 2013 (Mari, 2015). This represented a greater leap of improvement from its previous website that was not very interactive. The current website has been optimized to be more visible as it ranks highly in search engines (Wood, 2014). It is also interactive and enables clients to communicate with the company beyond the website hence enhancing their positive experience.

JLP has also started incubation programs to promote innovation. In 2014, for instance, it initiated a 3-month program known as JLab, where it provided office space to five start-up companies with the ideas that could benefit JLP (Wood, 2014). From these five, JLP was to choose one with the most viable idea and promote the idea with a capital investment of £100,000 (Wood, 2014). The most viable idea would then be commercialized and adopted in all its stores across the UK. The idea was supposed to focus on improving in-store service delivery, employing real-time-data-based decision making and enabling the customers to personalize their accounts and services. JLP plans to adopt this incubation-driven innovation to net those ideas that enhance its competitive advantage. The IT director, Paul Coby, has been on the forefront pushing the adoption of this strategy. As a result, the company has pledged an extra £80 million to run this programme between 2015 and 2018 (Dunnett, 2015). Other companies, especially technologically-driven ones, have successfully used this innovation strategy, and, thus, it should prove beneficial to JLP in the long run as well.

  1. Factors that Might Make Success Difficult in the Future

JLP is experiencing unprecedented success at the moment. Even though its profitability has dwindled in the near past resulting in a decrease in employee bonuses, JLP is still the most recognizable retail store entity in the UK (Mayfield et al., 2012). However, these recent slumps show that JLP is susceptible to losses despite the good reputation it enjoys at the moment. One of the factors that may make it difficult to enjoy success in the future is increased competition. Assessment of the retail industry using the Porter’s Five Forces shows that the threat of competition is extremely high. Companies such as Tesco and Marks & Spencer have been making ground and reducing the margin that JLP has previously enjoyed in the UK retail industry.

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Since the company’s operations cover a variety of industries ranging from food, finance, insurance, apparel to household products, the number of competitors is extremely large (Glancey, 2014). These competitors are spread out throughout these industries and pose a threat to JLP’s market share. The company should consider strengthening its competitive advantage through innovation and other value adding resources. Moreover, specialization is not a viable option at the moment. JLP has to face the competition and outdo it. Implementing innovations to improve customer experiences, for instance, through home delivery should enhance its reputation and retain its market share.

Another factor is the bargaining power of the buyers, which is high. As a result, the buyers have an ability to directly or indirectly influence the JLP’s policies and pricing (Glancey, 2014). The higher the bargaining power of buyers, the more influence they have and, thus, the higher the chances of failure for a company due to the lack of control. JLP’s customers have a wide variety of alternatives, and there is a very low level of customer loyalty in retail industry. The switching costs are negligible. To hedge against this risk, JLP should explore ways of increasing switching costs. It should pursue differentiation based on customers’ preferences. The idea is to offer the perfect product to consumers such that it becomes hard for them to try other products. For instance, the purchasing experience of using credit cards should be seamless and instant. Once the customers experience quality services, it becomes hard for them to shift their loyalty elsewhere.

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Another factor that may cause a downfall is the high level of technology adoption that is not matched up with qualified employees (Wood, 2014). JLP is driven by innovation of technology to enhance value. This means that new systems will be introduced to the employees every now and then, for instance, a more updated EPoS or omni-channel platform. This change presents a challenge to the vast majority of employees, some of whom are senior citizens who may encounter difficulties in coping the digital disruptions. The company should increase the size and functions of its IT department to help other employees learn to utilize the new technology, at least until the employees become proficient.

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