By: Michael Simmonds
Whether you’re part of the FTSE 100 or a tiny NGO, a great reputation among UK policy and decision makers can make life a lot easier.
Populus asked its panel of 250 MPs from across the House of Commons to tell us which organisations and individuals are getting it right when it comes to building trust and gaining support from politicians.
The announcement that Mark Price, the cruelly dubbed ‘fat grocer’ who has led Waitrose’s great expansion over the last nine years, is to become Francis Maude’s replacement as Trade Minister is yet another sign of the respect that politicians of all parties have for the John Lewis Partnership.
One in ten MPs named JLP their ‘big business’ of the year. And it’s not just the fact the business performs so well. Although the Partnership’s like-for-like sales increase of 4.1% (or 5.1% if the soon to be Lord Price’s Waitrose is excluded) over Christmas contrasted very favourably with the more anaemic performance of rivals like M&S or Next, the evidence suggests that politicians love John Lewis for the way it operates as much as for its financial success.
Are there lessons here for other businesses? The easy answer is, of course, yes.
Its leadership has successfully identified trends and invested heavily in securing its future – few would have predicted that John Lewis would so successfully embrace the internet (online now accounts for 40% of John Lewis’s sales).
MPs like corporate transparency and so are impressed by the fact that the employee owned business publishes its results with the same openness that is required of publicly quoted companies but, unlike its competitors, scrutiny of the results has no effect on its share price.
The business media’s focus tends to be on sales not on margin (less impressive than many of its rivals) and the company does not face the detailed scrutiny of the City’s investment houses. Similarly, JLP’s decision to keep its defined benefit pension scheme and sector leading bonuses stands out in a sector that has been excoriated by MPs for its use of zero hours contracts. However, the easy answer is not always correct.
The National Health Service, which was the public sector institution most admired by MPs in our survey, also has a business model that is hard for other organisations to learn from (should they so wish).
After a year in which the NHS was at the centre of political debate at the General Election, it retains its peculiarly British position of being both widely loved and at the same time criticised for being overly bureaucratic.
The election of a Conservative Government committed to spending an extra £8 billion a year by 2020 (alongside £22 billion in efficiency savings to fill an estimated funding gap of £30 billion) and to creating a “7-day” health service (with accompanying rows with hospital doctors, nurses and GPs) means that the NHS is going to remain at the centre of ferocious political debate: a debate that will be played out against a backdrop of public concern about waiting times, staffing levels and the quality of care.
After years of growing satisfaction with the NHS coinciding with increased funding under Tony Blair (reaching 70% in 2010), analysis of British Social Attitudes data by the Kings Fund show satisfaction with the NHS among the general public fell back from 65% in 2014 to 60% in 2015. Reasons given for being satisfied include the quality of care and that it is free at the point of use, the range of services and treatments available and the attitudes of staff. Of the 23% of respondents who expressed dissatisfaction, waiting times, staff shortages, underfunding and wasteful spending were the top four reasons given.