HAMISH MCRAE: John Lewis is a rare beacon of hope

When there are seismic shifts in the economy, the companies that will triumph are those that can get ahead of social and economic change rather than be beaten by it.

And that is why the John Lewis Partnership should be a beacon for other enterprises faced with a massive challenge.

For some firms, obviously the US high-tech giants, the past few months have been one of those once-in-a-lifetime opportunities to stride even further ahead.

Adapting to the crisis: John Lewis is looking at converting empty shops into housing 

Amazon has just reported that its revenues are up 40 per cent in the second quarter. For a giant company, that scale of boom is off the charts. It is getting five years of natural growth in a couple of months.

It is not alone. In the space of a few hours Amazon, Facebook, Apple, and Alphabet, the parent company of Google, all beat Wall Street’s estimates of their earnings. Their shares duly shot up.

But if you are in a business that by its very nature has benefited from the impact of the coronavirus, then that is what happens. If you run department stores and supermarkets in British cities, as John Lewis and Waitrose do, it is very different.

This is not about coping with a boom. It is about survival. That is why what they are doing is a beacon for other businesses.

I confess to being an admirer of the Partnership, partly because it is the most successful employee-owned business in the land, but more because of its service and quality.

You know the joke that if you get an early warning of some impending disaster, get to your nearest John Lewis because nothing bad ever happens there.

Well, something very bad indeed has happened to high street retailing and the company has already announced that eight out of its 50 department stores are going to close. We have now got some details of what, under its new chair, Dame Sharon White, it plans to do with the space.

Firms must be prepared to change if they are to triumph 

It will be used for private and affordable housing. More and more of the business will be pushed online, with the John Lewis department stores expecting to generate up to 60 per cent that way, and Waitrose up to 20 per cent.

This is naturally devastating for the partners who will be made redundant. Nothing can take away the pain of that. All credit to its people who have come up with ideas for expansion, including a move into horticulture.

But the main message here is that we can be confident that the group will survive, not something than can be said about some other retailers.

So it is always better to assume that the changes will be greater than most people expect and plan for that, because you can always row back later.

There is a general example of this now in the shift to online working. We have no idea whether if will be viable in the long term for businesses to have a majority of staff working from home.

NatWest plans for 49,000 of its 65,000 people to carry on working from home until next year

NatWest plans for 49,000 of its 65,000 people to carry on working from home until next year

A lot of employees like it, or say they like it, but what works for a few months does not necessarily work for years. If staff are used to working together they can carry on doing so. But how do you build morale, train new recruits, give a business drive? 

NatWest plans for 49,000 of its 65,000 people to carry on working from home until next year. Barclays also has many staff home-working, but wants to get people back to the office.

Its chief executive, Jes Staley, explained: ‘We want our people back together, to make sure we ensure the evolution of our culture and our controls, and I think that will happen over time.’

That must surely be right. Culture and control are two key elements in every business and both can go dreadfully wrong. The banking industry can give us plenty of examples of that.

But the chances of something not being picked up are surely even greater if your people aren’t in the office and you can’t see what they are doing.

It is easy to see the winners from these searing changes to all of our lives. It is easy to spot the losers too. I am afraid it will take years for travel and tourism to recover.

The hard thing to judge is how well companies in the middle – neither obvious winners nor obvious losers – are coping. But as a general rule it is those that make the radical, often painful, decisions early that will end up stronger.

And those that wait, like Charles Dickens’ Mr Micawber, for something to turn up, will find that it doesn’t – or at least not in time to save them.

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