When seismic shifts in the economy take place, the companies that will triumph are the ones who can lead social and economic changes rather than be defeated by them.
And that is why the John Lewis partnership should be a beacon for other companies facing a huge challenge.
For some companies, of course the American high-tech giants, these past months have been one of those unique opportunities to get even further.
Adapting to the crisis: John Lewis plans to convert empty stores into homes
Amazon just reported that its second quarter revenues were up 40 percent. For a giant company, that scale of growth is off the charts. It takes five years of natural growth within a few months.
It is not the only one. In a matter of hours, Google’s parent company Amazon, Facebook, Apple, and Alphabet all beat Wall Street’s estimates of their earnings. Their shares skyrocketed.
But if you’re in a company that has naturally benefited from the impact of the coronavirus, that’s what happens. If you run department stores and supermarkets in British cities, like John Lewis and Waitrose do, it’s very different.
This is not about dealing with a boom. It’s about survival. Therefore, what they do is a beacon for other companies.
I must confess that I admire the partnership, in part because it is the most successful company owned by employees in the country, but more because of the service and quality.
You know the joke that if you are warned early about an impending disaster, you should go to your nearest John Lewis because nothing bad ever happens there.
Well, something bad has indeed happened to the high street retail trade and the company has already announced that eight out of 50 department stores will close. We now have some details of what it plans to do with the space under its new chair, Dame Sharon White.
Companies must be willing to change if they want to triumph
It will be used for private and affordable housing. More and more of the company will be pushed online, with John Lewis department stores expected to generate 60 percent that way, and Waitrose up to 20 percent.
This is of course disastrous for the partners who are fired. Nothing can take the pain out of that. Praise to the people who came up with ideas for expansion, including a move to horticulture.
But the main message here is that we can be confident that the group will survive, not something that can be said about some other retailers.
So it’s always better to assume that the changes will be bigger than most people expect and plan for that, because you can always row back later.
A general example of this is now the shift to working online. We have no idea whether it is feasible in the long term for companies to have a majority of their employees work from home.
NatWest plans that 49,000 of the 65,000 people will continue to work from home until next year
Many employees like it or say they like it, but what works for a few months doesn’t necessarily work for years. If employees are used to working together, they can continue to do so. But how do you build morale, train new recruits, give a business drive?
NatWest plans that 49,000 of the 65,000 people will continue to work from home until next year. Barclays also has many home workers, but wants to bring people back to the office.
The CEO, Jes Staley, explained, “We want our people to be back together, to ensure that we ensure the evolution of our culture and our controls, and I think that will happen over time. ‘
That must certainly be correct. Culture and control are two key elements in any business and both can go horribly wrong. The banking sector can give us enough examples of this.
But the chances of something not being picked up are certainly even greater if your people are out of the office and you can’t see what they are doing.
It’s easy to see the winners of these scorching changes in our entire lives. It is also easy to see the losers. I’m afraid it will take years for travel and tourism to recover.
The hardest part to judge is how well companies in the middle – neither obvious winners nor obvious losers – make it. But in general, it is those who make the radical, often painful decisions early, that will get stronger.
And those who wait, like Charles Dickens’ Mr. Micawber, for something to show up, will find that it is not – or at least not in time to save them.
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