Case Study: Leadership Challenges at John Lewis Partnership UK

This case study analyzes the leadership strategies and design leadership adopted by John Lewis Partnership, a UK-based retail giant. It highlights the company's policies for maintaining market consistency, the background of leadership-related problems, and their impact on the retail economy. The study addresses issues faced by customers and employees, including employee slashing to meet loss margins, which reflects on the company's design leadership. It examines the effects of these leadership issues in the context of social media, referencing relevant models and theories. The analysis covers topics such as staff retention, declining sales and profitability, technological issues like website crashes, and insufficient customer service. Ultimately, the case study offers recommendations for alternate pathways to improve leadership and organizational outcomes. The analysis draws upon both quantitative and qualitative data, including financial reports, government surveys, case studies, and news articles, to provide a comprehensive view of the challenges and potential solutions for John Lewis Partnership.

LEADERSHIP
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Table of Contents
1. Introduction..................................................................................................................................3
2. Background..................................................................................................................................3
3. Hypothesis...................................................................................................................................6
4. Data collection.............................................................................................................................7
5. Observation..................................................................................................................................7
6. Discussion....................................................................................................................................8
6.1 Inability in staff retention.......................................................................................................9
6.2 Decline in annual sales and profitability..............................................................................10
6.3 Technological issues relating to website crash....................................................................11
6.4 Insufficient customer service...............................................................................................12
7. Recommendation.......................................................................................................................12
8. Conclusion.................................................................................................................................14
Reference List................................................................................................................................15
Appendices....................................................................................................................................18
Appendix A: Design management.............................................................................................18
Appendix B: Advantages of using social media in business.....................................................19
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1. Introduction
The case study shall be analysing the leadership strategies in relation to the design leadership
adopted by the UK based retail giant John Lewis Partnership. The case study analysis shall also
be laying emphasis on the policies implemented by the company for persisting in the market.
Moreover, the background of the problem related to leadership strategies and the reflection of the
issue on the retail economy shall be presented. The issues faced by the customers and employees
of the retail company have been highlighted in the case study. Moreover, the sudden slash of
employees in order to meet the loss margin also gives rise to design leadership of the company,
as is also a part of the discussion in the study. Further, a detailed description shall also be
presented on the on the effects of the issue of leadership due to the presence of the social media
websites. The models and theories related to the case study of John Lewis Partnership and the
current research scopes and gaps in the scenario shall be portrayed in the case study analysis.
Further, a brief recommendation on alternate pathways shall also be portrayed in it.
2. Background
In order to maintain a consistency in the market, a company has to follow several norms and
policies of leadership. Without a proper leadership structure, a company can never sustain or
might even not create happy employees. As per Bolman and Deal (2017), John Lewis is a UK
based Retail Company and is also one of the pioneers in the retail industry of Britain. Since the
company's leading design management lacked a proper structure, the company started facing a
lot of hardships for existence in the British market. The physical stores of the company started
seeing a massive fall in their sales after since the rise of online marketing and shopping. Similar
to other retailers, the company also started facing troubles in attending more footfalls. As per
Goleman (2017), the profits of the company too collapsed during the starting of the financial
year. The profit margin of the company fell up to 31.2 percent during the starting of the year.
This issue was created due to the sudden change of the Managing Director of the firm and the
focus of the new Managing Director on the online platform. As opined by Ward (2016), the
company had gained its 30 percent of the total profit from online sales but presently it aims at
creating 50 percent sales through the online platform. This, in turn, shall again decrease the profit
margin of the company as it generates huge margin in the physical departmental stores due to the
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fixed price policy. As per Antonakis and Day (2017), the design leadership again remains
improper because the company did not do a proper research prior to the decision.
Though the company aims at fulfilling its 50 percent sales through the online platform, it lacks in
the operation of the web platform. The customers of the company regarding a breach of the
website management and monetary transaction were raising many complaints. As per Renz and
Herman (2016), a customer reported that he found 465.37 GBP missing in his John Lewis
Partnership MasterCard and the bank statement reflected ‘adjusted' and it was done by the
company itself. After several repeated queries, the customer service department of the company
replied that the amount was transferred into a Barclay’s account of the customer, which the
customer did not even possess. As opined by Johnston and Marshall (2016), it was again said by
the company that the amount had been transferred to the account of a different person by
mistake. The company also said that it would take almost four working days for the amount to
reflected back into his account. However, even after the said tenure by the company, the amount
did not reflect back into his account. The company lacked in design leadership in this field, due
to improper communication with the customers. Fairhurst and Connaughton (2014) state that the
company apologized for its mistake and even promised to pay 100 GBP as compensation to all
the customers who faced inconvenience. This event has laid a deep impact on the leading design
of the company. The boost of the online platform that was planned by the company saw a
downpour even before the proper implementation. Tourish (2014) state that the leadership design
that had to implement innovation rather decreased the goodwill of the company. (Refer to
Appendix A)
As per D’Innocenzo et al., (2016), the company had cut the annual bonus of 85,000 staffs, which
amounted to a total of 74m GBP. The company claims that the workers of the company are the
partners of the company and so it is known by the name of the company itself. As per Collinson
(2014), to equal the decrease in the profit line of 77 %, the company planned to cut the annual
bonus of the workers and make the margin equivalent. Moreover, the annual bonus was cut off
for further five more years resulting in dissatisfaction among one-third of the employees. The
company adopted this policy in order to avoid paying stress in the customer’s pocket. As per
Raelin (2016), due to the tough competition in the UK market and the sudden fall of Pound in the
global market, the cost price of several raw materials saw a massive hike. In order to equalize the
difference in the profit margin, the company adopted such measure. Herein, the leadership design
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is affected due to the unplanned cutting of the worker's salary and continuing it for several more
years. As per Gudauskas et al., (2015), the employees are the backbone of a company, so for the
well running and sustaining of a company the first and foremost duty of the company should be
to satiate the employees.
Figure 2.1: Issues of the company
(Source: Created by author)
The company is also losing its crown in the retail sector in the UK due to massive job cuts and
payment below the minimum wage policy. The company has been convicted of slashing 387
employees to prevent itself from the uncertain business condition that is about to arrive
according to the company. As per D'Innocenzo et al., (2016), the company was even accused of
paying less than the minimum wage policy set by the Employment act 2002 and Trade Union
and Labour Relations act 1992. This step also lays a deep impact on the leadership design of the
company. For the smooth running of the company, a set of management policies need to be
5
Company
Issues
Cut in
Bonus
Employee
slashing
Improper
online
managem
ent
Technical
Glitch

maintained and implemented. Hoch et al. (2016) state lack of the design management lays effect
on the design leadership. In the case of the company, they did not implement any innovation or
modern procedure that may suggest proper design leadership. Moreover, the events discussed
lays emphasis on the design leadership of the company, as the company did not implement any
such measures to bring in innovation or modernisation. Further, the sustaining of the leadership
through tenure of the period is also lacking in the reflected case of John Lewis Partnership
Company. The company failed in implementing strategic and corporate intent for the future of
the company.
3. Hypothesis
H1:
H0: Effective design leadership has a positive relationship with management of customer base
through assessment of customer needs.
HA: Effective design leadership does not have a positive relationship with management of
customer through assessment of customer needs.
H2:
H0: Innovative leadership design has a positive relationship with enhanced employee retention
through employee motivation.
HA: Innovative leadership design does not have a positive relationship with enhanced employee
retention through employee motivation.
H3:
H0: Strategic leadership design has a positive relationship with effective technological
development within an organisation.
HA: Strategic leadership design does not have a positive relationship with effective technological
development within an organisation.
H4:
H0: Contemporary leadership design has a positive relationship with strategic management of
business operations.
HA: Contemporary leadership design does not have a positive relationship with strategic
management of business operations.
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4. Data collection
The present study involves the active influence of demographic and financial data. Thus, the
researcher has given a preference over quantitative information. The aforementioned quantitative
data is accumulated from a number of government surveys, newspapers and financial data
repositories. However, qualitative data is not entirely discarded for the present study. Semi-
structured interview details, case studies, articles from newspapers have helped to form an
insight on the scenario relating to design leadership problems. Researcher has preferred the use
of a mixed data method, owing to the wider base of concepts that could be covered by the
obtained observation (Barrientos and Reily, 2016). The help of keywords in search engines
searches the articles over the World Wide Web. Prominent tools for data collection are the public
accessible libraries and online databases. The company website of John Lewis Partnership also
offered knowledge about the current trends in the company and its troubleshooting procedures.
The researcher has avoided the use of primary data in the present study. This is due to the time
and budget bound nature of the research.
5. Observation
It has been analysed from the leadership issue of the company that these issues lay a deep impact
on the sustainability of the company. As per Meuser et al., (2016), the primary issue that has
been highlighted in the case study analysis is the breach of the privacy of the customer and the
monetary fraud due to some technical issue. The company did not respond well to the complaint
of the customer and even did not refund the amount within the promised time span. The
leadership theory of contingency had not been followed here to cope up with the situation and
respect the qualities of the company’s followers. According to Sotiriadou et al., (2014), the
company does not maintain the behavioural theory of learning through observation and
maintaining leadership. Such behaviours shall further tend to de-motivate the customers of the
company in doing business with them and thus shall result in a fall in the leadership design of the
company.
During another case, it cut off the annual bonus of its employees, which was around 74m GBP.
the company did not focus on the management of the employees rather it stressed on not paying
pressure to the customers. As per Santos et al., (2015), the company thus violated the
participative theory, according to which leadership design should implement taking inputs and
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suggestions of others, in this case, the employees whom the company terms as partners of the
company. According to the participative theory, the company did not encourage employee
participation in discussions. As per McDonald and Thompson (2016), the design leadership of
the company thus does not follow the theories of leadership. In the same instance, the design
leadership of the company did not even follow the management theory of leadership. This theory
focuses on the supervision and the group performance of the employees.
The company saw a deep loss of the goodwill of the company due to the technical glitches its
customer faced. The customers of the company had faced a monetary issue while maintaining a
MasterCard of the company. The issue was caused due to the improper maintenance of the
company's website and due to the negligence of the top-level managers. It did not follow the
relationship theory of leadership in this case, as it did not fulfil the needs and requirements of the
persons associated with the company. As per Leftheriotis and Giannakos (2014), this theory also
demands an ethical and moral value in terms of design leadership. The management theory
demands proper supervision of the organisation and thus implements the design leadership, but it
was not so in this case.
The company’s decision in moving to the online platform for the boost in sales also saw a lack in
the design leadership. According to Brooks (2015), the company had started investing a lot of
amount on the backend of the online platform. As per Collinson (2014), the company caters to
around 30 percent of its customers in its online platform; its aim to cater 50 % of its customer
through the online platform is an issue of consideration. El Ouirdi et al. (2015) comment every
item being sold online decreases the profit amount of the item due to the huge back-end
processes involved. The contingency theory of leadership was not followed in order to maintain
an effective and right balance among the needs and requirements of the company and its
associates. Moreover, the company failed in following the situational theory of leadership, and
according to the theory implementing the democratic style while following the design, leadership
would be more effective.
6. Discussion
As seen in the observation from the secondary sources, John Lewis Partnership (JLP) has
represented reliability and quality since a long time. However, recent breaches in its
organisational processes have created an adverse impact on their customer populace. As opined
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by McDonald and Thompson (2016), lack of a strong central leadership can be responsible for
the upsurge in the design leadership issues faced by the retail giant. The revamp of the company
website has resulted in multiple technical breakdowns that left direct debits by the stakeholders
unpaid. The governing body of JLP have announced the increment of relational customer service
taskforce to enhance service quality (Raelin, 2016). The following sections comprehensively
discuss the issues that have been recognised in the present study.
6.1 Inability in staff retention
As mentioned above, design leadership troubles are not essentially confined in a single sector of
an organisation. In case of John Lewis Partnership, the adversities of leadership issues have
spread to a number of departments. Brooks (2015) notes the steady fall in the annual sales of the
company as e-commerce is draining the rush of clients from high street business. Human
resources drive JLP and marketing strategies to attract shoppers through their doors, just like
conventional chains of department stores.
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2.4 4.4 1.8 2.8
Efficiency
Productivity
Moving average (Productivity)
Quality
Figure 6.1.1: Effect of high turnover rates on overall productivity
(Source: Given by Researcher)
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As seen above, the efficiency, quality and productivity undergo rapid fluctuations when turnover
rates are high. The Waitrose branch has also suffered, owing to the disparities in design
leadership. As per the survey of D’Innocenzo et al. (2016), 71% employees in JLP state, that
they are satisfied with the conditions provided in their present jobs. Johnston and Marshall
(2016) note this percentage has relatively reduced from 81% and 87% in the last 2 years. Hence,
it can be stated that the workplace environment of JLP has been slowly declining in the span of
the last few years. In case of most companies, the records can still amount to influence the
stakeholders. However, in case of JLP, the results have proved to mark an era of declination in
employee satisfaction. This has been further confirmed by the report of Leftheriotis and
Giannakos (2014), who state that the turnover rates of employees have faced a record growth in
the last 5 years.
6.2 Decline in annual sales and profitability
Leadership strategies affect the annual sales of a company, owing to the increasing disparities in
organisational processes. This is also displayed in the present case scenario, where the overall
business of JLP has suffered a setback due to the faults in conventional leadership techniques.
Per capita gain in department stores of JLP as well as in its online cartels is facing stagnation in
the present state. As opined by Sotiriadou et al. (2014), the operating profit decreased by 10.8%
in the last working annum. Similarly, Waitrose supermarket branch faces a struggle to hike their
net operating profits up from the meagre 23.4% that the business has achieved last year.
John Lewis Partnership evenly distributes the partnership bonus among its staff (John Lewis
Partnership, 2018). However, it is noted that the aforementioned bonus incentive has been
lowered from 15% to 11% of staff wages this year (Butler, 2018). JLP has further issues a notice
that the profits of the present financial year may be reduced, due to the additional costs of
pension and tough international trading. Meuser et al. (2016) predict that profitability is expected
to reduce in the range of £270 to £320 million, which is even lower than last year’s net
profitability of £342.7 million.
6.3 Technological issues relating to website crash
John Lewis Partnership depends on online transactions for generating a major portion of its
revenue. Gudauskas et al. (2015) predict the influence of technological issues can act as a major
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setback to the online sales. The crash of the official website of JLP has caused a 46% loss in the
transactional records (Skapinker and Felsted, 2015). This has presented the trade and commerce
of JLP with fresh sets of hindrances. This is because the items sold on the e-commerce platforms
substantially generate lesser amount of profits. Fairhurst and Connaughton (2014) state the
efforts included in fulfilling online orders are more than that of offline deliverables. JLP
simultaneously associates large amount of fixed costs that are linked to the maintenance of
infrastructures. Thus, JLP is suffering from the lack of balancing strategy in its business
transactions.
2017 2016 2015 2014
0
1
2
3
4
5
6
7
8
9
After
Before
Figure 6.3.1: Impact of the recent web crash on online transactions of JLP
(Source: Given by Researcher)
The above figure demonstrates the conceptual overview of the effect that affected JLP due to the
crash suffered by its website. This further symbolises the significant lack of strong organisational
design leadership in JLP. As opined by, Hoch et al. (2016) the latest technological advent in the
company has incurred a large amount of losses. Large enterprises are in continuous need of hard
and soft skills to steer the environment of the business. According to the concept of design
leadership, technological aspects should be treated as a complementary to organisational
practices in the present scenario. The field of design management can be used in the case of JLP
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to resolve the prevalent design leadership issues. Rigorous use of a solitary design leadership
approach often adversely hinders the flexibility of a company to change with prevalent trends of
the market and customer needs.
6.4 Insufficient customer service
However, the experience of the customers fails to show any promising development. In case of
organisational leadership, Kogut and Fleck (2017) comment visionary attributes like integrity
and communication are critical in large, multipurpose conglomerates. The executives of JLP are
lacking in the context of strong team building and design leadership abilities. Hence, they are
facing high employee turnover rates that would have been otherwise mitigated by design
leadership strategies. As opined by Santos et al. (2015), clients do not feel that their needs are
being adequately addressed through the organisational procedures and deliverables. Business
representatives of JLP are concerned their personal opinions of customer needs than the actual
trend in client requirements. As opined by Renz and Herman (2016), this is making the customer
more inclined toward the competitor companies of JLP.
The unmet needs and repetitive production of unsatisfactory products fail to retain the loyal
customers. Thus, JLP has to invest a major portion of their budget to attract customers, which
further gives rise to multiple problems in cash flow. There is also a lack of organisational
training noticed in the staffs, which are responsible for handling client feedback (Parwez, 2017).
The employees, owing to their decreased job satisfaction are often impolite in their conduct.
Leaders of JLP must acknowledge the concerns of their clients to recognise appropriate
rectification methods through social media.
7. Recommendation
Large organisations are often hindered by extensive leadership conundrums owing to a number
of perspectives. In this scenario, the perspectives amount to the issues relating to design
leadership and management of John Lewis Partnership. The recommendations suggested by the
researcher aim to contribute to emergent leadership skills in multi-sector conglomerates like JLP.
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