TIMPSONS – 18th May 2018 – REPORT BACK

We walk past Timpsons every day, and never give them a passing thought. Yet they have 1,900 shops, 4,700 employees (“colleagues”), a £260m turnover growing in all sectors of the business and a healthy £20 million profit, at a time when Marks & Spencers are in deep trouble. Chairman Sir John Timpson is the honoured head of a firm founded by his great-great-grandfather in 1865; it’s still a family-owned operation so you can’t buy shares in them. Pity.

We struck lucky with Peter Harris, Head of Training for the Timpson Group at our well-attended May meeting. An entertaining and informative speaker, he joined the firm in the early 1990s when the bosses were still called “Mr William” or “Mr John.”  He outlined the firm history, from the first shoe shop in Oldham Road Manchester; within 11 years William Timpson had built a stately pile in his home town of Kettering (now one of their holiday homes for staff). Then came a shoe factory, and shoe repairs was an obvious extension. The peak time for the business was in the 1960s when men wore British-made leather shoes and women wore stilettos, and got them mended.

But as imports and synthetic materials took over, the business was fading. In 1971 almost by accident they started key-cutting; it’s low capital, high margins and still thriving. Well, you wouldn’t send you keys through the post to be replicated, would you? Engraving followed, then watch and now phone repairs, photo shops, dry cleaning. These days it’s multi- services, necessary but with little national competition – and Sir John has a habit of taking over the opposition when those businesses fail.

The big culture change came in the mid 1990s. Sir John had sold the shoe shops – that, he said on video, had broken his heart but it was necessary. So what kind of business was it now? He decided Timpson’s had to be known for “doing a great job; the craftsmanship has to be fantastic; the customers have to leave happier that they do other shops; the colleagues in the shops have to create a great atmosphere.” From this came his unique concept of Upside Down Management.

The customers decide what they want. The branch staff have “total authority to provide amazing service” (and the notice up in the shop saying so is for both customers and staff). There are no targets, no Key Performance Indicators, no set break times, no rules for shop employees except two: (1) Look the Part, and (2) Put the Money in the Till.

Area Teams, Senior Management, and Sir John himself (and now his son James) see themselves as the bottom of the heap. Once a year the shops staff evaluate their Area Team – not the other way round. Managers are not to be found at their Wythenshawe HQ but whizzing round the country, checking out the stores and listening to the next good idea.

“But,” Peter said, “staff didn’t get it: they still wanted to be told what to do!” It was about five years before the message got across that Sir John meant what he said. One result was his famous “Mr Men” series of small picture books, full of wisdom such as “Administrators seldom increase sales but always add to the costs”, “Most meetings waste a lot of time and money”, “Beware of market research – find things out by walking the business, talking to colleagues and meeting customers face to face.” And they do.  I wish they were running the NHS.

In return, employees get looked after with old-fashioned paternalism. They can earn good money including bonuses for bright ideas. They get their birthdays off; they can access holiday homes provided by the firm (mostly in the UK, to avoid air fares). A Hardship Fund helps ensure the money does go into the till – support and advice are available instead of stealing. Promotions are from within, so the sky’s the limit.

I asked if they were finding it harder to get staff now that Britain is facing full employment and possibly lower immigration after Brexit. “Not at all,” said Peter; “we have a waiting list.” Introductions are encouraged, with a bounty of £200; when the existing employee likes the culture, their friends probably will too.

And there’s the amazing work with ex-offenders, with over 400 now working for Timpson’s and 50 more each year. 50% of ex-cons offend within 2 years; at Timpson’s its 3%. The secret is getting the right people, training them in uniform inside prison, then employing them from Day One of release. The government had just announced it’s keen to see more Release On Temporary License (ROTL) – day release to do a job – “as the hurly burly of a busy shop can’t be replicated inside,” Peter explained. The only thing they don’t learn, till they’ve proved themselves, is key-cutting.

We heard about the fostering, and the Alex Simpson Trust to support foster families, in memory of Sir John’s wife who died in 2016. Their first foster child ended up in prison – but is now working for the firm. For those who think big business is per se unethical, here’s the antidote. We were left full of admiration for a remarkable family and an exceptional business.