Here is the full transcript of Mancunian entrepreneur James Timpson’s talk titled “Here’s How Trust & Kindness Make A Business Successful” at TEDxManchester conference.
Listen to the audio version here:
TRANSCRIPT:
Early Career and Learning from Other Businesses
When I was 28 years old, I had a conversation with my dad, and it was pretty clear that I had to get ready to run our family retail business. But I wanted to learn some new skills and to see how other people did it, because I knew I wanted to do things differently.
So I spent two years reading books about these amazing businesses I’d heard about, and then I started writing to these business leaders to see if I could just spend a day with them, carrying their bag around, and it’s amazing how many said yes. And then I went to go and see businesses in America, in Europe, in Australia, and I wanted to learn what were the magic ingredients.
Was it all about having amazing shops and amazing locations as a retailer? Was it about being the perfect sort of corporate organization where everything worked brilliantly? Was it about having seamlessly amazing financial processes? And I didn’t see that.
The Magic Ingredients: Trust and Kindness
What I saw is businesses that I admired got two things right. They trusted their people and they were kind to them. So I took all this information and worked it out and sat down with my dad and with lots of colleagues, and we came up with our new culture, which we called upside-down management. And it works on the principles of trust.
We trust our colleagues because we think they’re fantastic. We don’t like rules. In fact, we only have two rules. Simple rules.
Empowering Colleagues and Encouraging Innovation
You put the money in the till, and you look the part. That means you turn up on time in the shops, you don’t have the radio on, you’re polite to people, and it’s sort of quite clean and tidy, and in the evening, you close up on time. That’s all we ask. The rest, you could do whatever you want.
You can charge what you like, as long as you can do discounts, you can do deals. We actually encourage our colleagues to give things away for free. Four percent of all of our transactions are for free. You can order whatever stock you want, you can go on breaks whenever you want.
You can even paint the shop pink if you want, and we do actually have a shop painted pink. Because the more you are trusted, the more you can innovate, and the more you can be yourself. And what we find is the more people are trusted, the happier they are. And the happier they are, the better they serve customers, the more likely they are to stay, and they are better at selling and being part of our culture.
Kindness Beyond Performance
But it isn’t just about trusting people. You’ve got to get the kindness bit right. And what I did is I just went around finding out what are all the ideas that other people did to reward and be kind to their colleagues. So we have a weekly bonus scheme in our shops where our colleagues earn on average about 90 pounds a week.
It’s basically a sales commission bonus. But it’s not really about money. Kindness is about the things that you can amaze your colleagues through. There’s nothing to do with how they perform at work. So we came up with, the first one we did was you get your birthday off as an extra day off. And over the years, we got a bit carried away. You get an extra week off when you get married. You get an extra day off when your kids have their first day at school.
We even do pet bereavement days. Because that is what a business needs to do. It needs to understand how you appeal to your colleagues. So it’s not just about giving days off.
Making Dreams Come True
It’s about dreams come true. We spend a million pounds a year making our colleagues’ dreams come true. In fact, the last couple of weeks, we’ve paid for new teeth. We seem to do a lot of new teeth. We paid for new teeth for a colleague who had just become a grandfather. And he felt he couldn’t smile in front of his new grandchild because he was ashamed of his teeth.
We’ve also paid for someone’s garden to get done up. And we paid for someone to go to Disneyland. It’s a dream they’ve always had. And again, this is what I believe companies should do. It’s how you instill kindness. And it’s not just about giving dreams come true.
It’s not just about giving days off. It’s about leaders knowing and understanding their colleagues. That’s why our area managers, which in our business are sort of the key role, they need to know their people. We actually test them every year to make sure that they do know their people.
And if they get less than 80%, we have a problem with that. So we trust people. We’re kind to them. But how do we know that it works?
Measuring Happiness and Its Impact
I can show you our figures because every year we have the happy index, which is our annual survey. And it’s probably different from most of the surveys that you’ve been on, that you’ve had in your organizations. We only have one question. On a scale of one to ten, how happy are you with your boss, your area manager, your team leader?
And for that area manager or team leader, this survey is like A-level results day. It is a big deal. It is the one thing that they are judged on all year. We don’t judge them on their financial performance. We don’t judge them on how tidy their shops are. We don’t judge them on their colleague turnover.
But we do judge them on how their colleagues rate them.
We actually have some of our area managers get 100%, so all of their colleagues give them 10 out of 10. That is unusual, but we expect our leaders to have colleagues who are happy with them as their boss. Whenever we measure it, the happier the colleague, the more money we make. So instead of trying to make money, try and make your colleagues happy. But we also need more than just one index.
The Director of Happiness
So we have our own director of happiness, Janet. And it’s her job actually to spend a lot of time with colleagues who are unhappy. But her primary job is to make sure that all the benefits and the culture work that we do has a positive impact on our colleagues.
So you can have this culture where we trust everybody, we try not to get things in the way, we’re kind to people, we measure it, but it only works if you employ the right kind of people. Not everybody likes our culture. Not everybody wants to be trusted. So we’ve worked out that the kind of people we want have the right personality for us. So when we recruit people, we don’t bother with a CV.
All we want is your name and phone number. We’ll interview anybody because we’re looking for something that you can’t see on a CV. We want people who are fun, interesting, sparky, a bit eccentric. They’ve got an energy about them and they look you in the eye.
Recruiting the Right People
We know that those kind of people work well in our business, our amazing colleagues like working with them, and customers like being served by them. So our interviews is just a chat. And what we’re really looking for is people who are a 9 or a 10 out of 10. They’re amazing. Everybody wants a 9 or a 10 out of 10. And 8s have an opportunity to improve. But we all can spot a 1, 2, 3, 4, or 5 out of 10. I’m sure they’ll be brilliant at certain jobs, but it’s probably not with us.
The danger zone, though, when you’re recruiting is when you recruit a 6 or a 7. Because they can do the job, but their best isn’t good enough for us. So whenever we’re recruiting, we’re always looking for those 9s and 10s. And we’re actually always recruiting when we don’t need anybody, when we don’t have any vacancies.
Because the best way to recruit is when you have a waiting list of amazing people. So when you do have a vacancy, you only get the best. And one of the things that I learned 20 years ago is that you can find people who are amazing in unusual places. 20 years ago, I was invited into a local prison in Warrington, not far from where we are here today, just to have a wander around and meet some of the people who live there.
Recruiting from Prisons
And I was always intrigued by what went on in prisons, because my mom was a foster carer. And I was brought up with lots of young children. A lot of the time, they were with us because their moms and dads were in prison. And I always felt it was wrong.
So I wanted to see what this prison was really like. My tour guide was a young guy called Matthew. And as we walked around the prison, we were chatting about what his plans were when he was being released, what his life was like before. And I worked out that his personality was exactly what we wanted. He was a 10 out of 10.
So without telling anybody, I slipped in my business card and said, “When you’re out, give me a ring, and I’ll give you a job.” I forgot about it. And then, about six months later, I got a call, not from Matthew, but from his mother, to say, “He’s out tomorrow. He can’t get a job. We’re desperate. Will you take him on?” 20 years later, Matthew’s still with us, as are 600 other colleagues we’ve recruited from prison.
And the reason why we’ve recruited them from prison, the reason why we’ve recruited them from prison is not because we felt sorry for them. It’s not because we’re all about second chances, even though that’s important to us. We’ve recruited them because they’re really good, they’re reliable, they’re honest, they work really hard, and they’re ambitious. And over the last 20 years, we’ve been to virtually every prison in the UK recruiting.
Training Academies in Prisons
We’ve opened up training academies in prison so we can train people on the skills we need, so when they leave prison, they’ve already got the confidence. And it’s got to the point now where I think more customers come to our shops because they know of what we do, rather than a few who avoid us because they know what we do.
But we’ve learned that by going into our prisons, we can find some very, very talented, ambitious people, and it’s been one of the best things that we’ve ever done. So you can recruit the right people, you can trust them and be kind to them, but the problem with a culture like ours is it takes a long time to get there.
Any culture change takes three years, but realistically it’s five years. So if you’re hearing and thinking that what we do is something you’d like to do, be prepared for it to take a long time, and for not everybody who works alongside you to get it, because it’s hard. It’s hard because it’s simple, and one of the things that myself and our leadership team are doing all the time is avoiding complexity in our culture. So that is why we’ve got a number of strange mechanisms within our business.
Avoiding Complexity and Saying No to New Ideas
The most important thing is we say no to 95% of new ideas because even though they may be a good idea that helps increase the turnover by 1% or 2%, the increase in complexity is one that dilutes our culture. We even have a cut-the-crap committee that we set up seven years ago, and I thought it would last for about six months because we find all these pointless processes we have and all these reports that are produced that no one reads.
But even though we found all those, we keep finding more and more, and it isn’t just about saying no to things and cut-the-crap committees. It’s about understanding how organizations like to complicate themselves, and ours is no different. There’s a guy called Northcote C. Parkinson in 1955. He wrote a book called “Parkinson’s Law,” and my dad gave it to me about 15 years ago, and I wish I’d read it when I was 28 going out on my learn about how to run a business tour, because it’s very simple.
There’s something in us as human beings, there’s something in us as leaders that we want to recruit more people and we want to add in complexity. Parkinson used the example of the British Navy that had more admirals than ships, because after World War I, we reduced the number of ships, but we never reduced the number of admirals, and that’s what happens in businesses.
Keeping Things Simple and Showing Appreciation
So I’m always terrified of taking on more people and doing new things, but I’m not terrified of running a business in a very simple way. We write lots of letters to say thank you. We visit our shops to say thank you to our colleagues who serve our customers, and we reward our colleagues with financial rewards, but also all the other benefits that we can have, and probably the best one we’ve done over the last 20 years is our holiday homes. So we have 19 holiday homes where our colleagues can go on a free holiday.
And being a leader, there’s nothing better than going in, in my case, into one of our shops, meeting one of our colleagues. They’ve had a dream come true, they’ve been to one of our holiday homes, and they feel valued, and they feel that they can be themselves, because too many organisations encourage people to not be themselves. So the next time you go into one of our shops, please speak to one of our colleagues. I hope they’re a 10 out of 10, and I hope they’re happy.
Thank you very much.
Early Career and Learning from Other Businesses
When I was 28 years old, I had a conversation with my dad, and it was pretty clear that I had to get ready to run our family retail business. But I wanted to learn some new skills and to see how other people did it, because I knew I wanted to do things differently. So I spent two years reading books about these amazing businesses I’d heard about, and then I started writing to these business leaders to see if I could just spend a day with them, carrying their bag around, and it’s amazing how many said yes. And then I went to go and see businesses in America, in Europe, in Australia, and I wanted to learn what were the magic ingredients.
Was it all about having amazing shops and amazing locations as a retailer? Was it about being the perfect sort of corporate organization where everything worked brilliantly? Was it about having seamlessly amazing financial processes? And I didn’t see that.
The Magic Ingredients: Trust and Kindness
What I saw is businesses that I admired got two things right. They trusted their people and they were kind to them. So I took all this information and worked it out and sat down with my dad and with lots of colleagues, and we came up with our new culture, which we called upside-down management. And it works on the principles of trust.
We trust our colleagues because we think they’re fantastic. We don’t like rules. In fact, we only have two rules. Simple rules.
Empowering Colleagues and Encouraging Innovation
You put the money in the till, and you look the part. That means you turn up on time in the shops, you don’t have the radio on, you’re polite to people, and it’s sort of quite clean and tidy, and in the evening, you close up on time. That’s all we ask. The rest, you could do whatever you want.
You can charge what you like, as long as you can do discounts, you can do deals. We actually encourage our colleagues to give things away for free. Four percent of all of our transactions are for free. You can order whatever stock you want, you can go on breaks whenever you want.
You can even paint the shop pink if you want, and we do actually have a shop painted pink. Because the more you are trusted, the more you can innovate, and the more you can be yourself. And what we find is the more people are trusted, the happier they are. And the happier they are, the better they serve customers, the more likely they are to stay, and they are better at selling and being part of our culture.
Kindness Beyond Performance
But it isn’t just about trusting people. You’ve got to get the kindness bit right. And what I did is I just went around finding out what are all the ideas that other people did to reward and be kind to their colleagues. So we have a weekly bonus scheme in our shops where our colleagues earn on average about 90 pounds a week.
It’s basically a sales commission bonus. But it’s not really about money. Kindness is about the things that you can amaze your colleagues through. There’s nothing to do with how they perform at work.
So we came up with, the first one we did was you get your birthday off as an extra day off. And over the years, we got a bit carried away. You get an extra week off when you get married. You get an extra day off when your kids have their first day at school.
We even do pet bereavement days. Because that is what a business needs to do. It needs to understand how you appeal to your colleagues. So it’s not just about giving days off.
Making Dreams Come True
It’s about dreams come true. We spend a million pounds a year making our colleagues’ dreams come true. In fact, the last couple of weeks, we’ve paid for new teeth. We seem to do a lot of new teeth.
We paid for new teeth for a colleague who had just become a grandfather. And he felt he couldn’t smile in front of his new grandchild because he was ashamed of his teeth. We’ve also paid for someone’s garden to get done up. And we paid for someone to go to Disneyland.
It’s a dream they’ve always had. And again, this is what I believe companies should do. It’s how you instill kindness. And it’s not just about giving dreams come true.
It’s not just about giving days off. It’s about leaders knowing and understanding their colleagues. That’s why our area managers, which in our business are sort of the key role, they need to know their people. We actually test them every year to make sure that they do know their people.
And if they get less than 80%, we have a problem with that. So we trust people. We’re kind to them. But how do we know that it works?
Measuring Happiness and Its Impact
I can show you our figures because every year we have the happy index, which is our annual survey. And it’s probably different from most of the surveys that you’ve been on, that you’ve had in your organizations. We only have one question. On a scale of one to ten, how happy are you with your boss, your area manager, your team leader?
And for that area manager or team leader, this survey is like A-level results day. It is a big deal. It is the one thing that they are judged on all year. We don’t judge them on their financial performance.
We don’t judge them on how tidy their shops are. We don’t judge them on their colleague turnover. But we do judge them on how their colleagues rate them. We actually have some of our area managers get 100%, so all of their colleagues give them 10 out of 10.
That is unusual, but we expect our leaders to have colleagues who are happy with them as their boss. Whenever we measure it, the happier the colleague, the more money we make. So instead of trying to make money, try and make your colleagues happy. But we also need more than just one index.
The Director of Happiness
So we have our own director of happiness, Janet. And it’s her job actually to spend a lot of time with colleagues who are unhappy. But her primary job is to make sure that all the benefits and the culture work that we do has a positive impact on our colleagues. So you can have this culture where we trust everybody, we try not to get things in the way, we’re kind to people, we measure it, but it only works if you employ the right kind of people.
Not everybody likes our culture. Not everybody wants to be trusted. So we’ve worked out that the kind of people we want have the right personality for us. So when we recruit people, we don’t bother with a CV.
All we want is your name and phone number. We’ll interview anybody because we’re looking for something that you can’t see on a CV. We want people who are fun, interesting, sparky, a bit eccentric. They’ve got an energy about them and they look you in the eye.
Recruiting the Right People
We know that those kind of people work well in our business, our amazing colleagues like working with them, and customers like being served by them. So our interviews is just a chat. And what we’re really looking for is people who are a 9 or a 10 out of 10. They’re amazing.
Everybody wants a 9 or a 10 out of 10. And 8s have an opportunity to improve. But we all can spot a 1, 2, 3, 4, or 5 out of 10. I’m sure they’ll be brilliant at certain jobs, but it’s probably not with us.
The danger zone, though, when you’re recruiting is when you recruit a 6 or a 7. Because they can do the job, but their best isn’t good enough for us. So whenever we’re recruiting, we’re always looking for those 9s and 10s. And we’re actually always recruiting when we don’t need anybody, when we don’t have any vacancies.
Because the best way to recruit is when you have a waiting list of amazing people. So when you do have a vacancy, you only get the best. And one of the things that I learned 20 years ago is that you can find people who are amazing in unusual places. 20 years ago, I was invited into a local prison in Warrington, not far from where we are here today, just to have a wander around and meet some of the people who live there.
Recruiting from Prisons
And I was always intrigued by what went on in prisons, because my mom was a foster carer. And I was brought up with lots of young children. A lot of the time, they were with us because their moms and dads were in prison. And I always felt it was wrong.
So I wanted to see what this prison was really like. My tour guide was a young guy called Matthew. And as we walked around the prison, we were chatting about what his plans were when he was being released, what his life was like before. And I worked out that his personality was exactly what we wanted.
He was a 10 out of 10. So without telling anybody, I slipped in my business card and said, “When you’re out, give me a ring, and I’ll give you a job.” I forgot about it. And then, about six months later, I got a call, not from Matthew, but from his mother, to say, “He’s out tomorrow.”
He can’t get a job. We’re desperate. Will you take him on? 20 years later, Matthew’s still with us, as are 600 other colleagues we’ve recruited from prison.
And the reason why we’ve recruited them from prison, the reason why we’ve recruited them from prison is not because we felt sorry for them. It’s not because we’re all about second chances, even though that’s important to us. We’ve recruited them because they’re really good, they’re reliable, they’re honest, they work really hard, and they’re ambitious. And over the last 20 years, we’ve been to virtually every prison in the UK recruiting.
Training Academies in Prisons
We’ve opened up training academies in prison so we can train people on the skills we need, so when they leave prison, they’ve already got the confidence. And it’s got to the point now where I think more customers come to our shops because they know of what we do, rather than a few who avoid us because they know what we do. But we’ve learned that by going into our prisons, we can find some very, very talented, ambitious people, and it’s been one of the best things that we’ve ever done. So you can recruit the right people, you can trust them and be kind to them, but the problem with a culture like ours is it takes a long time to get there.
Any culture change takes three years, but realistically it’s five years. So if you’re hearing and thinking that what we do is something you’d like to do, be prepared for it to take a long time, and for not everybody who works alongside you to get it, because it’s hard. It’s hard because it’s simple, and one of the things that myself and our leadership team are doing all the time is avoiding complexity in our culture. So that is why we’ve got a number of strange mechanisms within our business.
Avoiding Complexity and Saying No to New Ideas
The most important thing is we say no to 95% of new ideas because even though they may be a good idea that helps increase the turnover by 1% or 2%, the increase in complexity is one that dilutes our culture. We even have a cut-the-crap committee that we set up seven years ago, and I thought it would last for about six months because we find all these pointless processes we have and all these reports that are produced that no one reads, but even though we found all those, we keep finding more and more, and it isn’t just about saying no to things and cut-the-crap committees. It’s about understanding how organizations like to complicate themselves, and ours is no different. There’s a guy called Northcote C.
Parkinson in 1955. He wrote a book called “Parkinson’s Law,” and my dad gave it to me about 15 years ago, and I wish I’d read it when I was 28 going out on my learn about how to run a business tour, because it’s very simple. There’s something in us as human beings, there’s something in us as leaders that we want to recruit more people and we want to add in complexity. Parkinson used the example of the British Navy that had more admirals than ships, because after World War I, we reduced the number of ships, but we never reduced the number of admirals, and that’s what happens in businesses.
Keeping Things Simple and Showing Appreciation
So I’m always terrified of taking on more people and doing new things, but I’m not terrified of running a business in a very simple way. We write lots of letters to say thank you. We visit our shops to say thank you to our colleagues who serve our customers, and we reward our colleagues with financial rewards, but also all the other benefits that we can have, and probably the best one we’ve done over the last 20 years is our holiday homes. So we have 19 holiday homes where our colleagues can go on a free holiday.
And being a leader, there’s nothing better than going in, in my case, into one of our shops, meeting one of our colleagues. They’ve had a dream come true, they’ve been to one of our holiday homes, and they feel valued, and they feel that they can be themselves, because too many organisations encourage people to not be themselves. So the next time you go into one of our shops, please speak to one of our colleagues. I hope they’re a 10 out of 10, and I hope they’re happy.