This is well worth the fairly long read. It is a story of operationalising ‘care and growth’ such that it is embedded in the culture. A few takeaways:

• It is about trusting your people. Timpson employees can do whatever they like as long as they adhere to two rules: put the money in the till, and look the part.
• There is one single measure of area managers’ performance – it is not profitability but their rating on a single survey question: ‘How do you rate your area manager for their kindness to you?’
• Act decisively on poor performance without any of the normal HR processes.
• Spend time in the field where the game is being played to find out what the front-line employees need to provide excellent service to customers.

OUR SUMMARY OF THIS VIDEO:

Q: What is upside down management?

James Timpson: ‘Most businesses are run from the top down so the people who actually serve customers, drive trucks and put money in the till are told what to do and have to follow lots of rules and processes. If they don’t, they get told off.

‘But in our business those on the front line can do whatever they want, whatever they think is right, subject to two rules:

1. You put the money in the till.
2. You look the part.

‘For the rest, you can do whatever you think is right. All we are interested in is: are you happy, are you doing everything you can to give amazing service, and are you following our two rules.

‘Everyone else’s job is not to tell them what to do but to support them. For instance, if they want to give someone a discount or give something away for free, or they want to change the displays, go ahead. They can order whatever stock they want. They decide when to have a break. They can even paint the shop pink if they want. It’s their shop – they do whatever they think is right to give amazing service to their customers.

‘All we are interested in is: are you happy, are you doing everything you can to give amazing service, and are you following our two rules?

‘The idea is that a happy workforce means a successful business. And every time we measure happiness, where in our businesses our colleagues are happiest, we make the most amount of money.

‘So instead of trying to make lots of financial decisions around how you make profit, we just focus on our colleagues being really happy. That’s how to make money. ‘It’s much easier, it’s much more fun, and it requires has much less cost of overheads.’

Q: What is the happy index?

‘It is our annual colleague survey. In our business everyone’s a colleague. We don’t do staff or teams or anything like that.

‘I measure the cash flow every day. We have monthly profits and the normal things that everyone else looks at, but the one barometer that is important is the happy index score.

‘So if you’re an area manager you probably have 100-120 colleagues reporting to you and 40 shops. On 1 April all your colleagues will receive a survey with one question on a scale of 1 to 10: “How do you rate your area manager for their kindness to you?” And if you want to write a comment you can.

‘We get them all back and we measure the scores. If an area manager gets a really good score, which most do, then fantastic! If they get a bad score, we have a problem because their job is not to make us lots of money; and to make sure their colleagues are happy. If they are happy with all the acts of kindness and support given them, the team performs really well – it is a happy, engaged team which gives really good service.

‘So measure that. Don’t bother about all the other financial factors because it doesn’t make that much difference.’

‘This management philosophy originates from my father as well as my observations and ideas from other businesses.

‘We’ve always been a paternalistic family business. There has always been a culture of supporting everybody. Everybody who works in the business is part of the family and we treat everybody as part of the family.

‘There is a story – I don’t know whether it’s true – that the founder, in 1865, left his village in Northampton to go to Manchester to work with his uncle and sell shoelaces on his bicycle. But he got on the wrong train because he had never been on a train before, and he ended up in Sheffield. He slept the night on the station floor. He didn’t know what to do, he didn’t have any money, and a man came up to him and gave him some money to get to Manchester.

‘So ever since then there’s been this philosophy that you help people who need support. It carried on as very much a family business looking after people, recognising long service, etc.

‘Then the business lost its way in the 1970s after it was sold by my grandfather. But my dad bought it back. Then when I started working in the business when I was 15-16 years old, because I was a boss’s son I could do whatever I wanted. And I remember working at the Canon Street shop. I doubled the turnover; then I went to the shop in Cheapside and I tripled the turnover.

‘And I wasn’t the world’s best shoe repairer, I’m still not world’s best shoe repairer, but I was honest – and I think in Cheapside they certainly weren’t putting all the money in the till. And because I could do discounts and deals and phone up the warehouse and they would send me what I wanted, I could just take more money. Also, because I could give things away for free, more customers kept coming back.

‘So I thought, “Well, if I can do this and I didn’t have to abide by all the rules, why can’t other people?” Then I started to look outside at other businesses. I went to the US where there’s a business called Richer Sounds which does hi-fi etc. Its founder, Julian Richer, wrote the book The Richer Way. Every page I turned I said, “That’s how you do it!” And there are a number of other businesses there that do it too, including Southwest Airlines.

‘That gave me the confidence to translate this to freedom and to give people the trust to run their businesses.’

Q: How you incentivise them through kindness?

‘I remember a number of conversations with my dad – saying, “How do we do this, how do we communicate it?” We just sort of went from there but it took three years until people started to believe us and it was five years from when we started that it actually really started to happen.

‘But you make a profit – it’s not that you don’t believe in making money. We are very profitable, we are not a social enterprise.

‘But this is a strange form of capitalism, which is: the more you give your people the more benefits you give, the more days off the more dreams come true, the more Holiday Homes we buy for our colleagues, the more money we make.

‘So even when Covid happened, which was a disaster for us, we paid everyone 100% all the way through. We didn’t sell any holiday homes, we kept doing all of our benefits.

‘Our people recognise that and I think the customers who come into our shops in turn recognise that.

‘We have 19 holiday homes. Basically if you work for a year you can apply to the holiday homes team with the dates you want to go and if you have kids you have preference for school holidays. It’s all free – you pay to get there, and your food and drink. Many are in UK coastal areas, and there one in Turkey and one in Northern Ireland. Colleagues love it.’

Q: If you ask people to measure their own happiness, aren’t some people just miserable?

‘Yes, for their own reasons – nothing to do with you or work. So we also measure happiness every week. We have a survey that goes out on a Thursday night, asking, on a scale of 1 to 10, how happy you are. Actually we were down last week at an average of 8.2 – our overall average is about 8.5.

‘So what we’re interested in is if you score yourself every week 10, 10, 10, 10, 10, but then you give yourself a 4. Then it’s your area manager’s/your line manager’s job to phone you and say “I’ve noticed your score is low. Let me come and have a chat with you to check everything’s okay.”

‘But on the other hand if you score yourself 4 all the time, which some people do, and then you give yourself a 10, we’re worried about that as well because we like to know where people are.’

Q: So you’ve broken this down into eight lessons …?

‘The first one is assemble a high-performing super team of people who get your culture – because not everybody likes our culture, not everybody likes to be trusted and have the freedom. Quite a lot of people like boundaries and we don’t really have boundaries. Also, in our business a lot of our colleagues work in a shop on their own and they have to do everything – repair shoes, cut keys, develop photos. So we recruit just on personality. For us CVs are a waste of time – we are not interested in the qualification. Name and phone number is all we need and we’ll interview anybody because we can train anyone to repair watches within four or five days. But I can’t train you to have a different personality.

‘It is the same for management and head office people. So predominantly we recruit them from within, and succession planning is a really important part of our job.

‘For our shops we’re looking for people who are fun, interesting and engaging – a bit eccentric is fine. It is the same for our finance colleagues and our online colleagues – because our culture is very specific. It fits those kinds of people.

‘So if you’re shy and quiet, Timpson isn’t for you – you may be the world’s best shoe repairer and you may really like our values but you won’t thrive because it’s not that kind of culture. We score people on their personality rather than their ability because when the customer goes into one of our shops they won’t remember whether the carpet was clean or whether all the light bulbs were on, or even how much the product cost. But they will remember how good the person was who served them.

‘Our type of people take the most amount of money. The stronger our culture is, the more successful the business is.

‘One of our problems has been that as we’ve grown, that culture has been challenged a lot, especially when we’ve done acquisitions. We normally buy businesses from the administrators because it’s cheap and we just find it easier fixing them. But culturally it’s a real problem and it takes 3-5 years to really integrate a business into our culture because it takes a long a long time to make sure you have the right people. For instance, they don’t believe about the holiday homes until they experience them.

‘When you inherit employees, many are the wrong kind of person. And we prefer full-time colleagues to part-time colleagues so we try and encourage everyone to join us full-time. And we like our colleagues to be able to move around a lot – about 80% of our shop colleagues are moving around quite a lot. So we test people in different shops and sometimes they thrive and sometimes they don’t.

‘But one of the things that I’m very enthusiastic about is that when someone is not going to be happy with us, we help them be happy somewhere else. Many companies don’t like those difficult conversations. But I don’t think it’s fair to someone who is who’s fantastic to have to work alongside someone who isn’t fantastic. We help them get jobs elsewhere and we really support them and encourage them. We do it with kindness.

‘Regarding dealing with dishonesty and misconduct … with us, dishonesty is basically colleagues stealing from the till. Customers can’t really go into our shops and steal something because there’s nothing to steal.

‘It’s about just being really quick on it – if someone goes against our culture we act fast. Other businesses that we take on or hear about get stuck in long-winded HR process.

‘We just want to have that honest conversation with people. Noone wants to go home and tell their loved ones that they’ve been caught stealing so we help them do it graciously. We say “I think it’s probably best if we part company rather than having this investigation.” A quiet exit.

‘For me the exciting part of the business is going around shops. I love going around shops 2-3 days a week, meeting the colleagues, serving customers, finding out what’s going on. Finding the problems, looking for opportunities.

‘It’s tempting to stay in head office, but I think a leader’s job is to operate at the strategy level and on the shop floor. Don’t get involved in the middle bit – it’s really easy to get sucked into the middle bit of day-to-day fixes, operational plans and so on.

‘The best ideas come from the colleagues who are serving customers every day. For example, watch repairs. We never used to do watch repairs but I remember going to West Bromwich 15 years ago. We had a new colleague who had joined us called Glenn working there. He had this little handwritten sign in the window saying “watch straps and batteries …” I remarked that I didn’t know he did watch repairs. He thought he was going to get told off, but I asked him how much he had taken for watch repairs this week and he said £250. I said that was is amazing.

‘Glenn has just retired but at the end he was running a team of 70 in a workshop in Wolverhampton doing our central watch repairs.

‘And we do lots of car keys. It’s quite technical so we have a summit every quarter where we get six of our colleagues in the branches who love car keys. They get really excited about car keys when they wake up in the morning. We get them together and say, “Right, what are all the things we need to do to help you take more money on car keys rather than us going to suppliers or competitors?”

‘On remuneration and conditions and benefits – we always pay above the national minimum wage . But really our differentiation is our weekly bonus.

‘All of our colleagues in the shops and the businesses earn a bonus of some sort every year but the big one is the weekly bonus. So if two people work in a shop during the week we have a simple formula: add up our wages together and multiply it by 4.5 and that sets the sales target each week. Anything over that, you get 15%. So the average colleague is earning about £100 a week in commission.

‘There are two incentives. One is every week. A lot of businesses are based on quarterly and annual targets, but our colleagues think by the week.

‘The other is to have the wages as low as possible so the bonus target is lower.

‘That’s the drug – every business needs a drug.

‘When it comes to benefits, I want to do every benefit you can possibly have. Because even though benefits cost money, the benefit far outweighs that cost.

‘Timpson has also been a big champion of employing ex-offenders. One in nine of my colleagues is someone with prison experience.

‘It started when I just wanted to give someone who I met on a prison visit a second chance. Then I got a bit carried away and wanted to help more and more people. Now, with one in nine of my colleagues is an ex-offender, I don’t know who’s from prison and who’s not. Noone cares in our business – we just want to recruit people who are talented and have the right personality. We don’t recruit sex offenders and people who’ve got drug and alcohol issues that mean that they can’t hold down a full-time job. And we don’t recruit people who haven’t come to the end of their criminal life.

‘So if you were looking at 100 people leaving prison today, I’d interview 20-30 of them, and take on 3-4. So we’re still very selective.

‘We have a high proportion of women from prison – it’s been one of the best things we’ve done not just because it’s giving people a second chance but also because they’re brilliant and talented and they’re loyal and they work hard.

‘Some customers come into our shops thinking everybody in the business has been to prison including myself, but I haven’t, although I go to prison once every couple of weeks recruiting or doing other prison stuff.

‘We don’t recruit men under the age of 25 from prison because they’re just not mature enough and from our experience they won’t stay and often they’ll get back into their old ways. But female offenders from 19 are absolutely fine.

‘But if I if I recruit someone from prison they’re more honest, stay with me longer, and are more loyal and are more likely to get promoted.

‘When you walk around a prison you meet people who’ve got to that point in life where they just want a job and they don’t want to disappoint their family again.

‘Our culture works when people are promoted up through the business. Whenever we recruit someone to a senior role from somewhere else, where they might have been incredibly successful, it just takes too long to get our culture. So we prefer to recruit from within. And we have loads of succession meetings – for virtually every role we want someone lined up, and we’re training them for it … and maybe even another one as well. That’s my sleep-well-at-night management.

‘Regarding leading, I think it’s about consistency and about trying to communicate well. As a leader there are lots of things I’m not very good at but I just try and focus on the things that I believe are important and on keeping the culture alive. So most of my time is going around the business talking to people and communicating.

‘I have a colleague called Janet who’s director of happiness and she spends a lot of her time with colleagues who are unhappy. A number of our colleagues get into problems with money so we like to lend them money and it’s Janet’s job to go and sit in their front room and go through all the bills to work out a plan. We pay off the loan sharks a lot – we have our own lending scheme. Virtually everyone pays it back.

‘Other business leaders say, “Well it’s all right, you just do shoe repairs. But we’re in grown-up businesses.”

‘They think I’m really uncommercial because we have all these benefits. But actually I’m the most commercial business person you’re going to meet. I’m pretty tough but I know that this is the right way to inspire people

‘They also think we’re a family business so we can be old-fashioned with jobs for the boys etc. But I’m always on the lookout for the best people.’

Q: Are these ideas translatable to every workplace?

‘Yes, I can give you a number of examples of successful businesses where they run along similar lines – admittedly a lot of family businesses where it’s easier to justify. I know it’d be very difficult to if I was running a listed company – if profits were down, we would be asked why we bought another three holiday homes. But actually when times are difficult you want to spend; that’s when you want to buy the three holiday homes.

‘Imagine if the civil service had a director of happiness in every department. Ironically I think the civil service is not good at HR though they’ve got so many HR people – many of whom are really good at HR, I’m sure.

‘But the culture is very process-driven and regimented. Someone turns up late for work and they go down the HR process of letters, letters, letters and eventually disciplinary action.

‘We’ll just sit down and say, “Brian, why are you late, what’s happening, what can we do to help?” If Brian is a bit useless and he’s not going to work out then we say, “Why don’t you find your happiness elsewhere?”

‘And this may sound really uncommercial but the more jobs we do for free in our shops the more profit we make, and the more money we give to support our colleagues and their charities, the more money we give to good causes, the better we seem to do.

‘I believe that business is there to make profit but it’s also there to do good things, and one of the things that we measure is the amount of philanthropy that we can do as a business to help the societies that we trade in.

‘We also ask our colleagues every day to do a random act of kindness – for two reasons: it is good for your health to do such acts, and it is often great customer service.

‘For instance, we get a lot of customers coming in to develop a photo to put in a frame on a coffin for a funeral. They’re distressed and grieving and we always give it for free. Customers can’t believe it.