How John Lewis’s CEO tackled a crisis

Nish Kankiwala is the first chief executive of the John Lewis Partnership — and probably the last.

So great were the challenges facing the employee-owned retailer by the start of 2023 that its then chair Sharon White ripped up a decades-old management structure to create a CEO post for the first time.

She asked Kankiwala, an affable executive with consumer goods experience, to swap his seat on the John Lewis board to support her at a time when the group faced an existential crisis. At one point people asked “is the partnership going to survive . . . should we be retailers any more?” says the 66-year-old chief executive.

Kankiwala’s mandate was to help accelerate the turnaround plan that had been laid out about two years earlier by White to tackle the shocks of the pandemic, surging inflation and the cost of living squeeze, all in the context of increasing competition from rivals.

Together, White and Kankiwala pledged to focus “unashamedly” on John Lewis’s retail offering by investing in its brands — the department stores and Waitrose supermarkets. They ditched targets to derive almost half of the company’s profit from outside retail — businesses such as rental homes and financial services — by 2030, which had been a key plank of White’s previous strategy.

Now John Lewis has turned a corner — it posted its first annual pre-tax profit in March after three years of consecutive losses and has cut debt and reduced costs — the business will return to its traditional leadership structure. Kankiwala will step down in March, although will remain an adviser to the business. Jason Tarry, the former Tesco executive, who started as chair in September, will run the group.

“[It] was always supposed to be a two-year gig,” says Kankiwala. “We’ve achieved what we set out to do in this period . . . the model is right, we’ll go back to the chair role.”

Kankiwala rejects the suggestion that he stepped into an operational role because White, who previously ran media regulator Ofcom and was a senior Treasury mandarin, lacked retail experience, although he does acknowledge the board had sought out someone with a more commercial bent. “I can’t change how people see me or Sharon,” he says. “What I do know is what we’ve done, as a team, [we’ve] delivered a phenomenal amount of change at a time when I think things were tough, externally and internally.”

He says his and White’s skills provided “the perfect chemistry” to accelerate the transformation. White focused on protecting the employee-owned model, the wider strategy and the big commercial decisions; while Kankiwala has driven performance and profitability day to day.

Their efforts had shrunk the workforce by 3,800 to 70,500 last year, down from 80,800 in 2020, and changed working patterns to boost productivity. There are now plans to open up to 100 new Waitrose convenience stores and modernise existing shops and systems.

Some observers have questioned whether the decision to drop the chief executive role in part reflected Kankiwala’s suitability for it. He previously held roles at Hovis, Unilever, PepsiCo and Burger King.

The CEO post “could have been quite a good idea had they appointed a retailer”, says Richard Hyman of Thought Provoking Consulting. “But they didn’t . . . Being a consumer guy, a smart private equity guy, and being a retailer, are completely different skill sets.”

Hyman adds that “cutting costs is fine but you need to drive the revenue line”, highlighting last year’s group sales of £12.4bn, up only 1 per cent year on year, as a “weakness . . . at the heart of the partnership’s decline”.

Kankiwala, who was born in Surat, India, and moved to the UK with his family in the 1960s when he was seven, describes himself as a “plain-speaking bloke from the east end”. He says his upfront management style, honed at PepsiCo, helped him to get the company’s employees onside with trickier aspects of executing the renewed strategy.

“I think the career break[through] was when I joined PepsiCo after 15 years at Unilever, and within about six months, I was picked as one of 12 to work for Indra Nooyi, who was our CEO, as part of transforming the business. That’s probably where I learnt my métier, my skills.”

He learnt about being focused and having “real clarity about what we’re doing”; scale — “we used to talk about doing big things to big things” — and pace. “Those three things have been stuck with me ever since”.

Such skills are all the more important at John Lewis, where the unusual employee-owned structure means management has a limited ability to make significant decisions without the support of its workforce.

Kankiwala says it was helpful to have been on the John Lewis board and have an understanding of its culture and problems before becoming chief executive. “I had two years of due diligence in some respects.”

He met informally with several employee groups before he announced his transformation plan in November 2023 and said: “‘Look, this is it, this is what we’re going to do’ . . . that openness and transparency and plain speaking was so important, so that we could get the message [out] very quickly.” 

He adds that to gain the trust of the partnership, “I just laid out what I thought was the truth and said, ‘This is where we are.’” The most important thing was to “take the uncertainty away” by implementing a clear strategy focused on retail and “get the hearts and minds of our whole partnership in one place”.

His ability to connect with people from shopworkers to the boardroom came from his upbringing and education, he says.

As his parents sought to create a new life in the UK, his father was passed over for promotions at his job at British Gas so decided to try his hand at retail by buying a shop and Post Office. Later, while Kankiwala was at university at UCL studying to be a chemical engineer, he helped to run it when his father was in poor health. He rejected a place at Cambridge partly to be involved in the family business in London but also because it dawned on him two weeks before starting that he would not fit in. “I couldn’t see anybody like me at all in those days.

“The ability to engage and have a rapport with different demographics was much more likely at UCL than it was in Cambridge,” he adds.

Kankiwala recognises that people outside John Lewis may think the partnership model is a burden but he believes it is its biggest asset. “What external viewers of our business consider to be a potential liability is actually the opposite. The democracy — for me — has [enhanced] our transformations,” he says.

He believes the partnership structure should be something other companies turn to. The British government could use taxation policy to encourage more businesses to become employee-owned, he suggests, adopting a model that focuses on making sufficient rather than maximum profit, while giving back to society and workers.

Kankiwala must now lead John Lewis through the festive period — its busiest time of year, when it makes most of its money. 

Despite early signs of improvement in the overall business, he is not complacent. “The progress has been good. I would say we’ve got a lot more to do”, and while the company has “started to make some money, [it is] still not enough”. 

John Lewis is on track to make an annual profit of £400mn by 2028 but this is three years later than originally planned. 

Come March, he foresees a return to board director roles in the consumer, retail and education sectors, and expects to be kept busy by his three grandchildren. “I would describe my four years [at John Lewis] as one of those wonderful moments in your life that you weren’t expecting,” he says.