The retail world according to Timpson
He pointed to the culture of the business and the strong focus on looking after staff members on the shop floor (who he calls the magic dust) are what makes the operation successful and achieve annual sales of £150 million from its 800 units.
“Forty per cent of our sales depend on how good our colleagues are. We have upside down management where the most important people are those who serve. The higher up the company you are then you simply help the colleagues to serve customers. The blocking point we find is middle management and I spend a lot of time sorting this out,” says Timpson.
He says there are only two rules for colleagues in the shops - put the money in the till and look the part. This is an example of how things are kept as simple as possible. Timpson recalls ripping out a £12 million Electronic Point of Sale system from one company that it bought and replacing it with “crappy Argos tills at £400 each”.
He says he probably knows more about the business after putting in the new structure than he did from when the old complex IT solution was in place. This simplification translates through to the shop floor where there are no computers in sight.
What the colleagues on the shop floor prefer is to be empowered, which manifests itself in them having the responsibility to make decisions. This involves the likes of sorting out customer complaints (helped by a £500 budget), and not having fixed retail prices in the stores.
“We only have price guides and if we stopped this then we'd lose 15 per cent of our sales. We allow them to run the business and haggling is a big way for them to use their personality. And in our business you've either got a personality or you're a 'drongo'. We like to suss out personality,” he says.
Attracting suitable colleagues is absolutely imperative and Timpson says he can get rid of any unsuitable person in only five weeks through a combination of being “ruthless” and talking to them straight as you would a friend. This approach has led to only one tribunal in the last 18 months.
For those people that become part of the team Timpson says a key incentive is the bonus scheme, which equates to them being paid 15 per cent of everything they sell above their target that is set at 4.5 times their wage level.
They also have access to an array of “tools” (that could help them if they find themselves in trouble) including the company's hardship fund that provides loans to colleagues. There is around £300,000 out at any one time of which 99.8 per cent will be paid back in full. The company also has holiday homes that colleagues can book and it recently acquired a hotel that is being converted into apartments.
Timpson admits that these benefits are repeatedly highlighted in the company's weekly newsletter. “We make sure they know what the benefits are, which shows them that we are unique. The newsletter also enables us to control the communications and gives out
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