“Give and you get more back”: Stuart Rose on ensuring staff loyalty

How making staff feel valued can bring huge rewards

Stuart Rose worked as a chartered accountant for 13 years before joining The Body Shop in 1987, becoming managing director and later deputy chairman. Since leaving The Body Shop in 2001, he has been chairman of Hamleys and lingerie chain Agent Provocateur.
When Piper invested in The Rug Company in 2008, Rose became chairman – a role he has today at MKM and Tom Davies bespoke eyewear business. He is non-executive director of Giraffe Restaurants and advisor to Environmental Business Products, Europe's foremost remanufacturer of inkjet cartridges.
Working with a diverse range of private and public companies, Rose has faced a number of challenges in his career. Here, in the latest article published in association with Piper Private Equity, he reveals how he applies a useful tip from Gordon Roddick to every area of business.

It was at The Body Shop that I realised I knew nothing about business. I'd come from running a corporate finance department at a firm of chartered accountants. It was here that I'd started advising Gordon and Anita Roddick and they'd asked me to join as their only other UK director in 1987. I learned an awful lot from them, especially Gordon, who gave me a basic principle with which I've always stuck: give and you get more back. It may seem like the most obvious lesson in the world, but it's amazing how many people don't try to get the best out of others and eventually end up wondering where it all went wrong. Gordon instinctively knew how to inspire great loyalty in all his working relationships, whatever the situation. In those days The Body Shop was broadly franchised outside the UK. We had a number of new stores opening around the world, not all of them instant successes. In fact, at least a couple of countries struggled badly from the very start – to the point where they were unable to afford to buy our goods. In each case Gordon ensured our response was flexible and sensitive to their needs. We gave them enormous amounts of credit and said: ‘Let's find a price you can afford.' They bought product basically at cost for a couple of years to enable them to survive. Of course they did survive and became very profitable in their own right. But even then, Gordon didn't ask for the money back. He knew, as a result, that they would be very strong and loyal franchisees and this would benefit the group as a whole. Which, of course, is exactly what happened. It coincided with our biggest growth period at The Body Shop. Obviously you must never forget the ‘business' element of a business relationship or you'll go bust. But recognise when long-term relationships need help – and if you help them, they'll remain long-term. When I became chairman of Hamleys Toy Group in 2003, we applied the same realistic, long-term thinking to developing a major franchise business in the Middle East and India – to similar effect. But Gordon's philosophy extended to all areas, especially the treatment of customers. When I started at Hamleys, our customer service was very patchy. Our staff all knew their train sets inside out, but many just stood around chatting to each other. If you happened to step into their line of sight you might have been served, but it was no more polished than that. Then the 7/7 London bombings happened. And within days, we lost a lot of customers – families stopped coming to London. The CEO and I discussed the crisis and I suggested that the only thing we could do was get better at service and convert more of the customers who came through our doors. So we got the staff together and told them we needed to change the way we did things or we'd be in serious trouble. We increased our training and customer service and it had a fantastic impact on sales. Before 7/7 we'd had a 36 per cent conversion rate; we ended up with 60 per cent, which more than compensated for the loss of customer volume and prepared us well for when the families returned. It's hard to engender the feeling ‘we're all in this together' into a business, but it's crucial if you want to keep growing. I can never understand company bosses who look upon the people who work for them as ants. Today I'm chairman of MKM, the UK's largest independent builders' merchant. In previous jobs elsewhere, the branch managers had been downtrodden and neglected. But now they've got shareholdings, dividends and a real stake in the business. They're all given a chance to change their lives and have given huge amounts in return. This inspired approach is down to founder David Kilburn. It's a philosophy shared by The Rug Company's founders, Chris and Suzanne Sharp. People are good almost all of the time and just need a decent chance to shine. If you treat them well, they thank the system for it and work their socks off – for themselves and for you.

This is an extract from '25 Years, 25 Insights', published by Piper Private Equity to mark its 25th anniversary. A specialist in consumer brands, Piper founded Pitcher & Piano and has helped grow businesses such as Boden, Las Iguanas and Maximuscle. To order a free copy of the book go to www.piperprivateequity.com


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