With three decades of acquisition-led growth behind them, key cutting, shoe repair and watch repair specialist Timpson is the market-leader both on the British high street and, increasingly, in out-of-town retail parks and supermarkets. Miraculously, it remains a family-owned and operated business and attributes its success to giving its staff freedom and autonomy and to treating them with kindness and understanding.
Sound too good to be true? Think again. Timpson is now a 2,000-branch-strong business with turnover totalling £300m and profits of up to £20m. It built this successful business while creating initiatives to employ ex-offenders, who now account for ten percent of Timpson staff. It’s also widely viewed as one of the best places to work in the UK, winning various awards and recognitions for creating supportive and happy working environments for ‘colleagues’ from all walks of life.
Now, Timpson CEO James Timpson says he wants to see more businesses adopting the ‘Upside Down Management’ technique. He says that too many rules ruin businesses and damage profits. Instead, great people should be given “freedom to be creative” while at work. He hopes the pandemic, and the necessity for remote working, will have highlighted this to leaders around the UK and that real changes may take place as a result.
Timpson’s acquisition trail
Timpson’s route to its current position started back in 1995, when it took over 120 Automagic shops, followed by 200 shoe repair shops owned by the loss-making Minit UK. At the time, John Timpson, who is still Managing Director, said: "We will take a close look at how to reverse several years of tough trading at Minit, but already know our biggest investment will be dedicated to developing the people.” Already, the emphasis on putting people first was clear.
In 2008 the businesses continued to grow with the acquisition of 40 concessions within Sainsbury’s stores around the UK. This was followed six months later with the purchase of 187 Klick and Max Spielmann photo processing stores from administrators KPMG for a total of £1.3m. Timpson reported operating profits of £823,000 generated as a direct result of the acquisition the year after the acquisition was made. This suggested it was a very good deal for Timpson, who turned a profit in excess of £10m in 2009.
But they didn’t stop there. In 2017 the firm took over 198 dry cleaning shops from the Johnsons and Jeeves brand in a deal reported to be worth some £8.3m. The acquisition boosted turnover in the year following the deal, but profits lagged a little down from £20m to approx. £12m, although this picked up again in 2019, to in excess of £14m.
This brings us right up to date and, of course, to the COVID-19 pandemic. A pandemic that closed Timpson’s stores for months on end, leaving thousands of staff on furlough and the business having to turn to debt to get by.
How Timpson responded to the pandemic
The pandemic has closed Timpson’s 2,100 branches and left more than 5,000 staff with no jobs to do. However, the business was free of debt, which put them in the position where just stopping might not be all that disastrous. However, James Timpson admitted to having concerns about how to pay rents, rates and wages when you have to shut your stores.
He has leaned heavily on government help, which he praises for having kept his and many other businesses alive. Timpson was proud to be able to furlough all permanent staff and top up their wages from the 80 per cent provided by the government so that none of the ‘colleagues’ would be out of pocket.
Upside Down Management
If the pandemic is the ultimate test of the Upside Down Management technique (a term coined by James’ father and the company’s Managing Director, Sir John Timpson, then it passed with flying colours. Timpson has continued to support its staff through the crisis and when the sites can all reopen again, from 12 April 2021, you would expect them to be as loyal and hardworking as ever.
“A culture based on trust and kindness works when we recruit colleagues with an amazing personality,” states James. He has been outspoken about his commitment to a fairer working environment for employees, where they are given autonomy over their own branches. This means ‘colleagues’ have control over their displays, their promotions and even their break times. Providing they open on time and present themselves in the smart and polite way they are expected, they can be the masters of their own kingdom.
Timpson trusts his staff to get on with their jobs. He gives birthdays as paid holidays and offers employees use of 16 holiday homes. His generosity reaps the rewards of hard work and loyalty.
James says he would like more businesses to adopt this hands-off management style, adding that too many rules and regulations placed on staff can ruin businesses with great potential.
Timpson has acquired several firms from administration, many of them for almost no money at all. Some of these companies were driven into the ground by an over-controlling management style, which often arises when financial performance starts to falter.
Can managers learn to adopt a hands-off approach?
Although James Timpson is a great advocate for leaving staff alone, managers have their work cut out rising to new challenges post-pandemic. Timpson adopted the hands-off approach decades ago and has made a great success of it. However, as we move into a new era of remote working, most managers will now be faced with the challenge of managing teams that they rarely see in person.
A recent study into this challenge, carried out in mid-January 2021 by management consultants Actus, found that overseeing remote working staff is more time-consuming than managing staff in person. The study found that managers considered a ‘collaborative’ management style, where clear objectives are set for staff, who are closely monitored, to be the most effective. A hands-off approach was voted as the least effective by the managers interviewed in the study.
This flies in the face of what James Timpson is calling for. This contrast in viewpoints has thrown up some interesting questions and it will be fascinating to see how management styles develop over the coming 12 months as we emerge from the pandemic.
Perhaps James Timpson’s approach applies more to businesses that will be welcoming their staff back to the workplace over the coming months. For those running hospitality or retail businesses, for example, taking a leaf out of Timpson’s book might be a lucrative step. However, trust is the key to success when it comes to Upside Down Management or hands-off management and this can take a long time and a lot of commitment and energy to achieve.
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