Swede talk: Interview with Anders Bouvin, CEO of Handelsbanken UK

Square Mile Magazine, August 2015. Original article, p68-70.

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“That was the big revelation: Handelsbanken really is me.”

A Swedish voice greets me as I arrive at Handelsbanken’s UK headquarters, here to guide me to the corner office. The glass and steel building near the Tower of London is undergoing refurbishments and there are no signs anywhere, so a bit of hand-holding is necessary. Or maybe this is just Handelsbanken’s standard welcome? After some time in the company of UK CEO Anders Bouvin, I’m inclined to think the personal touch may be everyday procedure.

There’s a saying at Handelsbanken: “Why not do things the other way round?” Bouvin may have an office with a showstopping view from the Shard to the Eye, but that’s the beginning and end of any kind of flashiness. Bouvin is in charge of the UK operations of this Swedish institution from 1871, which is indeed known for doing things differently. In fact, most stories about Handelsbanken UK is about everything the bank is not: no bonuses, no sales targets, no marketing, no call centres, minimum central oversight. Then there’s the fact that Handelsbanken keeps opening UK branches at a time when peers are closing them – while at the same time having delivered a higher return on equity than its average competitor for 43 years.

Bouvin is friendly and straightforward when talking about his bank, if a little no-nonsense about it: Handelsbanken’s approach isn’t really anything new – it’s just the traditional approach of putting the customer at the heart of the operation. Bouvin’s Swedish accent is underscored by the occasional phrases that mark him as a Londoner; he’s lived in the UK capital since 2007. “We used to live in Wimbledon, but we moved into the city just a couple of weeks ago,” says Bouvin, who’s in a blue-patterned shirt and tie, jacketless on this hot day. It was the commute: “It’s 21 torturous stops on the District Line here from Wimbledon. Or put it this way: 21 planned stops, but you can add another four or five!”

About one eighth of Handelsbanken UK’s 1800 people work in this building, which comprises most of the UK head office, plus the South-East regional office – those branches are the green pins on the map on the wall. My first impression of hearing two Swedish voices turns out to have been a fluke though, as Bouvin doesn’t know how many Swedish speakers are in the building: “Oh we don’t count them! Maybe … 15?” The organisation has a very strong culture, says Bouvin, so you’ll find senior people from the Nordic region in the UK: “But we consider the UK a home market, just like Sweden. Here, we operate as a British bank and compete for British customers.”

Bouvin admits it can take some explaining for people to get what Handelsbanken is about: “We don’t really fit into the norm, so to speak, when it comes to how banks operate and how they organise themselves.” But that’s mostly an issue with bankers (and journalists), as customers get it right away: “When we explain to our customers, they understand immediately. That’s obviously what counts, isn’t it? Our values are very much common sense.”

Screen Shot 2015-08-06 at 14.14.04A different kind of branch
Handelsbanken now has about 200 branches in the UK, having opened about 20 per year over the past three. “We open a branch when we find the right person to lead it. That person has to convince us that he or she shares our values.” This is the ‘Church Spire’ principle: “We don’t micromanage branches from the centre. It’s all about empowering people to operate independently within the central principles.” This approach may be unusual in itself, but even more unusual is Handelsbanken’s steady pace of opening more branches at a time when competitors are closing them. I ask Bouvin about the rationale behind this, as competitors are pushing digital services. And with the tone of a patient man who’s clearly had to explain this a few times before, the CEO explains how Handelsbanken doesn’t buy into this narrative of the death of branches:

“This is not our experience at all. Our branches break even within 18 months – that’s proper breakeven, not subsidised. Our experience is that customers appreciate branches,” says Bouvin. But there’s a catch: Handelsbanken branches don’t operate the same way as your average branch: they look more like offices than High Street banks, for one, and staff are authorised to make decisions. “You have to operate branches in a way that customers can see they offer something. If that’s not the case, then you’ll probably feel branches are going out of fashion. … If you ask whether branches are still relevant in today’s society, our belief is absolutely! If you run them in a way customers want you to.”

This is interesting, I say to Bouvin, who interjects: “Isn’t it?” – but I still prefer using an app. “So do I!” says the CEO, as he kindly puts me in my place: Handelsbanken is no slouch on digital, it’s just that the conversation tends to focus on the growing branch network because it’s unusual. “The reason Handelsbanken is growing in one of the most mature banking markets in the world, is all about service,” says Bouvin, after he’s graciously listened to me complain about the agony of getting a mortgage from a competing UK bank. “Instead of building a bank with processes customers don’t like and have to adapt to, it should be the other way around! You should build a bank around what customers want. A satisfied customer is key to financial and commercial success.”

Sceptics will be interested to hear that Handelsbanken’s group profits reached a record high in 2014, which also explains why Bouvin takes no issue with being called traditional: “Our values are traditional! Being customer-centric, cost-conscientious, prudent and having a long-term view.” Bouvin won’t share his bank’s UK market share, “because we don’t really focus on market share, we focus on satisfied customers”. It’s small, he’ll admit, but it’s growing: “And that only fills us with enthusiasm.” There are no growth targets either of course: “We don’t do fixed planning, we don’t do targeting, we don’t … oh we could talk a lot about this. It’s ridiculous, trying to guess.”

Bouvin keeps using that word – we – as his point of view is also that of Handelsbanken: “We have a very strong corporate culture. We really do sing from the same hymn sheet.” He won’t even describe himself as the boss: “I definitely wouldn’t say, in any way, that I run the bank!” He laughs. “The head office’s role is to support the branches. My role is to make sure this system works, so that we don’t inadvertently introduce mechanisms that could disrupt this intricate system, I would say.”

A job for life
Britain is Bouvin’s seventh country of residence, and he refuses to pick a favourite. Nor is he especially keen on describing traits as a Swedish thing: what’s happening here is a Handelsbanken-specific phenomenon. Like how he recently visited the Clifton branch in Bristol, where the staff always take the bus to client meetings. The CEO practices this culture of thrift also personally: “I was at a Mansion House black tie dinner a few weeks ago. I took the Tube, as you do, but I didn’t see too many black ties on the train. But at the Mansion House there was a big, big queue of black limousines. I think there are thousands of stories like this in Handelsbanken. We try to do things in a simple, low-key way.”

Bouvin speaks passionately about the Handelsbanken ethos of working in a collaborative manner, avoiding pitting staff against customers in order to achieve targets: “I think it’s natural for people to want to do a good job. It’s natural for people to want to help each other. A big part of Handelsbanken is that we try our best.” Handelsbanken was actually Bouvin’s first job, joining fresh from the University of Lund at age 25. “I had some language skills and a somewhat international background, so they put me in the international division at the head office in Stockholm,” says Bouvin, who spent the first years of his life in Zimbabwe. Upon request, he modestly lists his languages: English, French, Swedish, Danish, and he gets by in German. The fact that his first job is also likely to be his only job was a fluke, though: “After three years, I started to understand what Handelsbanken is, and the values of the bank. … I was lucky! I had actually ended up in an organisation with values which are absolutely compatible with my own. That was the big revelation: that Handelsbanken really is me.”

Bouvin (56) is married with two children: “My son is at university in London, and my daughter is going off to study in Boston.” I ask if they’re on the path to become citizens of the world too, and Bouvin counters: “Who is a citizen of the world!” He doesn’t like the description: “I’m not sure about that. I mean, I am me!” He laughs. “I support Sweden in football and hockey. But you can put me in basically any country, and I will probably enjoy myself.”

I get the distinct impression the CEO would rather not talk about his personal life, so I ask him about the football shoe sitting by his desk: “That was Henrik Larsson’s. Do you know him?” Bouvin tuts when I say no. “He’s a famous Swedish footballer who also played for Manchester United.” The shoe seems tiny. “He’s not a very tall guy. But he is good! Small feet kick the ball harder, because the force is concentrated on a smaller area.” There’s also a Swedish Dala horse, and a Queens Park Rangers banner – the CEO stops to check that I know who they are: “I’ve always been a fan of QPR. Me and my son, we go there and watch them win, every now and then. And the trophy over there,” says Bouvin, pointing to a small golden cup: “Handelsbanken UK got that for being the best bank in the group for handling customer complaints.” He nods, pleased. “We had the quickest response times and best outcomes.”

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Sir Charlie Mayfield, Chairman of the John Lewis Partnership

Work. – December 2014. Original article.

work coverInterview with Sir Charlie Mayfield, Chairman of the John Lewis Partnership
For an institution so British to its very core, the Partnership inspires feelings in direct opposition to the stiff upper lip. Because who doesn’t love John Lewis? And for anyone on the fence there are those devastatingly charming Christmas campaigns. Of course, the John Lewis Partnership exists to serve much grander ideals than clever marketing. Company man that he is, Sir Charlie Mayfield is distinctly British too, in the sense that he may be clearly proud of the Partnership but he remains tastefully modest about it. Mayfield’s smile when the Partnership’s enviable reputation comes up suggests this matters to him a great deal, but of course, there’s no resting on laurels here:

“Our reputation is both a privilege and a challenge. It’s something we think very carefully about. The last thing I want is to appear as the smuggest retailer on the High Street. We have to work very hard, every single day, at getting things right.”

The first law of the John Lewis Partnership, and also to Mayfield, is to serve “the happiness of its members”. Not once does Mayfield refer to just himself in terms of the work he does – it’s all about the group. Actually that’s not entirely true: Mayfield points out more than once that the partners have the power to sack him if they think he’s not cutting it. We’re sitting in the Chairman’s office at Partnership House in London’s Victoria, on sofas surrounded by green plants and abstract paintings. Mayfield is in a salmon-coloured knit tie and crisp white shirt, his jacket left on the hanger on the unseasonably warm Tuesday afternoon. Glasses dangling from the hand, he’s relaxed yet professional throughout.

The John Lewis Partnership is a story of how an employee-owned business can not only match the performance of its retail sector peers, but also beat it. People-issues are hard-wired into the organisation, but Mayfield is careful to stress how this, above all, is a business. Our conversation swings back and forth between these two elements – people and business – as if ethical practices were the enemy of growth. But as only 2% of British businesses are employee-owned, chances are Mayfield has had to explain more than once how a long-term holistic focus translates to a healthy bottom line.

JL1*** Now in its 150th year, the Partnership delivered a £129.8m profit at September’s results announcement, a healthy rise of 12.1% on the year before in what remains a squeezed market. But it’s something of a chicken-or-the-egg situation regarding what comes first: the desire to run a people-centric company, or to run a profitable business.

“Somewhat unhelpfully I probably won’t be able to separate the two out for you!” Mayfield laughs. “In essence, the focus of the business is the happiness of its members. We are really focused on partners through their worthwhile and satisfying employment – in a successful business. That’s our our ultimate purpose, and from that stems everything else.”

Certainly, this priority will affect how decisions are made: “We won’t say that the most important thing is to make a certain profit, each year. But what we do prioritise is having a sustainable business that’s well-balanced, reflecting the needs of partners, customers, and profit.” This may mean the company won’t slash costs to improve numbers in a single year, unless there is a strong case for long-term benefit: “But what we absolutely will do is take tough business decisions to completely remodel and reshape our business where we think that’s necessary.”

So what happens when these “tough” decisions prove unpopular? “Oh, there will absolutely be controversy!“ Mayfield got plenty of “vocal” feedback after the decision to take out an entire level of management from the John Lewis department stores, making over 360 roles redundant. “We don’t shy away from those issues. But the manner with which we carry out those decisions may differ from other organisations.” In the case of the redundancies, the changes were implemented over the course of a year, encouraging people to find alternative positions within the company, and offering payment cushions.

“What we always do is, we say: ‘Look, we’re not running this business for any one individual partner. We are running it for the totality.’ We’ve always recognised that the greater good will trump the needs of individuals,” says Mayfield. “Though what we will do is try to implement change in a way which respects the needs of individuals.”

jl2*** The financial advantage of being a partner is attractive: people get an average of seven weeks’ pay in shared profits every year. “But the fact that way we share profits is almost as important. It sends a strong message about collective reward for collective effort. It’s not about equality, but fairness.”

The other vital element is how the management is accountable to partners. Throughout our chat, Mayfield brings up numerous examples of what this looks like in practice, as this openness isn’t just culture, it’s structure. Human resources is an important channel for implementing this, but the Partnership is also putting in place a central shared-services team whose job is to make the sure the principles are enacted consistently across the group. Already, there’s an elected body of people in every single shop, distribution centre or office, holding the local management to account. Registrars throughout the organisation ensure the business is run in accordance with its constitution, a document which includes a commitment to sharing knowledge. That means keeping discussions out in the open instead of secret meetings behind closed doors, and keeping facts available for all to see, warts and all.

“We don’t have a referendum on whether we are going to reorganise a particular area of the business, open a shop, or stock green jumpers. But the responsible managers make those decisions in the knowledge they are accountable,” says Mayfield. That includes himself: twice a year he faces a council questioning him on the performance of the business, before they vote on whether they want him to stay: “That is quite a key moment. Now, I have never lost the vote, but it still focuses the mind.” He nods. “It really does focus the mind.”

*** Accountability doesn’t mean the management will never be in the firing line, though. The Partnership caught flack this autumn when CEO Andy Street described France as “sclerotic, hopeless and downbeat”. Street was quick to issue an apology, adding that his comments were meant to be “tongue-in-cheek”. Earlier this year, at July’s council session, Mayfield found himself at the receiving of complaints from partners unhappy about the stress and pressure caused by recent years’ restructuring:

“Fundamentally, the council was not very happy with where we were, and they made that very, very clear. I sat and listened; I didn’t particularly like it, and I didn’t agree with all of it either. But that is the view of the owners of the business, so whatever my views, I listen to those opinions.” The follow-up came in October, after Mayfield commissioned a report on how the changes were progressing: “That was a very good session, and as a consequence, we have decided to make a few adjustments. The direction is still correct – we are very confident of that – but we made some adjustments in-flight.”

A unusually hands-on Chairman, Mayfield took an oath to run the Partnership in accordance with its constitution. He acknowledges he’s probably more focused on people-issues than perhaps the average Chairman: “But I would really encourage you not to separate that from the business. We focus on the business, which happens to be run by 90,000 people. Therefore, the best way to achieve the best results is actually to focus on the people running it.”

Having said that, Mayfield will readily assert that the effects of the Partnership is vital to the success of the business: “There is now a good body of evidence which shows employee-owned firms outperform their PLC company peers in overall performance over the economic cycle. In areas like job creation, productivity improvements, and well-being, many do even better.” Looking at Waitrose, product innovation can often be attributed to long-standing relationships with suppliers: “Don’t get me wrong: we have very commercial relationships with our supplier base. But we try to put them on mutually beneficial footing.”

jl3*** Mayfield became Chairman in 2007, but he first joined the Partnership in 2000 as Head of Business Development. “Before this, I was working in management consulting [at McKinsey & co] which I … enjoyed?” Mayfield laughs. “I say that with a degree of hesitation, because I’m not cut out to be a career consultant. I just don’t think I’m designed to be solely in an advisory role.” Still, the experience of working across retail brands was useful: Mayfield now chairs the UK Commission for Employment and Skills, and was appointed Chairman of the British Retail Consortium this March.

In the rare moments when he’s not working, Mayfield (48) lives in Newbury with his wife, a teacher, and their three teenage children. And yes, the kids have had a taste of the family business, with a bit of work experience at Waitrose before going off to university. “I spend lots of time at work, so when I’m not working I basically want to be at home with family. We have two large dogs that need a lot of walks, so it’s that kind of thing. […] It’s really important to defend the time away from work. My wife would probably tell you I don’t do it very successfully!” He laughs. “But I think I do, reasonably.”

Being in a leadership role within a partnership means potentially exposing yourself to a higher level of internal criticism: “Sometimes people find that hard to take. But I would say it’s a great strength to the business that we do that.” It may also take a little longer to implement change: “But this is not for soft reasons. We think doing so gives us a better long-term outcome. And it’s always the long-term that matters.”

This commitment to playing the long game cost the John Lewis Partnership £47 million last year, as the company discovered a discrepancy in holiday pay going back six years. The company could probably have got away with back-paying just part of the money: “But we decided that was just completely wrong. […] Rather than using the law as a device to avoid payment, we should actually say: ‘Frankly, we should have paid people more.’ These are the people who own our business. We just need to take this on the chin.”

This also goes to the heart of what the company means to Mayfield personally: “It sounds terribly cheesy, but I never cease to be impressed at the level of motivation and commitment [the partners] demonstrate – to each other, and therefore to the Partnership. We’re very fortunate to have an organisation which reinforces and encourages that.” The Chairman is usually recognised when he goes into a shop, where he’ll chat to partners who have been with the company anywhere between a week and 30 years. “They are working hard, are proud of what they do, and they are trying to do their best. That never ceases to be a tonic for me. […] There are thousands of people like that, who are impressive and deserve the best possible leadership we can provide.”

jl4*** Mayfield is careful never to say the employee-ownership model is better than the alternatives, but absolutely, he’d love for Britain to have more partnerships. “I would be delighted if there were more [employee-owned] companies,” he says. “But it’s not everybody’s cup of tea!” In any case, the John Lewis Partnership has been campaigning for five years to ensure employee-ownership is a financially viable alternative for entrepreneurs selling their businesses, as is now the case following October’s Finance Act. Next, the Partnership is running the ‘Inspire EO’ conference in February, aiming to educate company owners about the benefits of this model.

“I think there’s an increasing interest in not just how businesses perform, but in how they behave,“ says Mayfield; he would like to see the number of British employee-owned companies to reach 10%, up from 2% today. “Reputation matters, also in terms of very hard-nosed measures of financial return, and so it’s a key consideration. It’s probably a good thing that more businesses are thinking more seriously about how to preserve that.”

Despite his insistence that the John Lewis way is not for everyone, Mayfield is at his most enthusiastic when talking about his work to spread the word of its benefits: fairness for employees, the stability of a long-term outlook, and the benefit of plurality in a country’s business ownership. Maybe he’d be better suited to consultancy than he thinks? Clearly he has a desire to affect change beyond his own company. Mayfield laughs: “Well, that’s just being an advocate for a form of ownership I think deserves a greater awareness and following.” Again the company man, proud yet tastefully modest always.