As Managing Director of Harrods, Michael Ward has one of the most prominent roles in luxury retail. Since joining the business in 2005, he has enabled Harrods to become the successful business it is today with eight straight years of soaring profits. The world-famous London department store broke its sales record in January this year smashing the £2 billion annual sales mark for the first time.
In this interview, Michael talks about the importance of trust as an essential element of the Harrods’ DNA which is at the heart of the success of the business.
On the importance of trust:
‘Trust is absolutely central to working overseas. The majority of our customers come from overseas. For instance China, where we represent broadly 25% of the retail spend of the Chinese in the UK. They shop with us almost entirely because of trust. We are pretty unique in how we have positioned ourselves in the market. The one thing we promote is that you can come here and you can trust that whatever you get will be the proper product, and if it’s not, we will refund it. People know that there is somebody standing behind the product at Harrods who is going to honour that commitment.’
On building a high trust culture:
‘It’s very difficult to build a high trust culture. It’s just simply part of the DNA of the company and everything we do every day. One of the things we pride ourselves on is fairness. In a way that fairness builds trust. For example, one of the first things I did was to ensure that everyone gets the same staff discount, so it is absolutely fair. There’s also an awful lot of ‘thank yous’ to people for what they do and that builds a partnership relationship rather than an employee – employer relationship. These small, day to day actions are implicit in the way we do things.’
On the role of the senior leaders in building trust:
‘It’s fundamental. I’ll give you an example. If there’s paper on the floor of the store, every one of our directors will instinctively pick it up. You lead in that way. It’s almost implicit in terms of how you set standards. It’s the little things that make a difference to the customer. The things that they notice and that have a massive impact in terms of creating stories that our staff and our customers tell other people that create a positive buzz about our brand.’
On measuring trust:
‘We have an employee survey that we do every two years that gives us a barometer of how our people perceive us and the way we handle ourselves. The highest measure in the survey is people being proud to work for the business. There’s lots of external measures as well. We are such a transparent society nowadays that we are able to monitor our performance and reputation through the glassdoor website where we are one of the top employers. The feedback we get from our rants and rave customer feedback programme is also very helpful in this respect. We send out two thousand emails every week to customers who have visited the store and their honest feedback helps us to keep a finger on the pulse of the business. We get feedback from our suppliers too. We deal with big international brands and the one thing they always say to us is that as an organisation we have no pretensions and that we are very open and honest with them’
On having a purpose beyond profit:
‘We do an awful lot with our staff, helping them to give back to our communities. We allow them to take time off work to do charitable work. We never play big on the charitable work we do. For example, we gave £1m to the Grenfell Tower disaster fund that probably nobody knows about. Just recently, we gave over our display windows to Vetements, a generation Y brand, where we filled the windows with piles of old clothes and engaged our customers to come and recycle. For us as a luxury brand it can be difficult to demonstrate our social values but this initiative showed that we can do this very effectively with a new generation who said they didn’t expect us to do it.’
The Nine Habits of Trust:
Harrods is a global icon in the retail world and it is fascinating to have the opportunity to take a glimpse inside it. What is very apparent is the integrity with which it conducts business with its customers and suppliers, as demonstrated through the habits of being open, honest and humble. With employees, it’s the benevolence they show to them through the habit of kindness, which in Harrods’ case is based on the value of fairness that Michael talked about during the interview. The habit of evangelizing is interesting. They don’t shout about their success at Harrods, they let their customers, suppliers and employees evangelize about their experience of the retailer. What emerges from the interview is the challenge of spreading the good news about the positive impact of leaders placing trust at the heart of their business and making this important asset of trust more tangible over time so that it can be replicated by others.
Our thanks to Michael for his time and for allowing us to share his insights from the interview.
Delighted to share that three new episodes of the The Trusted Executive Foundation podcast are now live courtesy of my friend and colleague David Wetton! These epics feature the three habits of integrity:-