John Timpson is chairman of a close-knit family business that stretches back to the end of the 19th century. But it is one of the least traditional companies in the UK, as Joanna Higgins discovers

John Timpson employs a leadership philosophy that could easily be a recipe for corporate dictatorship, namely: "I can do what the hell I want because it's my business". But you have to hear the way he says it—with the same easygoing rumble with which he tells me he's taken over a pub in Anglesey. Why? Because he and his wife, Alex, go there on holiday and wanted somewhere decent to eat. In typical Timpson fashion, the pub, refurbished and now overseen by Alex, took £38,000 on its opening weekend. "We don't really do things badly," he says absentmindedly, half to himself.

Running a business to Timpson is common sense, a phrase that comes up often in conversation and finds its way into his latest book, working title: Unconventional Common Sense. What matters in business is pretty basic, he says: "Training is very important, creating a great place to work, looking after the people, getting great people all the time". So far, so ordinary.
But Timpson really does run his business as he pleases. Or rather, as his employees and fellow board members please, employing what he calls "upside down management" to give his employees enormous amounts of autonomy. He rarely uses I, preferring "we" when talking about the Timpson operation, a diverse group that now encompasses key-cutting, engraving, shoe , jewellery and watch repairs, photo ID, dry cleaning, and a growing locksmiths service.

Timpson's approach would be alien to most other businesses, with the exception of Brazil's Semco, another family firm, where current CEO Ricardo Semler's handed over decision-making power to his employees. At Timpson, it certainly works. The company has "never done better than at the moment, by a long way," says Timpson. The business won countless awards and has been in the top 10 of the Sunday Times Best Companies to Work For every time it's entered.

Upside down management means each of the Timpson shops sets its own prices (within guidelines) and comes up with its own promotions. Employees control their training, and therefore how much of the weekly bonus they will receive. HQ, near Stockport, is described as a "facilitator"—there to help the outlets work better.

It's all John Timpson's work—a carefully constructed operation crystallised over years of working for the larger corporations that colonised his family's business from the early 1970s until the early 1980s, when he wrested control of it, albeit temporarily.

The ultimate sale of the core retail business in favour of the repair side in 1987 was traumatic, but it turned out to be the making of Timpson. And if it hasn't been a smooth path from there to here—the 1995 acquisition of competitor Automagic would make Timpson the market leader, but the deal was fraught and the repairs market was ebbing away—it's at least been the path of his own choosing. Having bought back total ownership of the business in 1991, he's kept it independent, making the occasional acquisition to create a thriving and diverse organisation.

He's kept it pretty close: his son's the CEO; his wife runs the White Eagle; his niece is in charge of the locksmiths business. It may go against common family-business wisdom, which dictates that at some point, you have to bring "fresh eyes" in at the top, but it's working: Timpson today is a £100m organisation with nearly 600 outlets in the UK and Eire.
He's much admired, particularly on home turf, the north west, where one business writer refers to him as "a master." Even those that don't know him personally seem to have an opinion: "I think the upside down concept is brilliant," says Rupert Merson, a partner at accountants BDO Stoy Hayward, which also has expertise in family business matters. "A key challenge confronting any family business is the integration of non-family members. Timpson has clearly done this successfully, with upside down management an extreme manifestation of it," he says. A devolved structure is flexible and takes full advantage of everyone's brainpower. But Merson questions whether it is robust enough during times of trouble, when a more centralized approach is needed. He also raises the issue of succession as a key challenge for any family business, but this is something Timpson will have considered, given his own experiences with his father and grandfather.

He is writing Controversial Common Sense when we meet—he's produced at least nine books, a couple of weighty tomes and a series of how-to picture books with titles such as How to be a Great Trainer, How to Create a Great Place to Work, and How to Avoid an Employment Tribunal, all subtitled The Timpson Way. The current book is about leadership, the Timpson way, and is primarily for Timpson's own employees. It is a sort of succession planner, explaining how upside down management works.

"The way we do it is unconventional," says Timpson. "We really delegate. We trust people. We give them freedom and the space to get on and show how good they are. In some ways, you feel you're running the thing on a bit of elastic; at the other end is the conventional way of running a business. Everyone talks about best practice, about how they've got to have rules and conform with this, that and the other. It's not helped by all the compliance rules for public companies; everyone wants to cover their backs," he says, warming up to a particular bugbear. "It's about box-ticking and back-covering. I don't want that and I don't need it. It's my business and I can do what the hell I like."

It's a structured freedom, although Timpson bristles at the use of the word control. "Yes, we're quite organised, but we are organised purely to support the people to take more money. We're not telling them what to do, we are organising the support to help them do it better."

Have you seen our training manuals, he asks, then disappears for a while, re-emerging under the weight of a stack of ring-binders filled with company training aids. There's a progression chart for managers which lists tasks and achievements they tick off as they go—an exit interview or helping to set up a new branch. (The layout, he tells me, was inspired by a regional manager's scuba diving log book.) There's a career chart to show the training needed to progress to regional manager. "They choose what they are going to do: they are responsible for their own training."

And since training is linked to bonuses, the more experienced they are, the more points they get and the bigger their share of the bonus. "So they want to learn," says Timpson. Common sense.

What he's most proud of, though, is what he calls "the magic dust"—the ideas, usually employee-generated, that really make the Timpson workplace what it is—birthdays off; recognition for long service; the bonus scheme. These become part of the culture, "the sort of things that if we stop, it's like the end of the world. " He happily admits to nicking ideas from others such as Richer Sounds founder Julian Richer. "But one that's definitely my own is 'dreams come true'."

To celebrate growing from £500,000 profit to £12m in 20 years—"it's beyond my wildest dreams where we are"—Timpson is asking employees to tell him their dream: "They might want to go and see The Who or they might want to go to Australia. For the next year, I'm going to make someone's dream come true every month."

He spends a lot of time talking to Timpson employees and has been asking them what the most important elements of the Timpson business are, what he should hang onto.

His new book will feature all of this, along with the history of the shoe repair business, as well as why stalwarts of the 1960s high street are gone—"important because it helps you understand what's going to happen in the future."

So, how has Timpson survived? "It's blindingly obvious to me that if you're in the retail business, you are successful by doing what the customers want, with good service". He seems mildly annoyed by the number of big businesses that consistently get it wrong. "[They end up] sitting in meetings, hiring a load of consultants, and coming up with marketing theories. They don't listen to the people who run the business, the people who serve the customers."

He believes too many businesses are run for short-term profit, and that breeds business's "strange reluctance" to look after people well. "For instance we have four holiday homes [for employees] and we're buying number five at the moment. People have asked us why we are doing it—and how much it costs. I think these are pretty stupid questions. Because if the future of the business depends on how well we look after our customers, then I'm totally reliant on the people in the shops to do it. And the way to give good service is to give people the freedom to make their own rules. You can't achieve amazing service with rules. You just get something very ordinary."

This general desire to make a quick buck without any sense of the long-term survival of the business is clearly a bugbear. You've got to give things time to take, he believes—watch repair, which Timpson introduced in the late 1990s, didn't do much initially, but is now approaching £12m a year.
CEO-churn is also accelerating, with bosses of high-street operations replaced before they can find their feet. "You've got VCs making it quicker, thinking they can parachute in a good guy—and what these guys are good at is increasing profits. I could increase the profits of this business next year, probably by £5m, by getting rid of a whole load of costs. This would not affect today's business, but those costs are keeping the business going forever. Cash is the most important thing to me. Profit is a manipulated figure anyway."

What matters most is growing and getting better: "Are we good at what we do? What we are interested in is that the shops look good and provide good services. That is what really matters."

"I suppose we are more passionate about the business, because it isn't just us. Others might be interested in their careers. This business is our career."

He and James visit different shops every week, a tradition he's kept up since starting out in the business—he seems momentarily nonplussed when asked how he finds time. It's where the innovation comes from: "If you're spending two days going round shops, once every three months, you'll find something magical." Another Timpson communication tool is the weekly newsletter, which tells every employee how the shops are doing and includes a piece from Timpson himself.  "Every shop we go to, we take a picture of the people," he says. They feature in the newsletter.

He professes to pay little attention to the management accounts—but that's because he already knows how each of the outlets is doing. One of the few areas where he maintains central control is in selecting the shops. "I can't totally describe why, but it's one of the fundamentals and the sort of thing that will be in this book. It's what matters most. Timpson is constantly opening branches—some 35 are planned for the next 12 months—and he and James agree every site.

"I suppose we have as true an ownership of the business as anyone could have," he says, but adds: "If James and I disappeared, it would go back to [a conventional set-up] within a year. Anyone else coming in would do it in a traditional way, because I don't think they'd have the confidence to let go." This is why his whole area team are home grown. "The only people who come into this business from the outside are specialists and then we have to teach them exactly what all this is about."

Timpson's personality pervades the business: the informality, the dislike of airs and graces or status symbols, a scepticism about fancy data-capture technology that delivers no bottom-line benefit. He dislikes the targets and regulations so beloved of government: "I don't think they [the government] make much difference; the sad thing is we take too much notice of them. The advantage of being in this sort of business is that if you've got something that is stupid, I can tell people we're not going to do it. People don't use common sense. Business has got to keep putting the common sense ruler up, asking, is it really the law; then saying, even if it is, what's anyone going to do about it if I carry on this way?

"You go to the golf club and they don't have any soap in the showers these days. Health and safety. But I bet there isn't a law saying you can't have soap in the shower."

His family-centric approach even influences the charity the business supports, Childline. According to Mark Bradshaw, the charity's corporate manager, the alignment of values is natural: "It is a family business, with staff viewed as extended family, so [involvement] helps reinforce the brand as well as influencing the perception of the business." The company has raised a total of £900,000 for the charity since becoming involved in 2001—"a huge sum for one company". It's now deeply embedded in the organisation and customers are given the opportunity to contribute via a "small jobs scheme". But Bradshaw says: "It really is spearheaded by John Timpson and wouldn't have had the same impact had he not been leading it." Timpson and his wife, who have five children, have also fostered around 85 children since 1979, something they continue to do. He's reticent about crediting the experience with too much influence on his business, but does say that it helps him appreciate the  "offstage difficulties" people encounter.

But that strong leadership has a downside, too. BDO Stoy's Merson believes this is a challenge for an organisation like Timpson's—to find a way "of bottling and preserving the ethos" beyond the founder's tenure.  "Lots of successful businesses have taken an element of the personality of the founder. But what happens when they are no longer there? It needn't be that the business suffers; it's not necessary to have part of the bloodline to keep the ethos."

Perhaps Timpson is ahead of his time: flexible working and all that it entails indicates a less centralised approach is the way forward. Perhaps that's what the book is for. Whatever the case, Timpson's not going anywhere for now. Will he ever stop? "Why should I? If you were keen on golf and someone offered you £100,000 to never play again, I don't think you'd take it. Because you're taking away the main thing in someone's life. It's like saying, I'll give you £100,000 if you chop your left leg off. This the most interesting thing I've ever done."

Sole survivor

Timpson's first retail outlet was opened by William Timpson in 1865 in Manchester, expanding into shoe-manufacturing (1884) and repair (1903) and going public in 1929. In its heyday in the 1950s, turnover was around £10m and profits £900,000.

The business was family run, and John Timpson was a director by the age of 26. But there was no clear succession plan. By the time John's father, Anthony, became chairman, the leadership of the group was showing cracks.

"People close to the business thought the new management structure was an unfortunate compromise. My father and his cousin Geoffrey were opposites, neither appreciating the other's strengths and never working as a team," writes Timpson in his 2000 book, Dear James, an open letter to his son and a valuable business read for any director.

Internecine struggles ultimately led to Anthony's dismissal and, in 1972, the business was sold for £28.6m to United Drapery Stores. It was a watershed for John Timpson: "I was no longer the director of a family business with an assured future. Watching my father being undermined has stuck in my memory and shaped my management style," he writes.

Timpson stayed on with UDS and was given charge of the Timpson business in 1972. In 1983, UDS was taken over by Hanson Trust and in September 1983, Timpson led an historic £42m buy-out of the family firm. After initial success, sales stagnated and Timpson brought in outside management, but to no avail. In 1987, he sold the shoe retailing side of Timpson for £15m. It was a tough decision: "I wasn't only selling a business. A lot of people I knew well went with it. I had let them down."

Timpson on...

Drongos
It's really important to have the right people [in the business]. You can't do it without the right people and that's about getting rid of the people who are no good. We're very strong on getting rid of drongos.

If you consistently demand of them what you are getting from others then with a bit of luck they will leave. Never stop doing that. If you want to improve the business all the time, you have to improve the people. By definition as you improve your game, someone who was OK [before] becomes not OK.

People put up with people who are pretty poor. Everyone makes the mistake of thinking people are equal. But they are not equally good. Some people are brilliant and some are bloody awful. I don't want awful people in this business. And if you're not careful, you run the business for the benefit of people who are no good. A lot of all this employment law is to pander to the people who are no good.

Climate change
I believe the climate is changing and there's sod all you can do about it, except a little bit at the margins. One of the things [government] will do is introduce more things to direct business to save energy and all this sort of stuff—which, really, are taxes. And we will find ways to get round them. And there will be loads of consultants who suddenly appear to help us do that.

Giving things time
Try it in a small number of shops [and] only try it in the places it's going to work. One of the most stupid things people do is to say, "we'll try it there, because if it will work there it will work anywhere". No. Pick the most promising, not the least. And give someone the project.