The Paper Purge

In 1884, when young Michael Marks, a Polish immigrant to England, opened a stall in the marketplace at Leeds, Yorkshire and began selling needles, thread, thimbles, etc. for a penny each, he refused to keep any paper records. Now, 75 years later, his penny bazaars, under his son, Sir Simon Marks, have grown into Marks & Spencer (237 stores), Britain's most prosperous retail chain, with annual sales of $420 million. Despite the chain's size, Sir Simon last week was in the middle of a retailing experiment to see if he could do as his father did--run his vast enterprise largely without written records.

Business Collapse? Marks & Spencer's vendetta against paper work started one Saturday early in 1957, when Sir Simon came across two salesgirls carefully filling out long inventory-replacement cards while customers fumed for service. "What are these cards for?" he asked. The girls did not know. Sir Simon found that they were to keep track of merchandise in the stockroom, to curb employee pilfering and to tell the store manager when to reorder. Sir Simon ordered them abolished and let the sales clerks go freely into the stockrooms to get whatever they needed to sell. Pilfering not only did not increase, but the clerks sold more because they knew exactly what was in stock. Furthermore, store managers found they could tell when to reorder simply by looking to see what shelves were getting bare.

From then on, war was declared. Sir Simon found that his company was riddled with ponderous forms. "I didn't understand some of them. Why, I couldn't be a sales clerk in my own organization." He told his staff to examine every form and ask, "Would our entire business collapse if we dispensed with this form?"

And so, while many businessmen are installing electronic gadgets to keep their records, 72-year-old Sir Simon is taking exactly the opposite approach. He has wiped out so much record keeping that he has junked 120 tons of paper forms, saved $14 million. He was able to cut prices 5% and was rewarded with an 18% sales increase from April through September 1960. Business in the second half of his fiscal year looks even better. Some 8,000 jobs out of 28,000 have been eliminated, but no one was fired, because Sir Simon promised when he began his Marksian revolution that he would absorb everyone either through expansion or simply not refilling a job when someone left.

Trust Everybody. Sir Simon also gambled that customers are as trustworthy as sales clerks, and stopped giving out sales receipts, which most stores demand before they will take merchandise back from a customer. Now, as long as an article bears the M. & S. special St. Michael brand name (commemorating his father), it is easily exchanged at any branch. He threw out time clocks, reasoning that it was silly to keep tabs on employees who were only occasionally late, just to catch the few consistently late arrivers whose habits would be known to supervisors anyway. He silenced the jangling bell in employees' canteens that announced when lunch periods were over, letting clerks decide among themselves when to eat, thus checking on each other. Thick manuals that covered what to do in any situation were tossed out, replaced by one slim book.

Luxury for All. Sir Simon inherited 70 penny bazaars from his father in 1907, expanded by convincing Britons that his green-and-gold-fronted stores were about the most efficient in the country and had the best bargains. His Marble Arch branch in London makes more money per square foot than any other store in the world, says Sir Simon, even though goods are limited to women's clothes, men's shirts, socks and sweaters, and food specialties. His merchandising credo is to give everyone "a little bit of luxury, to make a factory girl look like a debutante." But his customers are not limited to factory workers. When Prince Rainier and his Princess visited Britain last year they stopped at an M. & S. store to buy the Prince some cardigan sweaters.

Sir Simon still spends much of his time poking about his stores, chatting with clerks to see how much more paper work can be cut out. Any operation that has been in effect over six months--long enough for the paper work to sprout--is under suspicion.

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