From democracy to dictatorship, how a business is managed is integral to its staff culture – the better the fit, the better a company’s performance. Every manager has their own style of leadership – Paul Farley decided to find out how Loaf’s Charlie Marshall recruits, trains, incentivises and disciplines the team behind the fastest-growing homewares seller in the UK …

Simple, quick, and hassle-free – it’s the shopping experience every time-strapped consumer would choose, and is the principal philosophy behind Loaf.com. As the story goes, founder Charlie Marshall was driven to develop the homewares brand in 2008 after wasting an entire day looking for a new bed.

Today, it’s a £20m turnover concern with a profit of £1.8m. Last year, The Sunday Times Virgin Fast Track 100 named Loaf – with its annual sales growth of 81% over the last three years – the fastest-growing homewares company in the UK. The company is currently scouting locations for offline stores – Loaf Shacks – in south-west London.

Loaf’s growth is underpinned by its staff, a team of 40, soon to be 60. Early on, Charlie decided that the best way to offer an intelligent, honest and friendly sales pitch would be to ensure his staff – and, where possible, his suppliers – embodied these traits themselves.

Establishing a culture of creativity and integrity is hard enough – and maintaining it through periods of extreme change harder still – but, as Charlie reveals, the returns are well worth the investment …

What does it mean to be a Loafer?

Our culture is about treating people how we would expect to be treated ourselves. I suppose the reason it’s like that is because when I started the business it was just me answering the phones and dealing with the customers – it was very hands on. When there’s a problem, you just have to remember that it’s not a person being difficult – its just something that needs to be solved.

I think we have that same attitude with our staff – try to treat them decently, try to be disarmingly normal, with the general feeling that what you give is what you get back.

Was there any point that you considered that a central tenet in your business?

Absolutely. In our second year of business, I noticed that there was a ‘them and us’ feeling developing between the customer-facing front office and then the back office. It really worried me that, for the first time, even though we only had 10 people, there was already this mental divide. People were using the word ‘we’ to refer to their department – as opposed to the whole business. They didn’t understand what each other did within the business, and that worried me.

“When we recruit, we try to look for people that are like us, who think in a similar way – we Loafers tend to be naturally optimistic yet also quite self-critical”

At that point, I said: “Every week we’re going to have a staff lunch. I’m going to pay for it, and we’re all going to sit around a table together and talk – we don’t even have to talk about business.” It worked – immediately people started understanding what other people did in the business, what their thoughts, fears and hopes were, and the atmosphere completely changed.

What do you feel the ramifications would have been if you’d not tackled the issue?

They would have lost the spirit that the business was built on – that every single customer is precious, and they’re coming to us. And we have to be really grateful that we’ve got that one customer – and hopefully that will be translated 10,000 times over.

I remember, during one of those lunches, realising that there was no way I’d be able to know the amount of stress any member of staff – particularly the customer-facing half, who were dealing with huge volumes of calls – might be having each day. So I invented a widget, an app-type thing on our Macs – the Crap-o-meter.

Everyone in the sales team has a Crap-o-meter on their computer. Whenever they have a conversation that’s remotely stressful – be it a complaint, a difficult customer or a question – they log the nature of the stress, and assign it a level between one and six. At the moment in the day that the number of points they’ve accumulated hit a certain amount – I think it’s 20 – a loo on their screen fills with crap and explodes, and it’s time to go out, take a chill pill, relax.

This tells people when they need to have a break, and allows me to print off a regular report to identify the nature of the problems we’re getting, and which individuals are having more stress than others. Just by clicking on their screen, the individuals involved know they’re being heard, even though they’re not shouting about it. If all else fails, I could definitely go around the world selling my Crap-o-meter to businesses!

Did you bring any approaches from your previous businesses?

When I started Loaf, I had spent most of my adult life selling myself, and selling products – it was very easy for me to sell these products I was so passionate about to customers. So, as the business has grown, with other people selling on my behalf, it’s been really important to make sure that they understand everything about the product, and that they communicate it in the same way that we always have done.

I used to make soups for the likes of Pret a Manger and Pizza Express, and I noticed that those businesses had fantastic training schemes for all their staff. So, in recent months we’ve launched our Degree in Loafing. It’s something that every single person in the company has to go through when they start at Loaf.

It covers the way we talk and the way we write. Do we use semicolons when writing an email? Do we add kisses at the end? Basic things like that. The language is informal, laid-back, but confident, polite, and always accurate – it’s important there aren’t typos.

It’s a four-module course. The first is about Loaf, our ethos, how we view our customers, why we exist. The second is more about the services we offer, what we do in certain situations. The third is all about our products – that’s obviously a huge part of the course, and the manual talks about where we make our products, why we make them there, what makes them special, etc. The fourth part is about how to sell – basically, by being incredibly informative, inquisitive and clued-up, knowing your stuff.

How is the training implemented?

It’s a proper course – there’s an exam at the end of each module, it gets marked and you’ve got to pass with full marks otherwise you’ve got to resit the module, until you earn your Degree in Loafing.

It’s about to become a more formal affair – we’ve appointed a head of schooling to build on it, who’ll be going down to a much more granular level, visiting all our suppliers around the world, photographing incessantly, and learning about not just the products, but the individuals involved – how they get to work, what they have for lunch, etc – to find out everything there is to know about our supply chain, and then communicate that to our staff.

“We try to make sure things are spoken about as much as possible, and I think that’s one of the reasons our staff turnover is so low”

Our suppliers tend to be family-run businesses, with turnovers lower than £100m. I would consider a lot of them friends. On the whole they’re more than happy to participate.

What kind of follow-up action do you take in situations of stress?

Within the business, we’re all quite similar people. When we recruit, we try to look for people that are like us, who think in a similar way – we Loafers tend to be naturally optimistic yet also quite self-critical.

As part of the degree, we propose the following agreement: “When you come here, we want you to do the best work that you will do in your career. We will give you the tools to do that, and if anything goes wrong along the way, you’ve got to shout.”

Each head of department hooks up with their team in weekly ‘huddles’, which are always full of people sitting on comfy sofas and talking things through. We try to make sure things are spoken about as much as possible, and I think that’s one of the reasons our staff turnover is so low – we talk as problems happen, so people don’t bottle everything up and explode.

Have you taken inspiration from other companies at all?

I used to supply Pret a Manger – they have a brilliant in-house team mentality, training scheme and way of dealing with people. The other company is Innocent – it’s quite quirky and laid-back, but at the same time commercially viable and savvy. They’re laid-back because they’re clued up – there’s no room for anything else.

What’s your work environment like?

We’re in a big 5000 sqft open-plan office, with very high ceilings. It’s white and quite lofty, and everyone has a nice Mac to work at – but we are in the process of building our new head office at the moment.

It’s going to packed with fun stuff, lots of areas to chill out and talk. Also, I’m obsessed with magnetic blackboards – I think it’s important that anyone can walk into our business, and by looking at each department’s blackboard can see immediately exactly what they’re up to and what their goals are.

What are the working hours and benefits you provide your staff?

You start with 20 days holiday, get two duvet days – we’ve found that these cause the sickness rate to drop dramatically, because people are more likely to be honest when they just can’t be bothered to come to work – and an extra holiday day for each year worked, up to three. Our policy also says that your hours might be 9-5.30, but we’re not so bothered about what time you get here or what time you leave, providing you get your job done – that’s all that matters.

Employees need three things to thrive – autonomy, their own clear goals, a degree of complexity to their role. They must also realise there’s a link between their toil and reward.

For example, in our new product development department it’s very obvious that the harder they work, the better products we see at our photo shoots. For the customer-facing staff, success is a lot harder to measure, but we’ve worked hard to work out how to reward a sales team whilst not necessarily putting them on commission – we don’t want products being pushed onto customers that they don’t want.

“Being an idiot and having fun is the most important thing you can do”

So we have monthly one-to-ones, and staff get marked out of 10 on things like initiative, how helpful they’ve been, cool things they’ve done, how good they’ve been at dealing with any problems. We think that if you do all the rest, then sales will follow. At the end of six months, they get a bonus of up to 10% based on how well they’ve done on that ongoing assessment.

Isn’t that approach weighted in favour of those that are better at expressing themselves?

I suppose there is the possibility of that – but when they have their monthly one-on-ones with the head of department, there’s a culture of honesty. When they’re marked on the 10 criteria, they countersign that, take on board all the comments and write whether or not they agree with them – if it gets to the end of the six months and they only get 75% of their bonus, you want to make damn sure they’re not pissed off about it, but make sure they understand why they came up short.

What other rewards do you offer?

At the end of the year we have a proper Christmas party. Better than a normal party, it aims to blow the doors off. Last Christmas we had a 15-piece ska band – and one of those photo booths with hats and clothes and outfits you dress up in. Everyone looked like an idiot – most of all me!

It summed up our business – we’re all in it together, we all have a good time together, and we’re all gonna hit our targets together. It’s a long way from being an awkward sit-down meal with the scary boss.

You must find that some people aren’t receptive to this kind of thing …

Those are quite easy to solve – when people aren’t receptive, we’ve recruited the wrong type of person. We tend not to have confrontation – personally, I don’t like confrontation, so we make sure we spend as much time as possible recruiting the right kind of Loafers.

We’ll know within in a week or two if someone isn’t going to work out, and it’s not a case of “you’re not right, you’re out,” but “we’re not sure we’re the right company for you – what do you think?” In our experience, 99 times out of 100, the feeling is reciprocated. So we haven’t had any people leaving with any bad blood.

When we’ve gone for people who just aren’t Loafy – they tick all the boxes, they’ve got the right experience and they’re commercially savvy, but they just don’t quite get the Loaf ethos of how to mix with people, how to be laid back but sharp – we’ve corrected the mistake very quickly. I remember reading something about Richard Branson who said the same thing – to make sure you get the right kind of people at the outset, to save yourself trouble down the line.

The furniture industry is very similar to the food industry, because the journey is the same. You’re relying on a lot of moving parts – whether it’s your suppliers, your sales team, distribution company, it’s the same way a restaurant works. If one thing goes wrong along the way, everything goes wrong and your customers aren’t happy.

Where do you recruit from?

I’m always on the lookout for good people. An example of that is my ex-girlfriend’s friend – she worked in a private members’ club. I heard that she was one of the most amazing people she’d ever seen working, so I called her up, got her in, and she’s now our general manager, and has been for five years – she’s amazing.

I appointed my old head of accounts from my old business, a Russian lady called Natalya – I sold my old business a few years ago, and I called her up just after I started this business to get her in to look after our accounts. So really, they can come from anywhere.

We’re now getting more and more CVs and applications sent in via the vacancies section on our website. We put that up about a year ago. There’s a stupid video on there with us being lunatics in the office, dressed up in bear oufits and things. We got three times the number of applications coming in just because we added that!

How do you think outsiders see you?

When we have fabric reps coming in to see us, or when people generally come in for meetings, they always talk about the energy in our business – they say it feels like they’re in an advertising agency or something, it’s got a laid-back energy about it. I don’t understand why other companies aren’t all the same, why they don’t have fun.

The best advice I can give employers is to be an idiot, and encourage others to do the same – it makes people more honest and open.

Back in February I was bemoaning the fact that I forgot to get my wife a Valentine’s card, and one of my office managers said “right, tomorrow we’re going to have to make an effort.” We emailed the whole company to tell them that everyone had to wear red on the day. There were a few lemons that didn’t, and they know who they were – being an idiot and having fun is the most important thing you can do.

This interview was published in the May issue of Furniture News magazine.