Consequences of Unmanaged Change: Ron Johnson and JCPenney

The world of Apple may be one of big ideas and making change happen, but as Ron Johnson has discovered, J.C. Penney isn’t Apple. Where Apple sells unique products, or at least products with a unique aura, Penney’s is one of a large number of stores selling similar products with similar brands to similar customers.  Going into an Apple store is about seeing what is the newest, coolest, stuff. Going into a JCPenney is about comfort. My 94-year old mother enjoys going to Penney’s because she’s always gone to Penney’s. She would be frightened (and also frightening) in an Apple store.

Struggling to make change work

I’m guessing that it was the “Apple Swagger” that has put Mr. Johnson in such a difficult spot these days. As a new leader in a new environment, his biggest mistake was in believing that he had all of the answers from the beginning. He recognized losses in one-off discounts (such as coupons), felt that solid pricing could replace traditional sales, and created what he believed to be “cool” branded boutiques within the stores.

Unfortunately, JCPenney isn’t about “cool.” To go from predictable to cool takes time, strategy, patience and change management. While the new CEO has shown a willingness to take risks (laudable), he has not shown the kind of understanding and consideration that makes change effectively happen. As a result, he has thrown all ideas into production at the same time and on Friday had to report a net-loss of $147 million as same-store sales plunged over 21%.

Obviously, J.C. Penney needs badly to develop a strategy that works in the 21st century. And just as obviously, when Mr. Johnson took the reins from former CEO Myron Ullman, there was an urgency to make change happen. Nonetheless, the stalwart department store is an aircraft carrier, not a speed boat, so whether or not Johnson is ultimately successful, there are some lessons worth considering for any manager transitioning into a new role:

  1. Don’t believe that you have all the answers. While you’re perspectives might be accurate and you may recognize what you believe to be obvious issues, it is unlikely that your changes will be effective if you don’t take the time to really listen to those who have been living with the problems. Whatever your experience has been to this point, it is unlikely that it can simply be transferred into an expertise in your new situation. Recognize your limitations and seek out input from your team.
  2. Prioritize. Remember that things did not get where they are today because of yesterday. They likely evolved over a long period of time. While you may have a mandate to make change happen, you simply cannot be successful trying to make it all happen at once. When you try, customers and employees become confused because they lose sight of any landmark of which they are familiar. Physics pioneer John Wheeler once said, “Time is what prevents everything from happening at once.” Plan your time quickly, but let things unfold in a way that people can understand.
  3. Don’t let urgency become chaos. In most cases, the people you want to change have been doing what they’re doing with absolute integrity of purpose. When you come into the situation and start changing everything, you not only confuse people but you are probably behaving in a way that communicates you think they are idiots. Neither your employees nor at a high level, your investors, want to feel that things are out of control. The mature leader finds a way to fire up people about change but still provide the sense of security and control that is necessary to allow them to focus on what needs to be done.

Ron Johnson may ultimately be successful in making JCPenney a contemporary leader in the department store arena. The question isn’t whether or not his changes are needed, but rather, can the company afford to pay the consequences of unmanaged change. While your situation may not be as large-scale as that of Mr. Johnson, the question applies to your efforts as well.

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