DateApril 10, 2013
CategoryBusiness Excellence, CEO, Customer Service, Goals, Leadership, Leadership Development, Organization, Renaissance Executive Forums, Success, Top Executive
Five Things we can learn about his journey.
Ron Johnson was fired from his role as CEO of JC Penney in 2013 after a failed attempted to reinvent JC Penney with a shiny new image and offering. We all watched his journey over the last 17 months as his efforts sadly fell flat. This quote from the New Yorker says it all; “When Ron Johnson took over JC Penney, the company had been run into a ditch. But, rather than getting it back on the road, he’s essentially set it on fire.” Ouch!
But is his criticism justified? Is he a bad CEO? Are you a better CEO than he is? What can we learn from Mr. Johnson’s experience that can save us the same fate? Here are FIVE things we as leaders can learn from this example.
It’s Not Enough to be a great leader
Ron Johnson is a masterful leader who had seen amazing success with Target and Apple’s retail programs. He has years of experience doing the very thing he was hired for, however, even the best leaders make mistakes. It’s how you handle the mistakes that make the difference between an embarrassing moment or the possible demise of your company.
Mr. Johnson did a lot of things right, like reducing the levels of management and taking the sales people off commission. He also did a lot of things wrong, like not truly understanding the customer BEFORE you take action, and then holding onto a failed plan too long. Do your research up front and test it out before you jump in with both feet. If things do not go as you had hoped, set up timelines and milestones that will help you decide if a course correction is required.
Great Ideas need to take off FAST
Some of the new ideas for merchandise that Mr. Johnson and his team brought in are starting to hit stores now, such as Joe Fresh clothing and Jonathan Adler housewares, but it was too little too late to save his job. The concept of moving away from coupons and sales may have worked over time, but it proved to be too hard a sell and time ran out.
Fresh ideas fade fast so have all the details ready before you start, so your team and your market don’t lose focus or interest before you get it all rolled out.
Be a Good Listener
If indeed Mr. Johnson spent time listening to the market first, he obviously misunderstood what they were telling him. The consumers who were loyal to JCP liked the promotions and sales, a mindset that their competitors like Kohls do so very well. His decision to move away from this model alienate the few loyal customers they had. He attempted to “reform” customers that did not want change, and they just took their business elsewhere.
Your Sales and Customer Service team will know the most about the market and their needs. Start with them and make sure you don’t have an agenda of your own that you are trying to push. Remember, you are not the customer, the customer is the customer, so focus on what they want and you will win them over.
Create a Clear and Compelling Vision
The JC Penney team did NOT completely buy into the concept and there was dysfunction and confusion from the top to the bottom. People grew tired of the layoffs, the leadership reductions and departures, and the constant negative press. Often it seemed that NO ONE really knew where they were going or how to get there.
Mr. Johnson had a clear vision at the beginning, but it was not compelling enough to get the teams and the customers to buy into it. You need both Clear and Compelling vision that everyone can follow. If you do have to adjust midstream, cast a clear and compelling new vision that enables others to follow you. Remember, without followers, you are just the lone nut on the hill.
Respond to the Market or die
Sales began to drop in early 2012 but it took Johnson until early 2013 to finally decide they should return to the old model of pricing. Way back in June of 2012, Johnson realized he had misjudged the market when he said in an interview with Business Week: “I thought people were just tired of coupons and all this stuff. The reality is all of the couponing we did, there were a certain part of the customers that loved that. They gravitated to stores that competed that way. So our core customer, I think, was much more dependent and enjoyed coupons more than I understood.”
Be decisive and move quickly. I’m not suggesting you change with every whim of the market, but when you see something is not going right, be the kind of leader that acts quickly to let the team know you have a plan and keep the market engaged.
YOU are a Great Leader
I think most leaders already know what they need to do, they just struggle to get it done. Ron Johnson is an experienced, skilled, and dynamic CEO who failed to make enough right decisions to succeed. If you continually fall short of your goals and expectations, it would be insane to keep doing the same thing and expecting a different outcome. The problem many leaders face is they have no one to turn to for honest and candid input into your leadership decisions. They struggle to lead a team with ever-evolving issues that pop up regardless of the best planning. They grow weary of the battle and the struggle to find creative ways to rise above it all.
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