After a full on rebranding, new strategic direction, and massive organizational changes designed to reinvent the retailer and improve profits – J.C. Penney suffered a dismal 1st quarter. A lot exists for shareholders and stakeholders to be frustrated about – and much of it relates to organizational development and leadership (or poor leadership).
CEO Ron Johnson did have a vision – to get rid of the nonstop product promotions at the store and move to three kinds of prices (everyday, monthly specials, and clearance). He announced new designer partnerships and a new spokeswoman and advertising star, Ellen DeGeneres. He also introduced a new logo, and new color-saturated advertisements that barely mention price. Within four years, he said, the stores would be completely redone, each divided into about 100 small boutiques with a service center that he called “town square.” Ron has vision – but what he lacks is thoughtful and holistic understanding and execution.
*Update: As of June 18th, 2012 J. C. Penney Company, Inc. ousted its JCPenney brand president, Michael Francis, who oversaw the retailer’s merchandising and marketing operations, with a terse statement that “We thank Michael for his hard work at jcpenney and wish him the best in his future endeavors.”
Before leaders begin making organizational changes, no matter what successful past experience at other organizations may lead them to believe – it is necessary to collect current organizational data – data from stakeholders, data from employees, and most importantly, data from customers. Change can’t be rushed. It is said by some that a transformational change such as the one Penney’s is undertaking can take an average of 7 years – yup, you heard that correctly. Change isn’t easy folks, and doing it right takes time – just look at Pier 1.
So – just a few things (I have quite a list but I’ll spare all the details for now as I wouldn’t want to sound like a preachy CEO) Mr. Johnson should have done prior to jumping on the “turnaround CEO” bandwagon:
“Leadership is the art of getting someone else to do something you want done because he wants to do it.”
- Dwight Eisenhower
Personal example – I bought a massage power recliner from J.C. Penney. When I first saw it listed online it was one price, when I went into the store to actually see it in person it was a different price. When I didn’t commit that day the sales associate gave me his card. I called him back a week or so later and the chair was miraculously over $150 cheaper with free shipping – if I came in to purchase that week. The sales associate knew the pricing system, he knew the price would be lowered, and he knew he could offer me free shipping as the price would probably be lowered yet again in a few more days. I felt like I got a good deal, I got my chair same day, and he made his commission of a higher amount. I was a happy customer and he was a satisfied sales associate.
If changes in process and procedures are going to occur that impact the day to day of how employees perform their jobs, then not only do you want to communicate those changes and ask for feedback – you also want to make sure you provide any needed training so they can succeed. Otherwise performance suffers, retention suffers, customer service declines, and shareholders don’t end up happy.
I do enjoy the new J.C. Penney commercials, but I’d enjoy shopping there a lot more if I knew the retailer had honest, transparent, committed, accountable leadership who elicited and acted on customer, stakeholder and employee feedback – but hey, that’s just me.
“Lead and inspire people. Don’t try to manage and manipulate people. Inventories can be managed but people must be led.”
- Ross Perot
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