The most experienced and effective marketing professionals will usually agree that keeping the client in the press and on the public’s mind is beneficial to promoting brand identity, especially in an institutional fashion. Frequent articles and stories can help grow a brands identity across marketing segments and expose the brand to new potential customers who may be inspired by the information and may be motivated to test, what is to them, an unfamiliar brand. In the case of good news, it can create excitement and motivation, after all we all love being part of a good success story. But when it comes to polishing the brand, attracting new converts and growing a business; too much bad news can be really, really bad news for a struggling business!
News continues to trickle out of the troubled retailer, J.C. Penney. It’s bad news for its business partners and investors, bad news for thousands of its associates, and particularly bad news for its loyal customers.
We all look to our business leaders, the CEO’s, the Presidents, the Board Directors and the COO’s for lessons and inspiration, unfortunately as is the case in life’s many best learned lessons, we often learn the most profound lessons from our failures. The leadership at J.C. Penny has contributed more than its fair share of lessons over the past two years.
The Board of Directors of J.C. Penney Company, Inc. [NYSE: JCP], recently announced that Myron E. (Mike) Ullman, III has rejoined the Company as Chief Executive Officer, effective immediately. He has also been elected to the Board of Directors. Mr. Ullman is a highly accomplished retail industry executive, who served as CEO of J.C. Penney until late 2011. He succeeds Ron Johnson, who is stepping down and leaving the Company.
This most recent departure of leadership makes J.C. Penny America’s most cautionary tale and follows a plot line of mass exodus of loyal customers and a 25% reduction in company revenues. Penney lost almost a billion dollars, half a billion of it in the final quarter alone. The company’s stock price, which jumped twenty-four percent after Johnson announced his plans, has since fallen almost sixty percent and twenty-one thousand jobs have been lost.
Upon his departure, Johnson has become the target of unrelenting criticism. “There is nothing good to say about what he’s done,” Mark Cohen, a former C.E.O. of Sears Canada, who is now a professor at Columbia, “Penney had been run into a ditch when he took it over. But, rather than getting it back on the road, he’s essentially set it on fire. Johnson, and his previous compatriots in failed leadership, seemed determined on implementing wide sweeping, revolutionary marketing strategies that appeared to be destined from the outset to miss the target when it came to the largest segment of its customer base. The new revolutionary strategy’s only success was to frustrate and confuse the company’s loyal fans and left everyone to ponder three questions. Where did their familiar retailer go? Who were they trying to become? And where were they going?
Turning a major company away from its past identity and moving it forward with a strategy that brings a sleepy and complacent giant into the new business market reality is difficult, really difficult. But large brand remodeling and revolutionary, untested marketing strategies most often bring about decline and failure not success. Michael Roberto, a management professor at Bryant University, put it this way. “Small wins help you build support both internally and externally, and they make it easier for people to buy in.”
Penney’s board no doubt believed that Johnson’s record with former employers, Target and Apple, all but guaranteed that he’d succeed at J.C. Penney. But this perception probably reflects what psychologists call “the fundamental attribution error”, our tendency to ignore context and attribute an individual’s success or failure solely to inherent qualities. Ron Johnson has become an example of what Warren Buffet believes, “When a manager with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.” At the onset, Johnson brought an Apple-minded focus on reinventing business innovations whilst losing site of the core fundamentals of the business. Perhaps the most profound lesson from Ron Johnson’s missteps can be attributed solely to J.C. Penny’s Board for its decision to select Johnson for the leadership role to begin with.
While Penney can’t erase the last 14-months, there is inherent value in the lessons learned. Vision is not always a recipe for success. As marketers, we keep our thumb on the pulse of what is trending in all social, local, and mobile. Our ideas are fueled by advancements in technology. However, success is a result of systematically assessing the wants, needs, motivations, and expectations of those we serve not those that lead. Penney needs to get back to the fundamentals of its core business and the customers it serves.