Highly Effective CEOs Replicate Strategy, Not Tactics

It comes as no surprise that major retailers, already reeling from the move to internet shopping, are now faced with unrelenting pressure to stay in business. Forced to close their doors due to the COVID-19 crisis, well known retailers are challenged as they try to re-work their business models in real time.

One such company trying to stay in the game is JCPenney. The failed experiment of Ron Johnson as CEO of Penney’s has been well chronicled. Fortune magazine ran an article about this shortly after his departure titled “How to Fail in Business While Really, Really Trying.” This was not so much a case of corporate hubris or even CEO ego run amuck. Rather, it demonstrated how difficult business transformation can be (even for smart people).

Ron Johnson made his mark as the head of Apple’s retail division and was widely hailed as a genius for making his vision of Apple Stores a reality. If you’ve ever visited an Apple store (and who hasn’t?) you know they continue to be busy, buzzing, bustling (and highly profitable) places. Innovative in design, lighting, layout, and staffing (a Genius Bar? Really??), there is nothing traditional, stodgy, or boring about an Apple retail store. The same could not be said for JCPenney. In fact, the big retailer had plateaued and was going nowhere fast. Who better to transform this traditional, boring, also-ran into a lively, exciting youthful destination?

Clearly, Johnson had his own ideas and his own ways of doing things. And he did what many in his position do when beginning a new challenge: He surrounded himself with his own people. The holdover JCPenney team members were made to feel as though they were outsiders, especially when they challenged some of Johnson’s ideas. No more coupons or sales? JCPenney customers had come to rely on them, and they scheduled their visits to the store to align with the timing of these special offers. The offers stopped coming-and so did the customers.

There were enough JCPenney holdovers who lamented the fact that rather than selling “cool technology to 20-somethings” Penney was selling “dresses and flannel sheets to women in their 50’s.” Clearly the same retailing tactics that fueled the growth of Apple Stores could not work at JCPenney. But there’s a bit more to the story.

The fact that is that no one really knows whether Ron Johnson had it right or not and that may be the biggest tragedy of the JCPenney story. That the brand needed a transformation and change was not in dispute. Rather, it was the rate and pace of that change that proved Johnson’s undoing. His tactics alienated existing customers long before the “new” customers arrived. That’s what makes business transformation so challenging. We need to hold on to what we have now, while simultaneously creating something new and better.

As we emerge from the COVID-19 crisis, businesses everywhere will be challenged trying to return to “normal.” Most agree it will be “different” for a while, but what will that difference look like and how long will it last? The best approach may well be to set aside the tactics that worked before and begin instead with a sound strategy for creating a new and better (and yes, different) approach to business.