What went wrong?


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ronjohnsonOpinions abound as to what went wrong at J.C. Penny. Chief Executive posted an article summarizing a Time Magazine story on the “5 Critical Errors That Triggered Ron Johnson’s Removal at J.C. Penny”. I fundamentally disagree with almost that entire article. It is just wrong.

If Penny’s wanted a more efficient Penny’s they should have hired someone else. The Board knew they were hiring someone to create a “new” Penny’s. If they did not want that, they should have hired someone else.

To believe that the new Penny’s was not going to alienate some existing Penny’s customers by the change is unbelievable. The rate at which you alienate existing customers is likely to exceed the rate at which you attract new ones, therefore sales will drop. For anyone to expect otherwise is ignorant.

Therefore, the Board’s mistake was hiring someone to reinvent Penny’s and not understanding the likely drop in sales. However, to suggest that the new Penny’s would not have been successful is invalid as it was never given a reasonable chance to succeed, and at least it would have held a position that no other store holds as opposed to being a “me too.”

As to Johnson, not moving or spending lots of time with the team. Shame on him, unless he was spending time in stores, which would have been the best move.


Republished with author's permission from original post.

Mitchell Goozé
Mitchell Goozé is the president and founder of Customer Manufacturing Group. His broad scope of business experience ranges from operations management in established firms, to start-up and turn-around situations and mergers. A seasoned general manager, he has headed divisions of large corporations and been CEO of independent firms, always focusing the company strategy on the most important person in business . . . the customer.


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