I can’t get Ron Johnson out of my mind. Until recently, he was CEO of J.C. Penny.
He came from Apple where he’d run the retail stores, successfully. Elmer Fudd could have run Apple’s retail operation.
Johnson was a disaster at JCP. I’ve never seen anything quite like it. He hired a bunch of whizzes – the kind of people who jetted home from JCP’s Texas HQ to the coasts on weekends – and began to change the way the chain does business, completely.
First, he got rid of discounts and couponing, then he decided to turn the stores into mini-malls, each a collection of boutiques.
Along the way, he changed the company’s TV commercials to look and sound exactly like Target commercials. Perhaps good for Target, undoubtedly a waste for JCP.
The entire fiasco will make a great book some day but for now it’s enough to know that as Johnson’s changes took effect JCP’s stock tumbled, sales fell off a cliff and the already struggling retailer lost a quick billion dollars.
What’s truly remarkable is that Johnson made the sweeping changes without testing them first! He could have. Testing is easy in these here United States. You can screw up, say, Pennsylvania and still have 49 more states plus DC to work with.
Johnson had at least heard of testing. When a minion asked if they’d be testing the new ideas before launching them nationwide, he snapped, “We didn’t test at Apple”. Anyone who thinks that what happens at Apple bears any relevance to what happens at a lower middle department store is not paying attention.
Bill Ackman, a hedge fund honcho and member of the JCP Board, had championed Johnson. So had Johnson’s immediate predecessor, retail legend Allen Questrom. They changed their minds after 18 months of destruction.
In early April, Ackman said “One of the big mistakes was perhaps too much change too quickly without adequate testing on what the impact would be.”
Around the same time, Questrom said, in an interview with the Dallas Morning News about Johnson’s in-store boutiques idea: “I think they should find out if it works first without putting the whole company at risk.”
Scientists, direct marketers and little kids who stick their toes into swimming pools know the value of testing. Johnson didn’t, or he forgot, or hubris caused him to ignore the whole idea. So he damn near crashed the company.
Now comes something astonishing. We’re hearing about marketers defending Johnson against the philistines who oppose change. We’re afraid of change. We’re dinosaurs.
We love change and we embrace it eagerly when it has a good chance to make things better. And we test to find out. Then we proceed cautiously, rolling out slowly as we test and fine-tune the program every day. We don’t bet the whole company on someone’s guess!
The mechanics of change: First ask all kinds of questions that lead to the essential question: “Does this new idea work, Yes or No?” Then test to find out for sure. When the answer is yes, you’re off to the races. When it’s no, you head back to the drawing board.
Change for change’s sake is exciting, adventurous, cutting edge and it’s for amateurs.