Where J.C. Penney And Ron Johnson Went Wrong

May 20, 2013 / Mike Myatt /

It’s not hard to lead talented people with an aligned vision who fall under the umbrella of an iconic brand that has a cult-like consumer following. This describes Ron Johnson’s role as head of Apple’s retail operation prior to assuming the CEO role at J.C. Penney.

Johnson was fired recently by JCP as his efforts to rebrand and turnaround the struggling retailer failed to get traction. In June of 2012 I predicted Johnson’s failure as I warned of cookie cutter leadership practices in a Forbes column entitled Culture: Don’t Copy – Create.

While the aforementioned Forbes column offers an insight into why the turnaround failed under Johnson’s leadership, it points to a much bigger issue – another example of a board of directors tapping the wrong CEO for the job. Penney’s opted for star power, when what they should have done was hire a CEO with proven turnaround experience. Penney’s didn’t need cool – they needed someone who understood the JCP culture, the JCP consumer, and the JCP business, all of which varied radically from Johnson’s Apple experience.

Penney’s board opted for a silver bullet that didn’t exist. Rather than do the hard work and heavy lifting necessary to turnaround a brand that had been mismanaged for years, they wanted a quick fix – they bought smoke and mirrors rather than sound business practice. You can’t lead with cool – cool must be earned. The label of cool comes as a result of great business decisions and outstanding leadership.

While JCP was broken long before Johnson took the helm, the retailer’s performance clearly declined under his leadership. The thing is, it didn’t have to happen, and oddly enough, I blame Penney’s board and their search firm just as much as Johnson. There were a dozen candidates who would have been a better selection, but they just had a demonstrable track of turning around businesses – they weren’t considered cool. Here’s the thing – had they made the right choice, for the right reasons, everyone would be looking cool right now. Succession matters – especially CEO successions.

Let me give credit where credit is due – Johnson didn’t do everything wrong, in fact, he made some long overdue changes. That said, he misfired on the big ones of culture, business model and understanding the consumer. Most importantly, he failed to produce results. A lesson for all would-be turnaround CEOs.

Thoughts?