retail news in context, analysis with attitude

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Hi, I'm Kevin Coupe. This is FaceTime with the Content Guy.

I know I seem to be obsessing about this story a little bit, but this morning I'd like to once again talk about the case of Ron Johnson, the just deposed CEO of JC Penney, and come at it from a different angle.

At this point, the outlines of the story are familiar. Ron Johnson, celebrated for his role in creating the Apple Store, was hired by JC Penney to reinvent the iconic but troubled retail chain, and then was fired 17 months later because his efforts - especially going from a promotion/coupon pricing approach to EDLP - resulted in lower sales, massive losses and diminished traffic. They have replaced him with his predecessor, Myron E. Ullman III - demonstrating, in my not-so-humble opinion, some weird combination of desperation and lack of vision.

Fast Company is out with an interesting look at Johnson's tenure, essentially using his own words, uttered in an interview back in January 2012, to illustrate how and why things may have gone so badly off the rails.

Good piece....and you can read the whole thing here.

There's one particular passage in the interview that I think illustrates most clearly the problems that Johnson faced, and that a lot of retailers face. Here it is:

“My favorite three words in the English language are 'In the beginning' and that’s how I view this. This is like we’re a big $18 billion startup. And we’re going to act like a startup in how we make decisions.

“We can move as fast as we’re willing to and we’re going to win shop by shop, month by month. So every month there will be something new at Penny’s and there will be new shops coming in every month. And eventually we’ll have 100 shops and we’ll just keep moving.”

Well, as it happens, not so much.

But as Fast Company points out, and I would agree, JC Penney was not a startup. It was a big company with a long history, lots of existing problems, and both legacy and cultural issues that could not be turned off with a magic wand...even one made by Apple.

Funny enough, I was talking to my brother Tim about this the other day. He's worked for big and small technology companies, until he decided to leave all that behind, be a stay-at-home dad and then become a teacher. He was saying that in his experience, having c clean sheet of paper to start with is one of the most valuable things a company can have. But, a lot of companies convince themselves that they can have one, when they don't and can't.

Isn't that the problem, in a lot of ways, with the US Postal Service? They are little but a mass of legacy issues, and it is almost impossible to deal with those issues and create a post office that is positioned correctly for the 21st century.

To my mind, that is one of the big problems that Walmart will have in driving online sales. The company is genetically engineered to create antibodies that will fight any disease seen as a threat to its supercenter business. Inevitably, its online business will have an impact on its brick and mortar business .... those sales can't just come from the other guys ... and so Walmart at some point may resemble Steve Martin in All of Me, wrestling with the spirit of Lily Tomlin that has entered his body.

Amazon, at least now, seems to be the ultimate clean sheet culture. It encourages disruptions from within because disruptions from the outside inevitably come from heightened competition.

This is all very, very hard. I don't want to minimize it, not at all. Not impossible, but hugely difficult. JC Penney is only the most recent and most graphic example of how an internal cultural war can help tear a company apart.

But here's the reality. As we move deeper into the 21st century, change happens too fast ... consumer needs evolve too quickly ... and the next technology revolution may be just around the corner. The legacy that companies and company leaders need to to consider is how they adapted, and how that allowed them to survive and, hopefully, thrive.

That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

KC's View: