Sunday, May 26, 2013

The Failure of Hero Worship Thinking at JC Penney

Where J.C. Penney And Ron Johnson Went Wrong
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.
I think 2 fatal mistakes were made.  First paying Johnson and 3 executives $170 million shows a failure to understand management, leadership and organizations.  It values up hero worship and huge risk taking instead of valuing the deep changes needed to improve a company such as JC Penny.

Lots of boards share this hero worship vision of organizations.  Largely pushed by such a hero worship vision they then took huge gambles instead of experimenting learning and adjusting, experimenting some more and adjusting and only once the evidence supported the wisdom of adopting changes system wide taking that step.  Using the PDSA improvement cycle would have made the experiments much less damaging and hopefully a success strategy (certainly they didn't find one) could have been found.

I have written previously that the CEO is only one person. Ron Johnson showed 4 people (that paid themselves $170 million) are not enough either. The whole attitude such people have about the appropriateness of hero worship and disrespect for the vast majority or workers sets up likely failure.

Related: Netflix is Well Managed, People are Overreacting to Short Term Issues - The Market Discounts Proven Company Leadership Far Too Quickly - How Could They Know?

No comments: