Monday, April 22, 2013

Anatomy of a Culture Clash

Without being on the inside, it's impossible to know for sure what went wrong for Ron Johnson at JC Penney, but let's make a few educated guesses.

First, he must have suffered culture shock.

Johnson apparently found at JCP a complacent corporate organization, with a strong culture of goofing off.  According to one report, "There were 4,800 employees at the Plano, TX headquarters in January 2012, and in one month they had watched five million YouTube videos during work hours."

The Apple corporate culture from which Johnson came was described by Ariel Maislos, former CEO of Israel’s Anobit.  Maislos worked for the company for about a year, after Apple acquired Anobit in December of 2011.  “At Apple,” said Maislos, “you have to run ahead just to stay in place, and there are very high expectations of everyone.”

Complacent vs. driven: Kaboom!

Second, there was a culture clash.

In the retail stores JCP’s Associates, according to company philosophy posted on the internet, were trained and empowered to make customers their #1 priority; “Customer FIRST,” the company called it.  But let’s face it, JCP customers were bargain hunters.  They came in with their newspaper sale ads and coupons and they knew exactly what they were looking for.  I can imagine that the key tasks of the store Associate were to help the customer find the sought-after merchandise and then to ring the cash register.

Ron Johnson seemed to think he could boost JCP sales and profits by recreating the Apple store “ultimate customer experience.”  Apple’s retail job postings describe a job very different from the one JCP’s store Associates are likely to have been performing.  “As Specialist, you’re the essence of a customer’s experience at the Apple Retail Store.  You enrich people’s lives through meaningful dialogue about the coolest products on earth.  You earn trust by recommending solutions that do more than meet people’s need – they inspire their hopes and dreams.”  A bit loftier role than simply making the cash register go cha-ching.

Catering to bargain hunters vs. creating the customer experience: Kaboom!

Finally, there was an operating style clash.

Part of the JCP credo was teamwork: “We win together through leadership, collaboration, open and honest communication, and respect.”  Associates described it as a good place to work with friendly coworkers and management.

Johnson brought with him the secrecy for which Apple’s culture is famous.  At JCP, upper management characterized him as “cagey and secretive.”  Under Johnson it's been reported there were no protocols or processes, no memos or written directives and oral communication without much detail, no insights into store operations and changes, no opportunity for anyone to ask questions.  This operating style is hardly conducive to the friendliness and trust on which the JCP culture seems to have been built.

Open and collaborative vs. secretive and cagey: Kaboom!

Let us hear from you!  What do you think doomed Ron Johnson?

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