Tuesday, April 16, 2013
The business news story of the month is the untimely (some would say overdue) exit of Ron Johnson as CEO of J.C. Penney. No need to rehash all the details here, other than to say neither the company nor its customers were ready for the sweeping change Johnson initiated (more on that in an upcoming post).
Our point here is simply to say it’s not surprising that a CEO who initiates (ignites?) massive internal change from afar is going to run into trouble. Mr. Johnson commuted to his job at JCP headquarters in Plano, Texas from his home in California. Regardless of the reasons why, it doesn’t look good to the professionals whose beliefs were being challenged, ways of doing things were being disrupted, and in some cases lives were being upended–people Johnson was counting on to carry out his vision.
This blog has made the point many times that culture is strategy. Regardless of the merits of Mr. Johnson’s strategy (and there were many), neglecting the impact of not living among the affected was, in retrospect, naive. Lack of internal alignment is the most crippling factor among struggling companies, according to our reams of research and hard-won experience. Get that wrong and even the best-laid plans are likely doomed.