CEO Ron Johnson has been hammered in recent weeks by both the financial press and public markets pundits.
Sales down, share price down, low cash reserves. A common view is that time is running out.
But I’d like to present a different view. Ron Johnson is doing exactly what a CEO should be doing when put in charge of a moribund company.
Taking regular, calculated risks.
A case in point is a new JC Penney concept store that is within days of opening in West Hollywood, just near my home.
This is the latest in a fast growing group of cool, modern, vibrant, relatively small stores co- branded JCP and Joe Fresh, the successful Canadian retailer.
Take a look at the DJ booth in the centre of the store – this is not your usual retail outlet.
On huge orange walls the store’s manifesto is declared. The store exudes energy and youthful panache – and it hasn’t even opened yet.
What’s brilliant about Ron Johnson taking his joint venture with Joe Fresh out of JC Penney and onto the streets is twofold:
1. If it works he will be able to create a huge nationwide chain of boutiques, separate from the traditional department stores.
2. He is creating massive advertisements for the new JC Penney, altering perceptions of the previously staid department store group. Johnson figures if we won’t come to his stores, he’ll bring the stores to us.
Will it work? Who knows. But it’s yet another example of a gutsy CEO doing whatever he can to change the game, break the rules, move things forward.
Small, incremental change will not save department stores from an aging clientele and the ever mounting online retail attacks. Dramatic action is necessary.
Many things Johnson has tried may not have worked as well as he hoped (getting rid of sales, radical pricing policies to name but two). But plenty, like his new department store revamps are substantially lifting revenues. (Last quarter’s figures show the new store layout brings in $269 per square foot versus $134 for the old design.)
Rather than whine on the sidelines that the JC Penney turnaround is too slow or strategically unsound, we should all be cheering this guy for having the gumption to attempt to re-invent an entire business model.
We should also look at our own businesses and ask ourselves whether we should be doing a Ron Johnson on our company, rather than continuing with business as usual as the world changes rapidly around us.
As Britain’s special forces commandos, the Special Air Service, like to say, ‘Who Dares Wins’. Many of the world’s companies would do a lot better if they had CEO’s like Ron Johnson at the helm, shaking things up.