If you’re interested in hanging out at the intersection of innovation and retail, you could do worse than checking in with Ron Johnson, a man who no doubt would rather be known for his work on the Apple Store than his work at JCPenney.
During a morning fireside chat at Shoptalk, Johnson talked about a lot — his one-year-old company, his belief in “personal commerce” as a new platform and “the magic of experience.” But it was when the conversation came around to JCPenney, arguably not the sexiest topic, that Johnson was at his most revealing.
But really, it was JCPenney and his struggles there that make Johnson one of the most compelling stories in retail. He’s now on to his next, new thing, a company called Enjoy, that he says brings the brick-and-mortar notion of customer service to the e-commerce wheelhouse of convenience and logistics.
But back to JCPenney.
“It turned out it was a really bad decision for everybody,” Johnson said of his decision to step down as Apple’s retail head to become the CEO of the struggling department store. “I was a round thing in a square peg. I’m a creative, innovative, look-forward, change-the-world kind of thinker. And that isn’t who Penneys was. So to go insert yourself in a place that’s really at odds with your DNA; that’s not a good idea.”
Johnson’s take, clearly, was that JCPenney was not ready to make the changes it needed to make to complete his vision of a hipper, more relevant JCPenney. Whether his analysis is correct, or not, his discussion of it is a Silicon Valley-centric way to look at failure. You learn and you move on.
I’ve written more than once about retailers’ need to act more like startup companies — to innovate and iterate fast. To keep the ideas that work and shake off failure, after learning the lessons that failure provides.
I was generally talking about trying new technology and innovations, but Johnson’s story, of trying new strategies and even trying new jobs, provides a high-profile chance to explore the value of failure.
First his plan: Johnson came into JCPenney in 2011 with a goal of attracting more younger shoppers to the somewhat dowdy retail chain. His idea was to offer more exciting products and to stop the practice of offering the kind of deep discounts on clothing that appealed to bargain hunters.
Short story: It was a disaster.
But on stage at Shoptalk, Johnson indicated that it wasn’t really the plan that was the problem. In fact, he said, given time, it most likely would have succeeded. The problem was that Johnson did not align his mission with the team he had in place.
“I was told people wanted change, but the truth is nobody wanted to change,” he said of his new co-workers, while channeling their attitude. “They were on top of the world. Why did they need to change?”
At that point, Johnson said, a CEO can ease into transformation or try to jump start it. He went with the jump start.
“Truth be told, we went way too fast,” he said. Employees weren’t ready. Customers weren’t ready. Board members weren’t ready.
And, maybe to his credit, he wasn’t ready to replace employees resistant to change with those who would embrace it.
“I didn’t want to change people’s lives who had worked there forever.”
And so, what did he learn from the JCPenney debacle?
“Nothing good ever happened overnight,” he said.
Even the Apple Store, which is frequently listed as one of the highest-revenue retailers on a square-foot basis, was no overnight success. The idea was initially ridiculed. And, Johnson said, the early stores were not profitable for years.
And while Johnson didn’t say so, it appeared he learned another lesson from his JCPenney experience: Life allows second, third, and maybe fourth, acts.
He launched Enjoy a year ago. It’s gotten a lot of buzz and, more importantly, a lot of venture funding.
“If you’re an investor, you want somebody who’s failed, because they don’t like the taste of it,” Johnson said. Investors factored in his successes when looking at all that went wrong at JCPenney, he said.
“I wouldn’t recommend that you go out and fail and then raise money,” he joked.
He is now running a company with a new idea — one that might catch on or might not. He’s doing it at a time when retail is experiencing tremendous disruption that can be both invigorating and terrifying.
The Shoptalk agenda itself is one gauge of just how topsy-turvy the retail world is. Speakers and attendees are talking about new ways for faster delivery, new ways to order online, new subscription models, new payment methods. And in steps Johnson, with a new way to please customers.
Failing is never easy. It’s no fun. And Johnson said he found it very humbling. But, he added, his failure also led him to Enjoy.
“And if I hadn’t done that, I don’t think I’d be doing what I’m doing now,” Johnson told the gathered crowd. “I love what I’m doing now.”
And why not? It’s a chance to be known not as the guy who failed at JCPenney, but as the guy who launched Enjoy.
Mike Cassidy is BloomReach’s storyteller. Contact him at firstname.lastname@example.org. Follow him on Twitter at @mikecassidy.