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Inside the J.C. Penney Overhaul


The Wall Street Journal has just published an in-depth analysis of Ron Johnson's time at J.C. Penney. The article paints a picture of someone intent on changing the department store chain's existing culture and taking it into the future. It also implies that Mr. Johnson may have been too attached to the idea of turning J.C. Penney into another Apple, despite the vast differences between the two companies, and may not have been exactly open to constructive feedback.

For example:

With sales figures looking bleak, directors tried to encourage Mr. Johnson to test parts of his strategy that had yet to be rolled out. At one meeting during the summer, board member Burl Osborne, the former executive editor and publisher of The Dallas Morning News who died in August, suggested testing Mr. Johnson's idea of turning the center of stores into "Town Squares," said a person who attended the meeting.

"I think not testing was a mistake," said Penney board member Colleen Barrett.

Instead, Mr. Johnson used a more Apple-like approach to vet ideas. Secretive innovation teams were set up shortly after he arrived to explore ideas from customer service to store layout. The groups, which came to be known as iTeams, were told to scour various retail innovations around the globe—and to keep their efforts to themselves. While iTeam members were to request information from other departments, they weren't supposed to tell them why.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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