A couple of very spot-on articles on driving change in business. Fortune had a good in depth review of JCPenney, 'a tale with very few heroes'. While the HBR short piece mentioned JCPenney as a key example of more general truths.
The tough part is distinguishing belief from fairy tale when in the depths of the trenches. Hindsight is of course always right. But perhaps the lesson there is that one must drive for as much context and perspective as possible to challenge those beliefs as strongly as possible.
My italics....
Transformation Is an Era, Not an Event - Harvard Business Review: The biggest transformation flops the business world has seen were the result of believing in fairy tales. Take JCPenney. In 2012 its managers embraced an ideology: Consumers prefer consistent pricing over constant promotions, and by deemphasizing house brands, JCPenney would attract higher-end consumers. A compelling philosophical argument can win people over in the short term, but in a long-haul initiative it eventually confronts reality. And reality always wins.
Two other truths we discovered about embarking on an era of transformation: You should prepare people to see things get worse before they get better (especially because early moves—which will be assessed according to the metrics of the legacy model—will appear more mistaken than they are). And you must take a fresh look at the people you’re relying on. Accept that not everyone is cut out to thrive in conditions of ambiguity and adversity. Recast your team to be transformation-tough.
How to fail in business while really, really trying - Mar. 20, 2014: It stars a charismatic leader bent on radical change and features a failed attempt to Apple-ize Penney, a mission that ended up being every bit as crazy as it sounds. There's a board of directors who sometimes seemed more concerned with what they'd be served for dessert than with the fate of the company. Then there's the mistake that cost the company $500 million -- and the fact that Penney actually began retreating from its controversial pricing strategy even before Johnson left, raising the question of whether the company can even truly be said to have tried his approach. Throw in a hedge fund titan who always knew better -- except when he didn't. The result: Billions in revenue were vaporized, and more than 20,000 people -- many of whom embraced the new Penney -- lost their jobs, seeming to hasten the decline of American brick-and-mortar retailing. This is a tale with very few heroes.
The tough part is distinguishing belief from fairy tale when in the depths of the trenches. Hindsight is of course always right. But perhaps the lesson there is that one must drive for as much context and perspective as possible to challenge those beliefs as strongly as possible.
My italics....
Transformation Is an Era, Not an Event - Harvard Business Review: The biggest transformation flops the business world has seen were the result of believing in fairy tales. Take JCPenney. In 2012 its managers embraced an ideology: Consumers prefer consistent pricing over constant promotions, and by deemphasizing house brands, JCPenney would attract higher-end consumers. A compelling philosophical argument can win people over in the short term, but in a long-haul initiative it eventually confronts reality. And reality always wins.
Two other truths we discovered about embarking on an era of transformation: You should prepare people to see things get worse before they get better (especially because early moves—which will be assessed according to the metrics of the legacy model—will appear more mistaken than they are). And you must take a fresh look at the people you’re relying on. Accept that not everyone is cut out to thrive in conditions of ambiguity and adversity. Recast your team to be transformation-tough.
How to fail in business while really, really trying - Mar. 20, 2014: It stars a charismatic leader bent on radical change and features a failed attempt to Apple-ize Penney, a mission that ended up being every bit as crazy as it sounds. There's a board of directors who sometimes seemed more concerned with what they'd be served for dessert than with the fate of the company. Then there's the mistake that cost the company $500 million -- and the fact that Penney actually began retreating from its controversial pricing strategy even before Johnson left, raising the question of whether the company can even truly be said to have tried his approach. Throw in a hedge fund titan who always knew better -- except when he didn't. The result: Billions in revenue were vaporized, and more than 20,000 people -- many of whom embraced the new Penney -- lost their jobs, seeming to hasten the decline of American brick-and-mortar retailing. This is a tale with very few heroes.
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