What J. C. Penney can teach us about change management

“It has been a surreal two years for shareholders, customers, and employees of J. C. Penney (JCP),” writes Roger Martin in Memo to JC Penney: Execution Is Not Strategy that ran recently on the HBR blog. “On June 14, 2011,” the story continues, “JCP appointed Apple Store star Ron Johnson as CEO to replace what activist investor Bill Ackman derided as the completely failed regime of then-CEO Mike Ullman, who had apparently badly mismanaged JCP for his seven years at the helm.

“But after almost two years of plummeting sales, profits, and stock price, Ackman and friends had to steal a line from The Who and ask shareholders, customers, and employees to “Meet the new boss, same as the old boss” with the reappointment of Ullman on April 8, 2013.

“The narrative has generally been that Johnson was a brilliant strategist brought in to entirely overhaul the strategy of JCP and make it shine like the Apple Stores. But that focus on broad strategy did not work and Ullman was brought in to refocus on the basics—on execution.

“The narrative is unsurprising given that the overwhelming view of strategy is anything that involves big shifts accompanied by a lot of hot air must, by definition, be ‘strategic.’ Johnson certainly provided big shifts and hot air aplenty.”

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“What a fascinating take on the situation with JC Penney,” writes Linkage change and transition expert Mitchell Nash. “While the focus of the article is on strategy, I can’t help but look at the situation through the lens of change and transition management. How often have we seen and heard about a new leader coming to an organization and implementing a new strategy? And how often do we see that they don’t achieve what they had hoped for? More often than not.

“I firmly believe that having the ‘right’ strategy is only part of the story. And I think the other part—understanding how people react to change—is just as important.

“I also wonder how much input and buy-in the CEO, Ron Johnson had for the changes he implemented? The fact is that when leaders attempt to make a change without critical buy-in (even with the best intentions, and maybe even the “right” decisions), even the best-laid strategies rarely end up being successful.

“When we work with organizations implementing change and transition, we recommend the following guidelines:

• Leaders must make sure that the entire organization understands the business case for change. Everyone must understand why the change needs to be made.
• Leaders must over-communicate the business case for the change so that people will believe that it’s both real and urgent.
• Leaders must be certain that all levels of leadership are on board with the change and are communicating the same message.
• Leaders must be properly attuned to the passive resistance to change that inevitably shows up. Deadlines will probably be missed and excuses for not implementing will be made, etc..
• Leaders should listen more than talk and they must understand where people are coming from. They don’t have to agree, but they do, at least, need to understand.
• Leaders must recognize, celebrate, and publicize all of the wins (even the small ones), so that the organization can see that movement is being made.

“We are not suggesting that JCP did not do this. But I do know that more often than not, leaders will implement a plan and not pay attention to the “change needs” of their employees. And paying attention to those critical needs can mean the difference between success and failure.”

So, let’s hear it. What’s the biggest barrier to change that your organization is facing?

More about Mitchell

Mitchell Nash is a Regional Vice President, Principal Consultant, and leader of Linkage’s Change and Transition Leadership practice. He has over 20 years of experience leading, facilitating, and supporting large-scale change initiatives and has unique expertise in facilitating organizational impact by using technological, organizational, and leadership development solutions.