Bill Campbell, “coach” to the likes of Apple, Google, Intuit and scores of Silicon Valley entrepreneurs, summed up now ex-JC Penney CEO Ron Johnson's implosion as a failure to protect the existing retail business as he sought to radically update it.
Johnson, the former head of retail sales at Apple, was sacked as JC Penney CEO this week following a disastrous 17 months leading the discount retailer. As Johnson tried to reinvent the business with innovations like “fair and square pricing” and smaller stores within the store, sales plummeted 25 percent in 2012 and the stock fell a whopping 57 percent.
Campbell, who sits on the Apple board and knows Johnson well, talked about the one-time retail golden boy's epic failure during a discussion today with Intuit CEO Brad Smith. The root of Johnson’s demise was in part due to a retail industry scared of this swashbuckling change-agent from Apple, Cambell says. But mostly he says Johnson was tone-deaf to the issues surrounding the low-rent retail world in which JC Penney plays.
“I think there were a lot of people in industry who were really, really concerned about him being successful, and didn’t want him to be successful because it would have changed a whole lot of the metaphors in the industry," Campbell says. “A lot of people were saying, ‘Oh my god, look at what he is going to do.’"
“Was I surprised he got bagged? yeah – I was surprised that they didn’t wait until at least until the end of the year. And see where this went, the store within a store concept and some of these specialty things.
"Ron made a lot of mistakes I think. He certainly, according to The New York Times at least, didn’t pay attention to anyone. Whatever you need to do, you have to keep the current business going while you are experimenting with your new one. He didn’t do that. What he did was put a bullet hole in his current business and went about trying to create a new one. And when the new one went down, well think about it, 25 percent? It’s a multi-multi billion dollar company. It’s a disastrous thing.
"No matter where I was, you always think about how you limit the downside as you are making product transitions. He didn’t do that at all."
