J.C. Penney Hired the Wrong Therapist to Ease Stress After CEO's Ouster

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How bad was Ron Johnson's tenure as CEO of J.C. Penney? So bad, the company reportedly needed to bring in an organizational therapist in the aftermath of Johnson's firing. And like many of the moves that the retailer has made in the last couple of years, this one managed to backfire -- spectacularly.

NEW YORK - NOVEMBER 03:  Honoree Liz Sweney, EVP, Senior General Merchandise Manager attends the 5th Annual Fashion Delivers Gala at The Waldorf Astoria on November 3, 2010 in New York City.  (Photo by Charles Eshelman/Getty Images) *** Local Caption *** Liz Sweney
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Buzzfeed reports that J.C. Penney executive Liz Sweney (right) brought in the therapist to address employees at an internal meeting last month. According to Buzzfeed's sources, Sweney and the therapist compared Johnson's tenure to a bomb going off. They also screened "Boatlift," a short film about the sea evacuation of lower Manhattan on 9/11, as a way of impressing upon employees the importance of independent leadership in the post-Johnson era.

The references to bombs and 9/11 came just weeks after the Boston Marathon bombing, and Buzzfeed reports that many employees came away offended. In a sense, it was a perfect coda to Johnson's disastrous tenure: They were trying to make things better, but wound up making things worse.

While the content of the meeting was clearly misguided, it's not uncommon for companies to bring in therapists in the wake of executive shake-ups. And last month we shared the story of a therapist who works with London bankers dealing with the shame and stress of working in investment banking.

Yes, bankers and executives need therapy, too. But next time J.C. Penney wants to soothe its stressed-out management team, might we suggest an afternoon of yoga or meditation. Or, at the very least, a therapist who won't try to compare getting rid of coupons to terrorism.

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J.C. Penney Hired the Wrong Therapist to Ease Stress After CEO's Ouster

It was repeated so often that it became dogma: Ron Johnson's greatest sin was ditching the sales and coupons. Johnson himself called it a "mistake," and one of his last acts as CEO was to abandon his pricing strategy and bring back the coupons.

While many commenters cheered the coupon comeback, a few were more skeptical of the return to the old regime. In fact, many noted that the retailer was obviously just jacking up prices just so they could lower them again with discounts.

Obviously J.C. Penney needs to bring back the sales and coupons if it wants to attract its wayward customers, but it should probably find a more subtle way to do it. Johnson was criticized for abruptly abolishing coupons without first testing the strategy; if the new management just slaps on higher price tags and then hands out coupons, it risks making the same error in the opposite direction.

One commenter identified herself as a sales associate for J.C. Penney, and said she hated the "dog and pony show" of the old coupon regime. Her comment got more than 300 'likes,' as well as comments from other sales associates who expressed how difficult it was to deal with price adjustments, extreme couponers and confusing sales.

"As an associate, I had Nightmares in Nov & Dec of 2011 when the coupons were out in Groves [sic]," said another commenter, who went on to suggest that the retailer should place limits on how many coupons shoppers can use.

The lesson for management? If you're going to bring back coupons, don't make a complete return to the "death by coupon" era -- it can be a huge pain for your employees.
In overhauling the retailer's apparel offerings, Johnson evidently wanted to transform its customer base into something more closely resembling Abercrombie's young and skinny crowd. Unfortunately, that meant that J.C. Penney's larger customers were left out in the cold.

Various commenters complained that plus-size offerings have dwindled significantly, and that they'd like to see all styles of clothing available in larger sizes. If the new management (which is mainly the old management) wants to win back customers, it will need to make sure customers of all sizes are accommodated.
Several commenters said that they missed being able to shop and order through a catalog.

Sure, most people who can't make it into the store will be inclined to shop online, which is more cost-effective for retailers than shipping out heavy catalogs and taking orders by phone. But members of J.C. Penney's older customer base may not be as technologically inclined, so it's likely missing out on sales by not providing it as an option.

The retailer has already made concession to its older shoppers by bringing back St. John's Bay and other "basic" clothing. Making it easier for them to shop from home would also be a good move.
One innovation that Johnson brought over from the Apple Store was the mobile checkout: Instead of waiting in line, customers could get checked out by a roving cashier toting a smartphone or tablet.
But much like the pricing strategy, mobile checkouts apparently don't play as well in a big department store as they do in the Apple Store (AAPL). We've heard from J.C. Penney employees complaining about the switch, and it looks like customers aren't thrilled either; a few commenters noted, for instance, that the process makes getting a receipt a hassle.

Maybe the system has been implemented poorly, or maybe it's just a case of an older customer base being confounded by innovation. Either way, this looks to be another change that J.C. Penney should scale back or reconsider.
Ron Johnson had a vision of a department store as a marketplace -- instead of just organizing clothes by department, he would have a collection of boutiques, each dedicated to one brand.

But the stores-within-a-store concept might be confusing some customers. One commenter pointed out that the layout makes comparison shopping difficult, forcing customers to visit multiple boutiques just to find a pair of jeans. Other commenters echoed that complaint, noting that they found the layout so frustrating that they left the store empty-handed.

The retailer has burned through a whole lot of cash remaking its stores, so we imagine management isn't thrilled at the prospect of undoing those changes. But if they want to get sales figures back up, they'll need to arrange their stores in a way that makes comparison shopping among its brands easier.
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