Empty Suits

And what about the executives Howell developed to fill the executive suite? Were they the best and the brightest, people of strong minds and razor -sharp abilities ? Sure, in some cases (obvious in this book). But generally ? No. One of the great business organizations of all time actually ended up with many mediocrities immediately below the main man.

How could this happen? Well, first of all, we have to drag out those perennial whipping boys, insularity and parochialism. Lash! Lash! And they deserve it. The Penney culture's almost jingoistic antagonism toward "outsider" points of view (and talent) was always a drawback. But there is more to the story, and like so much of the Penney downfall, it's loaded with more irony.

In addition to Howell's dominant personality, his insistence upon store-oriented breadth at the top led to weaknesses in the executive suite. How? Well, with the world's store of knowledge increasing exponentially these days, it is not the time for well-rounded generalists to run things. A really sharp management today needs a specialist at the top who somehow has a grasp of the overall picture and rides herd on a band of acute specialists. Andy Grove at Intel would have come quickly to mind a few years ago. But, toward the end of the last century, Penney management was the diametric opposite .

Breadth of (retail) experience, in fact, became so worshiped in executive offices that special "fast track" career paths were designated for those who seemed particularly promising for senior management. So after being dipped into store managing, the candidates were often whisked from one retail- related broadening experience to the next with such rapidity that one often heard exchanges like:

Associate A: "Is he really that good?"

Associate B: "Nobody knows . He's never been in one place long enough to find out."

What was lost in all this? As the frenetic well rounding of candidates continued , specialistsmen and women with drop-dead knowledge and skills in some particular area of the business became less and less important in the JCPenney executive suite (particularly expert buyers ). Under Batten, when Penney got into new businesses like catalog, discounting, and fashion, he disregarded tradition and brought in top-level specialists from the outside. No more.

Even more damaging , specialists within the company became disqualified for senior management candidacy. Only the broadened store-oriented person need apply.

Thus, store-oriented shallowness finally reigned at the top, the executive suite largely populated by empty suits who were prey to the chairman's moods and whims. Just before Howell retired with a bigger package and bonus than any previous CEO, he unwittingly bragged about the shallowness of his senior managers in his 1995 annual letter to stockholders . Citing the "exceptional strength" of Penney's management team, it said:

Thanks to the retail experience , ^[4] dedication, and skill of our company's managers and the professionalism of our store managers, JCPenney is well-positioned for this decade and poised for the coming century.

Oh? Five years later, with outsiders at the very top, most senior managers were given written tests (!) to assess their skills. Few graded well. With that message leaked into the grapevine , retirement packages were dangled. Soon, the officers from the 1990s were all gone as well, the old guard replaced by more outsiders with impressive and focused rsums.

But there was to be a surge of remarkable events before all the outsiders arrived.

^[4] Italics are mine.