Despite constant posturing to the contrary, W. R. Howell and his administration were morally very inconsistent. While he could say, with all his heart, that he believed in James Cash Penney and everything the founder had stood for, he did not, and his administration did not act in accordance with the ancient precepts. Lip service was constantly paid while company communications produced endless and artful documentation of the rich Penney legacy. But in terms of contemporary relevance, most of this was pure puffery.
Below in boldface are three of the key "Penney Idea" precepts that formed the foundation upon which the great organization was built. The incidents related after each precept occurred during or just prior to Penney's 1994 banner year.
To do all in our power to pack the customer's dollar full of value, quality, and satisfaction. The year was shaping up to be one of the company's best ever. Looking to such results, Howell had given a speech at the Waldorf-Astoria in which he predicted a bright future for his company. After the speech, the CEO and his entourage took a limousine to Teeterboro airport, where a company jet was waiting. En route, Howell pontificated about the success he saw on the horizon. Then he chuckled and added, "You know, guys, there's really no mystery to making it happen. All you have to do is keep your costs under control." Possible cost-cutting measures then dominated the conversation for the rest of the trip back to Dallas. Not once was the Penney customer mentioned.
To serve the public, as nearly as we can, to its complete satisfaction. "4 Billion or More in '94" was the name given to an internal promotion begun in the first quarter of 1994. The goal was a fiscal year increase in revenues by that amount (or more). Profits, it was assumed, would rise similarly. Posters went up in every Penney office around the world. An expensive video was produced. Rallies were held. The whole system was revved up to sell more merchandise or to support anything that would do so. More, more, more in '94! Inventories were expanded ”and hidden in some cases, to be marked down and written off the following year. Where was the customer in all this?
To expect for the service we render a fair remuneration and not all the profit the traffic will bear. Joan Gosnell was manager of the extensive JCPenney archives. ("If it's old or dead, it's mine.") One day she finished compiling memorabilia and notes for an executive's speech, including a favorite anecdote:
Earl Sams, in charge of the company for four decades, had always worshiped the founder's customer-first precepts. Once Sams wrote store manager Al Hughes (later a Penney president) to gently scold him because his store had shown too much profit!
Gosnell returned to her office ”where a small package awaited her. She opened it and found an L-shaped Plexiglas desk plaque that read:
"If it doesn't have to do with profit,
I don't have time for it."
Since this plaque landed on hundreds of managers' desks throughout the company, she wondered if anyone was supposed to have time for the customer anymore. Apparently the administration thought not.