What If?


As of this writing, Vanessa Castagna has changed the Penney culture. And there is certainly no hard argument against the course Questrom and Castagna took. The old company was just too far gone. Too many incompetents were on the bridge. Drastic measures had to be taken. And, recalling the mutinous stockholders who tried to unseat the great Mil Batten, there is no room for sentiment in business.

Despite all the key people Castagna and Questrom have brought in from the outside, however, and despite all the new systems and procedures, the JCPenney makeover remains an extraordinary demanding endeavor. And to what final avail?

Whatever happens, one can't help wondering what the effect would have been if the same mandate , the same brains , the same energy and talent had been applied to the traditional company in order to get it turned around.

Remember that for most of the twentieth century the J. C. Penney Company was a big winner. So could it somehow have survived in its original form? Could the traditional operation somehow have succeeded in the early twenty-first century? Probably not. But are we absolutely sure? No. There are two reasons. First, the real J. C. Penney leadership was quite troubling after W. R. Howell (n Bill) took over. From then on, those in the executive suite increasingly postured as Penney people, paying lip service to HCSC and The Penney Idea while other things dominated their agendas . This culminated in the move to Texas.

Running a company built upon the concept of thrift and hard work first, rewards second, the Howell administration tore JCPenney from its roots because they wanted to live in affordable McMansions on golf courses in gated communities. They wanted easy commutes and commodious office suites with custom-made views. They wanted geographic centrality with a good, accessible airport. While the old generations ate, slept, and drank merchandise and stores and put up with any abuse and inconvenience in communion, the Howell crew was dedicated to getting the numbers and driving the stock.

The second reason is that however informed and sound it may be, the Castagna/Questrom makeover has a weakness. The stores are going to have a chic, updated, uncluttered look with a strategically narrow and deep inventory. The centrally bought merchandise itself will have a chic, updated, uncluttered presence with strategically coordinated advertising and sales floorswith promotional items in stock. (It used to be that the chances of finding a preprint-advertised item at the store was no better than 50/50.)

There is only one problem.

JCPenney will seem like everyone else. Or, at least like those who operate pretty much the same way, and there are several. Whereas the traditional J. C. Penney Company always stood out, always offered unique combinations of value and service and had the local heartbeat of a person .

Ah, but the reader has just thought, "The traditional company didn't have centralized buying. How could those cluttered and dowdy stores compete today?" Well, the esteemed Walt Neppl, weeks shy of his 80th birthday roast, had an answer to the first complaint:

"Whoever said centralized buying was bad? I certainly didn't. The problem, as always, is execution. Execution is where the company broke down, in my opinion, not whether or not to buy centrally."

And how to fix unexciting, confused stores? Check the premise at work in Plano when the Questrom team assumed full command. Big Brother and Big Sister had to start calling the shots. To restate the case, any director would have heartily approved any radical move Questrom wished to make (having already approved what Castagna had been doing for a year).

But the only way? James Cash Penney built a retail empire by tirelessly searching out the very best raw managerial candidates, relentlessly training them, providing them with the opportunity of a lifetime, swearing them to the cause, and then trusting them as responsible individuals to succeed. Result? An army of fiercely competitive individuals who were bonded into a cooperative fraternity of honorable achievers . Of course, there was a wide range of competence among them, from relative dolts to the really extraordinary people like Jack Maynard. Overall , however, they were a force of remarkable poweronly fading in stature when values and standards diminished, management lost its merchant/merchandise balance, and the cancers of bureaucracy and nepotism spread.

So what if an idealized version of Mil Batten had taken over Penney early enough to stomp those outalong with the creeping status-seeking arrogance ? Could the traditional company have then prospered into the twentieth-first century?

Yes, it seems, if Honor still had currency with employees , suppliers, and customers.

Yes, if the Confidence of an executive's convictions stood stronger than consensus and committees .

Yes, if Service to the customer and the communityhowever defined in contemporary Americawas still rewarded by the customer's patronage .

And yes, if Cooperation still made an organization hum and business relationships soar.

It's hard to deny the ghosts and echoes of the past.




Celebration of Fools. An Inside Look at the Rise and Fall of JCPenney
Celebration of Fools: An Inside Look at the Rise and Fall of JCPenney
ISBN: 0814471595
EAN: 2147483647
Year: 2003
Pages: 177
Authors: Bill Hare

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