Why the heck did Ron Johnson leave Apple for J.C. Penney?

“As Apple’s retail chief, Ron Johnson walked on water,” Steve Tobak writes for FOXBusiness. “It’s hard to imagine what it must have felt like to be a chosen disciple to join in the second coming of Steve Jobs and lead Apple’s remarkable ascension to the top of the corporate world. Come to think of it, it’s not that hard to imagine. I bet it felt great.”

“And yet, Johnson gave all that up to run J.C. Penney,” Tobak writes. “Just think about that for a second. You’re one of the top guys at Apple. You helped build the most valuable company on Earth. Then you’re CEO of a commodity clothing retailer.”

“Yes, I know Johnson worked at Target before Apple. I can almost see going back to run Target. At least Target has some cache. But Penney? That’s sort of hard to make sense of. Maybe the guy fell and hit his head on something. Who knows?” Tobak wonders. “No, that couldn’t be it. The madness continued well into his tenure. Lest we forget that the guy gutted the company and its stores from top to bottom essentially betting the farm on a bizarre and grandiose strategy to remake the retailer into an apparel version of Apple. All without test-marketing the idea first. Not a good move.”

“When he was ousted by the board, Johnson’s reputation was worth about as much as Penney’s share price. Wonder if he has any regrets about leaving Apple, grasping that particular brass ring, or thinking he could somehow magically turn coal into diamonds. We may never know,” Tobak writes. “Snarky cynicism aside, there is a much bigger question here. Why did he do it? More to the point, why do they do it? After all, Johnson is far from the only successful executive to give up a prestigious gig at an industry giant for the chance to run the corporate equivalent of a popsicle stand.”

Read more in the full article here.

MacDailyNews Take: Hubris.

Related articles:
Three ex-Apple execs exit JC Penney following Ron Johnson ouster – April 11, 2013
Yoshikami: The Ron Johnson disaster at JC Penney – April 9, 2013
Ron Johnson: Apple Stores vs. J.C. Penney – April 9, 2013
Will Apple bring Ron Johnson back? – April 8, 2013
Ron Johnson out as JC Penney CEO, says source – April 8, 2013
Ron Johnson starting to look a lot more maniacal than brilliant – March 8, 2013
If JC Penney fires CEO Ron Johnson, analyst predicts bankruptcy – March 8, 2013
J.C. Penney CEO Ron Johnson cuts 2,200 more jobs as sales plunge – March 8, 2013
J.C. Penney posts large loss as sales sink further – February 27, 2013
JC Penney CEO Ron Johnson capitulates, brings back sales – January 28, 2013
Apple retail’s Ron Johnson and John Browett have proved the Peter Principle is alive and well – November 13, 2012
CEO Ron Johnson switches J.C. Penney to two-tier pricing with price-match guarantee – July 26, 2012
Why is Ron Johnson’s retail strategy for J.C. Penney failing? – June 26, 2012
J.C Penney’s stock tumbles after key exec’s abrupt exit – June 19, 2012
J.C. Penney reports loss and plummeting sales in 1Q – May 15, 2012
Why Ron Johnson left Apple to head JC Penney – April 30, 2012
J.C. Penney lures another executive from Apple – April 26, 2012
Steve Jobs’ ex-lieutenant Ron Johnson adds $1.5 billion to J.C. Penney in two days – January 30, 2012
J.C. Penney CEO Ron Johnson: What I learned building the Apple Store – November 21, 2011
New J.C. Penney CEO Johnson hiring former Apple co-workers – November 9, 2011
Why Apple’s retail genius Ron Johnson is paying for the privilege of running J.C. Penney – June 15, 2011
Apple’s retail store chief Johnson off to J.C. Penney; expected to become CEO within months – June 14, 2011

33 Comments

    1. Ron knew he wouldn’t take over Apple so long as Tim Cook was there. So when he was approached about saving a struggling, historically important company, he took a shot.

      Unfortunately, his changes were such a shock to the JCPenny shopper that they drove traditional coupon/sale shoppers away before new shoppers could be attracted. And JCP’s board wasn’t going to give him time to work through it.

      1. Ron’s critical mistake was concept. You can not take Apple’s approach and just apply it to retail.

        Psychology of buys and they buyers of pricey tech stuff and cheap clothes are totally different.

        Why Apple buyers love simple honest pricing, cheap clothes retail is based on self-delusion of giant discounts and marketing programs. People WANT to be deceived, this is part of whole shopping thing (for this kind of goods).

        There is no time after which Ron’s approach could possibly become more successful as discounts-based model. I personally liked the approach, it is beautiful as concept, as theory, but it is not based on reality where the likes such as myself are absolute minority.

  1. He probably wanted to run a whole company from the top. A senior VP is not a CEO.
    He did try but failed because he did not understand the clientele. Penney customers don’t want chic they want cheap.

      1. True. There was no viable niche for JCP. Low-end value was already locked up and JCP had already lost its mid-range chic/value status. As a department store, it had little chance of moving up to the high-end with Lord & Taylor and others. It was lost in-between, unable to compete with low-end value and unable to attract a sufficient number of mid-range customers. Even if JCP had had success at transforming into a low-end value store, it would have been difficult to pay the rent at the big malls.

        If Ron had set aside a section of each department for his no-frills value proposition, but maintained the traditional coupon and sales approach to lure customers, then he might have been able to gradually interest the customer base in value-priced offerings. But he attempted to shoot the moon and it did not work.

    1. Your conclusion seem like the most likely one, doggonetoo. Many corporate executives are wired to want to run the whole show – that ambition is how they rose to their current level and that ambition is what takes them beyond their level of competence to failure.

      The fact is, Ron Johnson may not have truly been all that great in the first place. Selling Apple products is not necessarily a challenging task. Sure, Browett sucked at it, but that was primarily because he enraged the Apple Store retail employees. If he had just sat back and not rocked the boat, he might have survived for a while. Perhaps Ron Johnson and others had an inflated opinion of his abilities. Never forget that it is much easier to fall than to rise.

      1. I disagree. Ron Johnson saw exactly what pablorph said: JCP was slowly moving down the road to ruin by battling for the cheap customer. Ron saw that a serious change needed to be made or JCP was just going to continue its gradual slide into oblivion. Unfortunately, the JCP board had no patience with his massive changes, and the change back to their old CEO may prolong the company, but it will eventually kill it.

        1. Possibly. But I visited JCP several times during the Ron Johnson experiment and he turned an already struggling store into a barren wasteland populated by a few weary nomads.

          I was just speculating in my post above, but there may be some elements of truth in it. Ron Johnson (or anyone else) could have sold Apple products in “Apple Shack” or the “Apple Barn.”

          Apple already had a small, but loyal fan base when the first Apple Stores opened in Tyson’s Corner and Glendale Galleria on May 19, 2001. These Apple fans were frustrated with the big box store experience (which Steve Jobs had eliminated following his return) and highly disappointed in the CompUSA “store-within-a-store” approach which failed to live up to expectations. The best option for most people was a local Mac specialist (MicroCenter in Houston).

          The Apple/Mac fan base slowly began to grow after the iPod and Mac OS X (now OS X) were released, and that growth rate continued gradually increasing, then accelerated after the iPhone changed the world in 2007. The Apple Store grew with the fan base and the incredible array of Apple devices, particularly the mobile devices – iPhone, iPad, iPod, MacBook, and MacBook Pro.

          Ron Johnson was responsible for site selection, in-store service, and store layout. But Tim Cook controlled the Apple Store retail inventory from the start, and still does as CEO. And the Apple products sold themselves. As I stated previously, even Browett could have succeeded if he had not angered the Apple Store retail employees through his misguided attempt to “cut costs.” I always figured it was a stupid gesture to show that he was in charge.

          Anyway, Ron Johnson proved that success in one or two venues (Target and Apple) does not always translate into a third (JCP). Maybe his next act will be more successful? That likely depends on how much he learned from his JCP experience.

  2. Jcpennny
    “We want you to do to our retail stores to what you did to apple. Apple has one of the largest money-spending per square inch.”
    RJ
    “Sweet, CEO status and I can make a company my own!”
    JCPENNY
    “oh….we didn’t want you to change our profit margins…..a misunderstanding…your fired.”

    1. Actually very close. JCPenny did not want to change what it was doing. They had that part down. They just wanted the customer to change.

      Sadly this is what happened to Dell. Companies need to keep changing / growing / improving or they will fall behind.

  3. He obviously enjoys the challenge. Target was worse off than JCP before he got there. The big difference was Target was willing to get the facelift, JCP were a bunch of cowards. Maybe hubris, but with his track record, why not? It was JCP’s board that killed any chance, not Johnson’s hubris.
    If you’re Johnson, you go in, do your thing, get Apple or Target up and running… then what? Sit back and twiddle your thumbs while your well oiled machine runs itself? He would have been bored out of his skull. It sucks that JCP didn’t work out for him, but I seriously doubt he regrets leaving Apple (I’m sure he does regret trusting JCP’s board!).

  4. So many factors.

    Yes, he probably knew that Steve was not long for this life and he probably also knew that Tim had very different ideas about the stores. (Granted that Tim was wrong, at least at first. Doesn’t mean that Johnson was right.)

    Probably, like many of Steve’s top managers (Forstall), Johnson believed that he was just as good as Steve (at least in retail) and wanted to show that was so. Steve liked that kind of manager and was that kind of manager himself. Tim, obviously, does not and is not.

    And yes, Johnson completely misunderstood Penny’s customer base. But then, so did Penny’s board. They offered him the job. My guess, the board recognized that if they kept on/keep on the way they were/are going, in the long term they’re dead. They understood/understand that they need to change, like Radio Shack or Sears or…, and they saw Johnson as the person to lead that change. Johnson bet the farm, but, my guess, that’s what he was hired to do.

  5. A retail guy… working for a company that makes products and needed a retail arm…
    Moves to a run retailer. Seems to make sense to me. His only mistake was not understanding the spineless board members at JCPenney.

  6. “At least Target has some cache”

    Did you mean “cash” or “cachet”? People who don’t even know the meanings of the words they are trying to sound out should not be paid much attention. They just try to use bigger words than they should to mask their vacuousness.

    RJ was responsible for the development of Targets “cachet”. He definitely moved them upscale and forward in time. The Penneys Board only gave him about half the time he said he needed to get the change implemented. I think he erred in that his first steps were to alienate existing customers by tossing out their brands, even the ones that were good sellers with a loyal following. There is definitely a need for a retailer with a straight forward approach, real deal merchandise and sensible pricing (kind of like Apples TCO. If you understood it, you’d never buy anything else). RJ took a run at making JCP into that. Too bad he didn’t understand how short his leash was.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.