JC Penney Corporation (JCP) is a more-than-one-hundred-year-old company which has got into trouble in the late 1990s and the early 2000s, but a dramatic turnaround happened after the good leadership quality of few key people, Questrom and Castagna between year 1999 to 2004; Mike Ullman and Theilmann between year 2004 and onwards. The contributions of Questrom and Castagna were more on optimizing business operation while Mike Ullman and Theilmann were more on changing the organisational culture. Shortly after joining as chairman and CEO of JCP in December 2004, Mike Ullman along with his top management team took various initiatives to change the climate and culture of JCP from the rigid one into more flexible and democratic environment. The most notable among these were the “Winning Together” principles (WTP), poster campaign “Just Call Me Mike!”, Associate Engagement Survey (AES), the relaxed dress code, workplace decorations, new security ID badges, more flexible working hours, Christmas party and so on. Besides, they started various people development initiatives such as “Retail Academy” and the use of IT in training its employees. In early 2007, JCP has opted of new brand positioning ‘Every Day Matters’ in order to spur the growth by forming “Deeper, Emotionally-Driven Relationships” with customer. All the 151,000 Associates were trained to execute the various new initiatives and briefed by the managers on the new branding and why they were the key to making it a success. On December 28, 2006, JCP announced that it has fired COO, Catherine West due to her failure to satisfy performance objectives. The firing triggered a US$ 10 million severance pay. This issue has brought out some message on hiring outsiders from different industry. Analysts felt that retail was a fast moving industry and it was difficult for an outsider to absor the details in a short time and mostly will become a failure. The results of initiatives taken by Mike Ullman and top management started bearing fruits within two years. By the end of 2006, JCP was able to retain more existing employees and attract enough talent compare with the past few years. Graduates from premier design and retail schools showed an interest in working for the company. The impact on the bottom line was also visible as JCP posted its 15th consecutive quarter of sales gains at the end of fiscal year 2006. Its share prices too showed significant growth. JCP contended that its engaged employees were making the difference.
With specific reference to the case, what are your views concerning making the appointment as CEO person from outside rather than promotion within the company?
Base on my understanding of the case, making the appointment as CEO a person from outside rather than promotion within the company is risky but I will do so. In my opinion, a good new perspective can bring new opportunity and even bright future for company while in-depth experience, here I mean the existing employees; can improve effectiveness of the business operation in company while coordinate with the company’s vision.
According to the case study, quite a numbers of the top management or senior position was hold by outsiders. For instant, Allen Questrom joined from year 1999 to 2004 as Chairman and CEO of JC Penney Corporation (hereinafter called JCP); Myron E. Ullman joined from year 2004 December onwards as Chairman and CEO of JCP; Vanessa Castagna joined from year 1999 to 2005 as COO cum CEO of JCP’s stores, catalogs, and Internet business; has shown a lot of good examples on making the appointment as CEO person from outside rather than inside.
I have strong reasons to support my point of view. For the first reason, outsiders always bring in fresh ideas, skills and knowledge. Refer to the case study; Myron E. Ullman, the CEO who brought the revolutionary change in the culture of JCP Lookers-on see most of the game. A new comer able to analyse things in the different angle...