Ron Johnson was appointed CEO of retail giant J.C. Penney Company, Inc. in 2011. Johnson’s vision was to reinvigorate J.C. Penney’s tired brand. He had already done so for Target, had transformed the shopping experience at Apple stores, and was expected to excel at J.C. Penney as he set out to reinvent the brand. He was, it seemed, the right person at the right time.
Less than a year and a half later he was ousted. His story can teach us a lot about how to approach decision-making.
THE PLAN: CONSISTENT LOW PRICES
Johnson immediately began making the significant structural and pricing changes he felt would be most effective for the company and for its customers. He understood that customers were aware of the common retail tactic of inflating prices to provide greater sales. Johnson believed that customers would rather have consistent low prices than the “fake prices” J.C. Penney and other retail stores used. He did away with coupons, sales, and promotions and replaced them with dependable everyday low pricing.
The idea appeared to be a good one, but in practice his plan didn’t hold up as well as he anticipated. J.C. Penney’s sales plummeted and previously loyal customers chose to shop at other retailers instead.
THE MISTAKE: SALES REEL IN CUSTOMERS
Johnson eventually realized that sales and discounts reel in customers even if original prices are inflated. Without J.C. Penney’s beloved sales, customers saw little reason to shop there and instead sought out advertised sales at other stores. Had Johnson bothered to ask his employees and customers how they thought the brand could be improved before formulating his own plan, he could have avoided this preventable mistake and his stakeholders wouldn’t have abandoned J.C. Penney like they did.
Johnson had the potential to make a positive impact on J.C. Penney, but his failure to involve stakeholders when searching for solutions before making wide reaching decisions led to his downfall.
THE CAUSE: STAKEHOLDERS PUSHBACK
Embarking on a new vision - whether you’re implementing a new recycling plan in your community or trying to bring new life into your lackluster workplace - is exciting. It means finally making some of those changes you’ve been hoping for. After investing time and resources into a plan, it’s easy to feel enthusiastic and positive about what you’ve accomplished, as Johnson did. But rollouts don’t always happen smoothly. Since different stakeholders have different perspectives, personalities, and interests, there’s often major pushback after decision makers publicize a decision or implement a change.
The reality is that regardless of how long you spend on developing a plan, how much market research you conduct, or how many of your advisors support your vision, you may still be faced with a certain level of resistance from your stakeholders, whether it’s simply a lack of support that results in tension in the company or a complete uproar and disruption to the company.
WHY NOT DO IT TOGETHER?
The question all decision makers face is how to reduce opposition. The answer? Turn those obstacles into building blocks for success; get your stakeholders involved in the process from the start. Have you ever considered that your stakeholders may have a perspective on an issue that you’ve never thought of? Perhaps your stakeholders can provide innovative ideas or solutions that can help frame your thinking. Or maybe they can offer advice and give you feedback on your own ideas.
Once you start tapping into the wisdom of your users, employees, clients, or citizens, you can improve your performance, solve problems, and deliver change. What’s more, you will have reduced the level of opposition among your stakeholders.
Stakeholders will feel an emotional tie to decisions after sharing their wisdom and insight with decision makers. They want to be part in your decision making process.
Sharing your company’s obstacles with stakeholders will create more transparency in the makeup of your company and ultimately create a stronger and more loyal community.
The more time stakeholders invest in the decision, the more buy-in they will have and the more likely they will be to support and stand by the changes that are made.
So don’t make decisions on your own. Create a personal connection with your stakeholders right from the start. Allow them to see their ideas turn into measurable changes and decisions.
Let your stakeholders feel a sense of ownership in the decision making process.