Back in February in a discussion article on RetailWire, Nikki Baird, managing partner at RSR Research, wrote that new J.C. Penney CEO Ron Johnson had forgotten a “P” (people) when planning the reinvention of the department store chain.
In short, Ms. Baird argued that the chain’s store associates were basically divided into two disciplines, “cashiers and price taggers,” and neither had the personnel skills required to offer the level of assisted selling needed to make the new Penney work.
Another piece, written last month by Jennifer Rooney, CMO Network editor at Forbes, recalled a shopping experience in a Penney store where an associate appeared “deflated.” Ms. Rooney posited that the retailer needed to target more of its marketing efforts in-house and get its own people to share in management’s vision of “reinventing” the department store.
Now, let’s move to last week and Penney’s announcement that it is laying off 1,000 employees. Six hundred are being let go at the company’s headquarters (about 15 percent of the workforce there) and another 400 are being cut from a call center in Pittsburgh.
Penney’s announcement doesn’t come completely out of the blue. In January, the company said it planned to cut expenses by $900 million by the end of the 2013.
“Often in business, companies must streamline in order to leap forward,” Mr. Johnson said in a statement. “In our case, this has involved some very difficult decisions that have had an impact on many of our associates, but these changes are essential to help us achieve our long-term goals and, ultimately, grow our associate base as we grow our business.”
Mike Kramer, chief operating officer at Penney, said, “It’s clear that many of the processes required under the old business model are no longer needed. We are putting in place a new operating structure that creates a winning organization built on efficiency.”
There are a number of schools of thought when it comes to change management in organizations. All acknowledge that change is hard and seek to find a process where organizations come out stronger in the end than at the tumultuous beginning.
But, with all its grand planning, has J.C. Penney forgotten its people again? Does a culling at the level that the department store has announced so hurt morale that employees start looking for other job options instead of focusing on making Mr. Johnson’s vision a reality? I can’t provide an answer with total certainty, but I can say that solid turnaround plans have failed in the past because employees didn’t buy in.