Just When You Think They Can’t Make It Worse

jcpennylogo2014I have criticized the Board of J.C. Penney for their decisions over the past few years. (Just search the archives). However, they continue to find ways to amaze me with their decision processes. Despite my predictions, the company is still around (so you can validly question my assumptions or conclusions), but this latest decision may finally prove me right.

What decision? The choice to make a senior executive from Home Depot their new CEO. Marvin Ellison is currently the Executive VP of US stores for Home Depot. So why am I suggesting the choice is a bad one?

Two big reasons: (1) Home Depot is not really a good retailer anymore. They may be big, but that does not mean they are good at what they do. (2) And more importantly, in my experience, Home Depot’s success comes more from bullying their vendors/suppliers than it does from being a talented retailer.

J.C. Penney is in no position to bully its suppliers, so, if I am right, I cannot see how an exec from a company with that kind of culture can possibly be right for the J.C. Penney turnaround.

We’ll see, starting August 2015.


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It Seems So Simple … From The Outside In

deltaairlineslogoEvery process is perfectly constructed to produce the results it does. And I saw another example of this last Sunday and Monday.

The airline industry touts their customer focus, despite most people’s experience to the contrary. Many people who work in the industry might like to help, but the process they work in often prevents it. As Deming noted about business in general 50+ years ago.

I was traveling Monday from San Jose to Cincinnati. I bought the ticket about two weeks ago, and was never assigned a seat, which is a red flag. Sunday when I went online to check in and see if I could get an assigned seat, still no luck. In fact I got a notice the flight was over-booked and they were looking for “possible” volunteers. This prompted me to call Delta to see if they would rather reroute me from San Francisco where there were many seats available, rather than have me fly to LA and then get me stuck. The agent I talked to was sympathetic but she said that she was unable to reroute me even though the flight was possibly over-booked because their policy did not allow it.

When I got to LA, they were indeed WAY over-booked and were at $800 vouchers to try to get people to take a later flight. Unfortunately, while there had been seats from San Francisco to Cincinnati, there were none left Monday from LA.

They got me to Cincinnati on that flight, but they paid at least $800 to someone else to let me. They could have had a happy customer, who was blogging a different story, had they simply allowed me to help them help me. They would have also saved at least $800.

Every process is perfectly constructed to produce the results it does.


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If You Lower The Bar It’s Easier to Look Good

jcpennylogo2014I haven’t posted about J.C. Penney in several months, but their CEO has declared that they’re back, so I thought it might be time to chime in. I’ve had lots to say about J.C. Penney since their Board sought to reposition the store and then fired the CEO who was doing it. (Search the archives for J.C. Penney and you can read what I have said before).

The new, new CEO came in about 18 months ago to fix the mess the old, new CEO had created by attempting to re-position Penney’s. Something the Board said they wanted. Unfortunately, as I noted back then, existing customers discover the store they liked is gone before new customers discover a store they could like, so revenue, not surprisingly to me, but apparently to the Board, dropped dramatically.

Well now that the new benchmark for revenue is about $12B/year instead of $17B, the new, new CEO looks great because they are stabilized at that level. Wow, well done.

To be fair however, I have criticized the Board for returning to a strategy that they had declared failed prior to hiring the old new CEO. And the new, new CEO seems to have found a new focus for Penney’s. Their new target customer is “…multi-cultural with two little kids, too little time and too little money…”

I have no idea if this target will achieve their goal and commend them for declaring a target. If  the strategy can achieve the goal, good for them. If not, I won’t be surprised since the Board has proven, at least in my opinion, its incompetence before.


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New Baggage Policy is Amazing

deltaairlineslogoTuesday on my Delta Airlines flight from Atlanta to La Guardia I had a novel and amazing experience. I’m still not sure what’s going on, and when I queried the gate agent she simply said it was something they were “trying out” so I don’t know if it’s a pilot, an anomaly or … And I can’t find anything about it online.

The gate agent came up to me (and other passengers) and offered to pre-board our carry-on luggage that would go in the overhead bin. I had to ask twice to make sure this was not a gate check that would have my bag end up in baggage claim, or simply having them put the luggage in the under-belly and bring it up again when the flight landed as happens on commuter jets. (This was a 737 so I was pretty sure that was not what she had in mind.)

She assured me the bag would be in the overhead bin above my seat. It was. Wow, no reason to rush the gate to make sure my luggage ended up in the overhead bin. And we left early from the gate since it was faster to load the plane and thus we landed early. A win-win-win all the way around.

Anybody else had this experience?


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Tailoring To Meet Customer Needs

wegmansThis picture, supposedly from Wegmans, is an excellent demonstration of tailoring a product to meet the customers’ needs with a simple service. Well done.



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Getting In Touch With Customers? … Or An Excuse

cadillacemblemCadillac recently announced they were being split off from GM as a separate business unit. Good for them. As long as they don’t follow Saturn’s fate; as a separate business unit that is. Cadillac also announced they were moving sales and marketing to New York City, SoHo to be exact; to be closer to their target customer. Guess they finally figured out that Detroit is not really the heart of their target market.

I commend Cadillac for their focus on getting closer to the customer. However, why SoHo? Ostensibly because the SoHo resident is more in line with their target customer. Or perhaps that’s just where the VP wants to work? Really … SoHo? How many people who live in NY City drive a car regularly? In my experience, not many, and especially not many in the Cadillac income bracket.

If you want to get closer to the Cadillac target customer, an office on the Westside of Los Angeles, where everyone drives a BMW or a Mercedes, would seem to have been a better choice. But then, I ‘m not the VP who gets to choose.

What do you think?




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Blackberry Is Irrelevant … In Case You Weren’t Sure

Blackberry-logoWhile Blackberry may no longer be on the verge of bankruptcy, they are irrelevant. What a come down from the defacto standard smartphone to oblivion in a few short years. But, that’s what comes from believing you control the market. You miss the disruption, or you at least ignore it, rather than creating it. As I said in my book, It’s Not Rocket Science, “It’s better to compete with yourself, than to have someone else do it.”

In case you missed it, Blackberry introduced their new phone today. It’s called the Passport. If it matters to you check it out. I suspect it won’t matter to you or many other people anymore. Meanwhile Apple sells 10MM iPhone 6s in a week, and Samsung is continuing to innovate.


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