When I was reading the story of how the JC Penny rebranding was a total disaster, I was shocked. It seemed like a no-brainer when the new CEO, Ron Johnson, formerly of Apple, decided to use principles of the Apple store and apply it to the established, old retailer that lay in waste somewhere between Wal-mart and Target but his ideas, touted as brilliant by every business commentator, fell flat, and for the oddest of reason — the customers didn’t like it.
Activist investor Bill Ackman, J.C. Penney Company, Inc. (JCP)’s largest shareholder and the original supporter of Johnson’s appointment to JCP, called Johnson’s time at the retail chain “something close to a disaster”
According to Ackman, Johnson didn’t need to change the company’s business model, and one of the biggest mistakes made under Johnson’s time at the company was “too much change too quickly without testing what the impact would be.”
Quite a different opinion from when Johnson started his 16 month stay at the top of Penny. There was excitement at the previews of the new Penny and the media, as well as all business commentators were formally onboard for changing the retailer who had become the punchline for jokes about anything old and ridiculous. Johnson’s ideas were sound. Although Mr. Ackman mentioned “testing” for impact, there was testing and it was successful, ergo the excitement mentioned among the buzz-makers.
Johnson, was used to owning as much of the pie as possible. Apple had a market share that would never decrease. All they had to do was put out another product, good or bad, with a new sequential number and sales numbers would go up. Penny’s was not Apple products.
The idea was brilliant. Update, invigorate and own the biggest piece of the pie… or at least the old piece of the pie but with a little more each quarter. Johnson went big. He wanted the Apple Store model, which is great for a store that has a couple dozen products and floating sales/help/checkout people who can be handed the correct box. Try that in a department store. The basic model hasn’t changed since they started. Still he was creating buzz for JCP, the new, hip, not-your-great-great-grandmother’s-store. With that, the mistake took place. The JC Penny’s customer had to die off while the JCP customer had yet to be born. Time was the enemy of this innovative idea, but, it had to be done before Penny’s 300th anniversary.
Support was also needed. Support from marketing, advertising as well as inner-store changes with merchandising, display, flow, etc. Try that on a major scale and then exilian that it will take time. Then some more time, all the while, everyone stays in 100% support positions. In the end, it was ultimately the JC Penny customer that killed the idea of updating to the JCP customer. It was the new JCP customers that didn’t bother to stop the stabbing into the corpse as they just weren’t there.
I suspect something of the NEW wasn’t in step with the rest of the support team and showed the new customers old things and old customers new things. It happens that way, sometimes.
Why Ideas Fail
In fact, Scott Berkun, author of MINDFIRE, Big Ideas For Curious Minds, writes in his blog a list of reasons, gathered at a 2011 FOO camp, on why great ideas fail:
- Killed idea too soon
- Stayed with idea for too long
- Death (of person with the idea)
- Not knowing target audience
- Not willing to experiment to find audience
- Unwilling to change direction
- Willful ignorance of economics
- Unable to overcoming organizational inertia
- Not understanding the ecosystem the idea lives in
- Inability to learn from microfailure
- Fighting the last war
- Giving up
- Chindogu – solution causes more problems than it solves
- Factors beyond anyone’s control (market, wars, competitors, natural disasters, etc.)
- Failed to pitch or communicate well
- Not taking the idea far enough
- Taking the idea too far too early
- Underestimating cultural limits
- Underestimating dependencies
- Failure to balance how world is vs. how world can be
- Failure to balance wants vs needs
Unfortunately, most projects to instal a great idea will suffer from, or have at least burning questions of at least half the items on the list. With Penny, considering what we now know, which things do you think did them in? Have you been in the same situation with a business innovation?
What Tripped You Up?
Mr. Berkun’s blog entry also contains a specific list as to why attendees at the camp had great ideas that failed:
- Forcing something on people they don’t want
- Not controlling distribution (e.g. Tivo vs. Comcast DVR)
- Not doing post-mortems
- Not eating our own dogfood
- Building something ‘powerful’ but too complicate for the average user
- Force change earlier. It won’t happen on its own.
- Launching a product before it’s ready – unreliable performance
- Not killing a project/startup faster (i.e. spinning wheels for an extra year instead of getting it out the door)
- Trusting before researching
- Not trusting my gut
- Not considering political capital within a large organization
- Trusting my gut too much
- Juggling between being your greatest supporter and your greatest critic
- Voice version of twitter circa 2005
- Built an Airbnb before Airbnb, but didn’t see it through
An interesting list. Both are, really and if one looks at the matching problems from both lists, the reoccurring important messages are:
- Ideas are killed too soon and allowed to live long after they deserved to die
Well, that narrows it down. If you think about it, however, it is the bare bones of a failed idea cadaver.
I’ve worked for some very large corporations that were under the constant pressure of leading the industry. Some did it better than others. Some failed and keep on failing. The bare bones naturally ruled the initiatives these companies took but, in my personal experience, I have to share my observations on some million dollar bumbles and fumbles.
What Was the Thinking?
While working for a major, global magazine, it’s announced that the president of the publishing division wants to trash the brand and readers of one of the oldest magazines the company has and replace it with a new look, new content and a whole new readership. The first question, aside from why change something that’s still making a profit, has an entrenched readership and has no weaknesses, was how would the corporate decision makers approve such a plan? The rumor was, they hadn’t and the “relaunch,” as it was called and cursed at, took place quietly on a “need-to-know” basis.
The existing and new target audiences were light years apart. Different ends of the entire spectrum, to be exact. Fear started generating alternate ideas from employees NOT certifiably insane:
- Create a separate publication as A/B testing to see which audience rises and falls over a one-year period
- Fire all staff and contributors and start from scratch
That second suggestion was from the executive running the project. People fell into line after that came up, which removed any voices of question when a questionable turn was about to be taken. There should always be a side of doubt that has to be considered when charging forward, as this project did, based on the personal opinions of one person.
Through a couple of uncomfortable years of planning… poorly… the new publication was “relaunched” (another internal joke was that we were relaunching something that was never out of the picture and the New version wasn’t that different) with planned big hoopla from the press. The internal jokes were baptized by the spittle spewed forth by the screeching mouth of the idea person, onto our faces. The reasons why it all failed stood in front of us, demanding to know why the idea failed. Ever since then, I carry a small mirror with me at all times, so when something like this demand for sacrificial lambs comes up again, I can just take out the mirror and hold it to the person responsible.
The “new” magazine, known by its boring, failed new cover, lasted about a year until, after some expensive testing, it was proven that the falling sales were due in part to the cover changes. The other changes were pretty much irreversible and after a few more badly thought out “shark jumpings,” the executive left the cushy position to, “explore other options,” as the corporate press release put it.
We all said in unison, upon hearing the news, “FIRED!”
With another corporate entity, they held onto their ancient history as the way they do business and make their products. Only, they didn’t really. Most of their mission statement truths were whittled down to the family-owned business staying just that, as the brains were removed slowly through selective breeding techniques.
Although there was a call for massive innovations, employees started to believe it was more for the press than the actual product. Like many companies, this one preferred to have a competitor do the actual work and slog through market introduction. If the idea worked out, they would just copy the idea with “slight differences” and hope to steal enough of the pie to make it work.
That’s how it seems to be these days. Commercials, products, movies, cars, TV shows and just about everything else is a copy of something. Somewhere there are people who truly believe a great idea is to copy a great idea.
Top 25 Biggest Product Flops Of All Time
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