4. Rich Domestic International E in the retail ind Effectively
lead Macys LVMH DFS GrouMyron E. Ullman ( Mike)
5. Merchandis Target TJX Co Wal-MaVanessaCastagna
6. Was know for at Barneys Federated Neiman-mAllen
Questrom
7. President A Merchandisin at JCPKen C.Hicks
8. Former Executive Brands Inc. Appointed as Executive VP Chief
HR AdministratioMichael Theilmann
9. President of Capita Financial Corp. Ranked 46th on For
Annual list of Powe Women. Appointed as a COCatherineWest
10. Background The Golden Rules (TGR) were Established in 1902,
in Kemmerer, Wyoming in USA. By James Cash Penny, in Partnership
with Thomas M. Callahan & William Guy Johnson 1907 Bought
stakes of all his Partners 1920 TGR expanded to 312 stores across
26 states. 1924 TGR chain of Stores was Incorporated as The JCPenny
Company. By 1930 number of stores Comes to 1,452 From 1907 to 1964
Continuous Growth
11. 1964 the revenue reached to US $ 2 billion which was
doubled than Revenue earned in 1951. By late 1990s the retail
scenario in US Changed 1999 Vanessa Castagna Joined as COO. 2000
Allen Questrom joined JCP as Chairman & CEO. 2004 Turnaround
achived December 2004 Ullman Joined JCP succeed Questrom March 2005
Castagne Joined Mervyns as Chairwoman June 2005 Micheal Theilmann
as Executive VP, Chief HR and Administration officer.
12. PROBLEMS IN 1990s Youth Started avoiding JCP Poor Inventory
Management Frequent Stock out of High selling Items Pileup of Non
selling goods Due to Decentralized System In Late 1990 JCPs
Financials and share prices Plummeted Cut throat competition from
Wal-Mart, Dillards and also local discounters.
13. TURNAROUND Castagna & Questrom appointed. Centralized
Buying system were Introduce Number of Products displayed in JCP
was halved Fund raised by selling DMS which sold Insurance, Travel
& Auto club. Generates $ 1.6 billion. Tied up with branded
apparel makers like Bisou Bisou. Eckerd drug store chain sold to
CVS corp. in 2004 Generates $ 4.52 Billion. Also 120
underperforming outlets of JCP were closed between 2000 04. By the
year ending Jan 31, 2005 revenue was $ 1.84 billion.
14. Role of Ullman The Associates are the first Customers we
sell to.If it doesnt ring true to them, its impossible
tocommunicate and inspire the customerObjectives was To take JCP
from the Position ofTurnaround to that of a leader in
IndustryAccordingly the Long Run Plan Established.
15. Problems Identified Formal and Rigid organizational
culture. Employees are not Froward Thinking Work culture in JCP was
Intimidating for New Recruits.
16. VISION TO TAKE JCP TO INDUSTRY LEADERSHIP LEVELWith the
help of LONG RANGE PLAN whichconsist of Emotional Connection with
Customers Make JCP an Easy and Exciting place to shop Make JCP a
Great Place to work in. Make JCP a leader in performance and
execution.
17. WEAKNESS STRENGTHS Formal & rigid culture Survival of
More than 100 years No Inflow of new Talent Good Penetration in
terms of Store Employees negative mind frame number Rules of HCSC
only for Top Good Number of Employees. Management. Latest
Turnaround in 2004. People work for people not for Company. SWOT
OPPORTUNITIES THREATS Opportunity to Satisfy Employees Wal-Mart as
Giant retail agent Harnessing potential of JCP in terms Mall based
Dillards of Revenue, Humans Resource etc. Discount Stores High End
department stores Not to destroy a century of Corporate
Tradition.
18. NEED FOR CHANGE Formal and Rigid Organisational Culture
Personalisation of work environment like Decorating Cubicles was
not allowed. Office Police Most new recruits had to start there
career behind a cash register. Youngster were intimidated by the
rigid culture of JCP Employees mood was not good. High Employee
turnover. Cut throat competition.
19. A BIG CHALLENGE Changing a Century old culture was a Big
Challenge The Culture was deep rooted and had been reinforced
Decade after Decade. HCSC was applicable to only top level
management. A sudden change would be a shock and create distrust
among employees and management. Many employees as old as Penney
said This is a phase, and it will pass and we will go back to the
way things were.
20. INITIATIVE In 2005 Theilmann was appointed as Chief HR
First Campaign started Just Call me Mike Dress codes were relaxed
Office Police team was disbanded. Various art work on the wall
replaced with photos of employees and other art related to the
company. New ID Badges were provided with First name. It allow to
access the other part of the company. HCSC modified to WTP to suit
all Employees. 2006 1st leadership conference for store managers
conducted. Fall of 2005 JCP conducts 1st AES.
21. Training and Development In 2006 JCP started Identifying
High potential Employees (Hypos). Hypos were sent to The Retail
Academy run by Ken C. Hicks Even Ullman & Theilmann acted as a
Faculty members and Devoted around 164 hrs of Teaching. In Feb 2007
many training program were launched like Leading a store, Leading a
District, etc. Developed online Training System Early 2007 JCP
opted for a new Brand
22. Every Day Matters My goal is to never walk around here
looking like Iam upset about something. We have greatopportunities,
every day, EVERY DAY MATEERS -- Ullman -
23. JCP FIRES NEW COO Dec 2006 JCP Fires its COO Catherine
West. No reason was cited initially . Total Tenure of West was 6
months. US $ 10 million was paid as Severance pay. This Hammered
home the fact that there was no Honeymoon Period for High level
executives. Reason cited to the securities and exchange commission
JCP said that Due to her failure to satisfy performance
objectives.
24. RESULTS Within 2 years the changes started to Bear Fruits.
2nd AES had a response of 73% as compared to 67% for 1st. Graduates
from Leading Professional school such as the fashion institute of
technology, Texas A&M etc.. desired to work in JCP Even Bottom
line improved, operating profit for fiscal year 2005 was US $1.6
billion an increase of 22.5%. Opened 18 new stores, highest number
of stores opened in a year for a decade.
25. If not, they are clerks.We are rebranding the company
because of ourservice. We are running nice advertising, but itwasnt
building on its self. They (Employees) needto have the tools and
the wherewithal to makedecisions. If not, they are clerks. --
Ullman -
26. Questions to be Answered
27. Question 1Do you think JCPenney was justified in
appointingMike Ullman, an outsider, as CEO instead ofVanessa
Castagna, considering that Castagna wasinstrumental in turning
around JCPenney in theearly 2000, soon afterward Castagna left
thecompany?What are the pros and cons of bringing in anoutsider and
Promoting from within?
28. BRINGING IN OUTSIDERPROS CONS New Talent & Ideas Will
Take time to New Strategies understand the Experience from other
process Organisation. Training Program No Personal Bias
29. PROMOTING WITHINORGANISATIONPROS CONS Motivation to
Personal Bias employees May use their power No need for training
against employees He know the working Other colleagues environment
demotivated Attitude of Employees
30. Question 2Generally, we see companies that are in trouble
ornot performing up to expectation opting for a culturechange
initiative to invigorate their corporate cultureand bring about a
turnaround. In thiscontext, comment on Mike Ullmans decision
tochange the century old culture at JCPenney after asuccessful
turnaround.
31. Question 3 What role does corporate culture play in company
performance? Will the culture change initiatives instituted at
Penney help it achieve the goal of reducing turnover of existing
employees while attracting new talent from outside?
32. Question 4 Some analysts described JCPenneys shift to a
more informal work environment(using first names, etc.) as putting
the cart before the horse. Comment would this change make you want
to work at JCPenney? give reasons for your answer.
33. Question 5 Some analyst opined that culture changes driven
from top, where as, other say that it is the system that drives
change, not the top management. Give your comment with
reasons.
34. Question 6 What lesson can we learn from the high profile
firing of JCPenneys COO Catherine west within 6 months of her
joining the company Do you think it is worth while recruiting
people from other industries in high position? Is switching
industries a good option for a professional who is on a growth
curve in his/her career in a particular industry?
35. High Profile executives Exit in 2006Executives Designation
Company Exit inAnne Stevens COO Ford Motors Co. 11 monthsCatherine
West COO JCPenny 6 months Sears HoldingsCraig monaghan CFO 6 months
Corp.Denise Johnston President of Gap adult Gap Inc. 9 months
Senior Vice President -Julie Roehm WAL - MART 10 months Marketing
President & ChiefLawrence Jackson executive of Global WAL -
MART 11 months Procurement Adobe SystemsReandy Furr CFO 6 months
Inc. Vice presidentSean Womack Communication WAL - MART 10 months
architecture Executive VP of About 1
36. Question 7 What are the lesson to be learned from the
JCPenney culture change initiatives? What do you see as key
components in its having achieved its goals, atleast in the near
term? How can JCPenney keep the momentum of change rolling in its
favor in the future?