Former Apple Sr. V-P Now Talkative About Retail

March 13, 2012

Once reclusive as the Sr. vice-president of Apple retail, J.C. Penney CEO Ron Johnson is now talking about his retail background and Apple experience at every opportunity. During his 10 years at Apple, he gave a handful of talks in public about his job and Apple’s stores. But since taking over JCP last November, he’s been the subject of several journalistic profiles, which have all included lessons from his time at Apple. In the latest story by Fortune magazine, we now know Johnson spent his first day with Mervyn’s department store on his knees, “scraping gum and other detritus off the men’s department floor with a razor blade.” Johnson says the humble start was deliberate, to give him knowledge and experience about every level of retailing. Many of the stories he told Fortune have been revealed here at IFO before, but the profile does fill in several details about the early days of Apple retail, including conflicts with Steve Jobs.

The Fortune article begins with the writer’s all-encompassing verbal portrait of Johnson: “He’s almost cartoonishly wholesome and nice, a Sunday-school teacher, Little League coach, husband, and dad whose upbringing was pure Norman Rockwell: He grew up in Edina, Minn., a well-heeled suburb of Minneapolis, the son of a General Mills (GIS) executive and a nurse turned homemaker.” The writer concludes that since childhood, Johnson, “has had a near-messianic ability to lead people and make them feel as if they belong, as if they’re part of a great cause.”

After Stanford University and Harvard Business School, he turned down job offers from Goldman Sachs and Salomon Bros. to work at Mervyn’s. “I thought, I want to be really good at something,” he told Fortune. “I want to run a company one day, and I need to learn the business from the ground up.”

In 1990 he left for Target, and developed an interest in design while on trips overseas to scout out product trends. He met and hired designer Michael Graves to create low-cost versions of his designer products for Target, a move that shaped Johnson’s design orientation that would later surface during his time at Apple.

A recruiter invited him to visit Apple in 1999, as Steve Jobs was looking for someone to lead a retail initiative. At the time, Apple, “seemed as risky as Penney’s does today,” the article recalls. “Johnson didn’t care. He saw Jobs as a kindred spirit.” He told Fortune, “I just could tell I could work with him. And I wanted to help him fulfill his dream, which was to change people’s lives.”

But Johnson quickly realized that Steve Jobs had very specific plans for the retail stores. “He said it’ll be a store for creative professionals,” Johnson recalled. “I said, ‘Well, then I’m not coming. If you want to be a store for all Americans, sign me up.’ ” According to the Fortune article, “Johnson envisioned a place where the experience was as important as the products themselves.”

Johnson’s retail philosophy required a major change in Apple’s culture, Fortune notes. “Apple’s attitude had always reflected Jobs’ outlook: Customers should feel lucky just to own an Apple product. By contrast, Johnson wanted the stores to feel welcoming.”

Johnson flew the original 10 members of the retail team to Ritz-Carlton hotels, where they learned the hotel’s legendary customer service skills. He conceived of the Genius Bar, and persuaded Jobs to “nix commissions for salespeople, arguing that they should give customers the best advice, not the advice that earns them the most.”

According to Johnson, “You can motivate by a mission or motivate by money. The mission will work.” And to find those mission-driven employees, “Johnson devoted enormous effort to hiring: Not only did potential employees endure as many as eight interviews, but Johnson interviewed every store manager personally.”

Johnson told the reporter a story previously told, of how the original store concept had to be completely changed at the last minute. Johnson realized the store had been organized around individual products, when, in fact, organizing the store around Jobs’ “digital hub” concept made more sense. When Johnson approached Jobs to explain the mistake and the solution, Jobs was “furious.” But after pondering Johnson’s realization, Jobs agreed to the change and told his team, “We’re going to start over.”

Johnson has now embarked on a transformation of JCP, and at the same time a transformation of American department stores. The Fortune article says Johnson laughs off criticisms of his plans, and won’t admit the possibility of failure. “The only things that haven’t worked for me are when I’ve held back,” he said. “There’s no reason to sell an idea short. The only risk would be to not fulfill the dream.”

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