Ullman’s situation today is eerily similar to our 2004 meeting, but now even more is at stake. He left J.C. Penney in decent condition when Ron Johnson took over in 2011, but there’s no guarantee that he can turn it back around after its sharp decline under Johnson’s tenure. By returning, Ullman threatens his own legacy. Why come back to a poisoned well?
Ullman’s years at the department store kick started some innovations, such as bringing in brands like Sephora, but more than anything he simply kept the helm steady. So the board’s decision to bring him back, even on a temporary basis, has shocked many.
Yet in my opinion, it’s the wisest move they could make.
Johnson’s spectacularly failed approach — which was hailed just over a year ago — underscores how mistaken our assumptions about leadership really are. We pay too much attention to the dramatic flourish and too little to mundane management. We need less shine, more substance.
The board brought on Johnson initially to try to bring some of Apple’s sexiness to the dowdy department store. Johnson exuded youth, charisma and coolness. Ullman’s experience came from legacy institutions like Macy’s, Johnson’s from hip retail icons like Target.
Initially, Wall Street fawned over Johnson’s strategy of everyday low prices and wooing trendy brands to the store. But within weeks, the approach proved to alienate loyal customers while never bringing in new ones, leading to month after month of compounding losses. Under Johnson’s leadership, revenues fell almost 25 percent, Penney’s stock lost 50 percent of its value, and losses totaled nearly $1 billion.
Ullman’s leadership style, on the other hand, is the sort of quiet, stable approach that doesn’t draw much attention but that puts in the time to create something of value. I studied him over the seven years he led J.C. Penney and observed that, while some lead by walking around and others by issuing directives, Ullman leads by being present. A hallmark of his tenure at Penney’s were the two-day seminars he personally ran for small groups of managers throughout the year, giving leaders at all levels of the company direct access to him.