If you're the type to follow the business world, you know the name Ron Johnson. Ron is the recently ousted CEO of JCPenney. Mr. Johnson made a name for himself at Apple Computers, pioneering such things as the Genius Bar. As we know, JCP has been going through really tough times lately. And it was Johnson's success in retail that got him hired on as the top dog. Unfortunately, his tenure lasted only 16 months. So, what went wrong?
I
have a brother who works for JCPenney. He isn't a board-level
executive, or corporate officer, and I don't pretend to know
everything. However, it was really interesting hearing the news
reports and comparing them with the things my brother had to say. In
the end, the moral is a story we all need to hear over and over
again. It's all about the inevitability of change.
You'd
probably agree that people dislike change. While resistance to change
causes a lot of problems and heartache, it's a completely
understandable phenomenon. The reason we don't want things to change
is because resistance is hardwired into our brains.
Psychologists have identified something called the Status Quo Bias.
This notion, that we value what we have more than what we could have,
has been repeatedly confirmed in the lab. People value what they have (the
status quo) roughly twice as much as what they could have. In turn,
this creates tremendous resistance to change.
Resistance
to change appears to be at the heart of Penney's problems. According to Columbia Business School professor Rita McGrath, JCP's real problem is the shrinking middle class. The
solution, which is admittedly easier said than done, is to adapt, to innovate. Penney's hasn't kept up
with the times and they're paying for it. The good news is, we know we can build a
culture of innovation because lots of companies are doing it. And
they're not just companies in the Silicon Valley. I'll give you one
example and it's a company that is older than the one created by James Cash.
General Electric began in 1892 while JCPenney was founded is 1902. Is it
inevitable that all companies eventually die? Perhaps. But GE is a
marvelous example of how to stave off decline. The main reason for
GE's continued success is the brilliance of their organization. Woven
into the fabric of General Electric's DNA is a culture of innovation
and leadership.
If
you go to Crotonville, NY you will find the GE Management Development
Institute. This is where Jeff Immelt, and his
cohorts, develop their next generation of leaders. In fact, it's
where Immelt himself was developed. GE invests a lot of time and
money into teaching and education. And they don't mess around. They
bring in the best of the best. People like Peter Drucker, Noel Tichy,
and Vijay Govindarajan. It's a great idea to stretch people and
provide them with the best learning opportunities. That's what I try
to do on this blog.
Anyhow,
General Electric is constantly evolving and innovating while JCPenney has largely rested on its laurels. There's a dictum which
says, “Evolve or die,” and I think it's excellent advice. In
fact, in a later post I am going to spell out EXACTLY why evolution
is such an imperative. I'm actually going to break it all the way
down to thermodynamics. It's going to be really cool!! :)
Now,
I know I'm talking about big businesses in this post. But I hope you
understand this message is really about YOU. What we need to remember
that the only constant is change. The world doesn't stand still very
long. I'm not saying you should change just for change's sake. I'm
saying there does come a time to evolve. And, I want you to understand
that resistance to change is hardwired into your brain. We're all
fighting an uphill battle.
But,
psychologists can help lead the way. I mentioned something called the
Status Quo Bias. Notice it's not called the Status Quo Rule or the
Status Quo Law. It's just a bias we all have, and we need to be aware of
it. Once we're aware of the bias we can overcome it. Remember what GI
Joe used to say? “Knowing is half the battle!”
Each
of us have all sorts of cognitive biases floating around in our
heads. Perhaps I'll delve deeper into the Status Quo Bias in a later
post. Let me know if you think that would be helpful. One of the keys to change is new information. If you don't know
any better how can you act any better? Well, that's why I expect you
to visit this blog often. You will always get great information here.
