Who Wrecked J.C. Penney? From D Magazine Featuring Jack Smith of Sanford Rose Associates – Milwaukee
Dallas, Texas, 10/21/2013
By Joseph Guinto, from D CEO NOV 2013
Hedge-fund investor Bill Ackman was a chief culprit in Ron Johnson’s disastrous tenure as CEO, it’s clear. But thanks to a leadership vacuum on Penney’s board of directors, others were responsible for the debacle as well.
On August 12 of this year, Bill Ackman, a silver-haired hedge fund billionaire, sat in front of remote-controlled cameras in the black-backdropped studio where PBS’ Charlie Rose show is filmed and quietly began defending himself.
Ackman, a 47-year-old New Yorker, had acquired a $900 million stake in Plano-based J.C. Penney Co. Inc. in 2010 and gained a seat on the company’s board. Then he aggressively pushed the iconic, 111-year-old department-store chain, founded in 1902 by the son of a Baptist preacher, to radically reinvent itself. Ackman urged his fellow board members to oust longtime CEO Mike Ullman and to replace him with Ron Johnson, the savant behind both Apple’s Genius Bar and the computer company’s sleek retail stores.
(The story continues.)
“Strategy and planning get tweaked all the time,” says Jack Smith, president of Milwaukee-based Sanford Rose Associates, an executive search firm. “But it is very rare to have a reengineering on the scale J.C. Penney undertook when the company has been so steady. And it is even more rare to find that this kind of reengineering was being pushed primarily by one person. It suggests that there was a vacuum of leadership on the board. If they had a clear idea and direction of where to take the company, how could one person steamroll them into going along with something so radical?”