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passion. It is about profitable results.”

~Lior Arussy

J.C. Penney Co. – Start With People

Posted: Apr 17, 2013 by Lior Arussy

The Wall Street Journal today reported on the low employee morale inherited by J.C. Penney’s returning CEO, Myron “Mike” Ullman, after the chain slashed its workforce by tens of thousands over the past year. Retail is not just a business of merchandising and discounts, as it has been portrayed by the media in the last week since the department-store chain ousted its former chief executive Ron Johnson. Retail is a people business as well, which Mr. Johnson clearly did not understand.

Creating a new retail platform, as was attempted with the “JCP” branding platform, requires the organization to lean on its brand ambassadors. If the transformation from J.C. Penney to JCP was executed as I’ve seen so many in the past, regardless of executive’s intentions, it probably sounded to employees as “Everything you have done so far was wrong, this is the new right.” Or perhaps, “Even our name is old an outdated, so we’re changing it.” Even without thousands of layoffs, a poorly planned and executed transformation will quickly create low employee morale. Now imagine the thousands and thousands of employees who face customers every day. What expression do you think they have on their face? How keen are they to help their customers? What is their attitude towards confused customers who are looking for a discount?

J.C. Penney must focus on its people first. Every day, its 116,000 employees are making decisions that will amount to its brand equity. Every organization’s brand equity is equal to the sum total of their employees’ decisions both in front of the customer and behind the scenes on behalf of the customer. If employees are enthusiastic, passionate and caring, customers will make purchases. People do not buy from cynical uncaring employees. (Check out www.cynicismkills.com.)

The human factor is the most elusive and challenging in every corporate strategy. The good news is, if you unlock your workforce’s energy, they will not only meet, but exceed, your customer’s expectations. Here are my best, most heartfelt ideas for Mr. Ullman:

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