There was a recent article in the Wall Street Journal: “Big Retailers Find It Hard Shopping for a CEO”. Most Boards of Directors faced with embarrassing circumstances surrounding recently terminated CEOs claim that they are now searching for “transformational leaders”, even though most of the time they have no idea of the profile of that silver bullet executive.
Often the CEO that was recently fired like Ron Johnson who totally mismanaged JC Penney was touted as their “silver bullet” when hired. Five CEOs in five years were to create the “New GM”? Target’s CEO was bounced for a variety of expensive mistakes, the worst of which was their disastrous foray into the Canadian market which continues to bleed.
Hewlett Packard and Best Buy brought in foreigners to be their silver bullets. The German CEO at HP created a mess and was fired shortly after his arrival, and the French CEO at Best Buy hired in 2012 with no industry experience is struggling. A recent news item explained that the company lawyers just got him a green card? Foreigners with foreign cultures managing Americans?
The list goes on and on. The weird thing about all of this is that studies have proven that silver bullet CEOs brought in from other industries where they were successful do not work out well. Why is this?
The most obvious reason is that strategies that work in one industry usually cannot be overlaid on another completely different industry. Case in point – JC Penney, Johnson tried to Apple-ize Penney. It could not possibly work, and it didn’t!
The more obvious reason is that the culture that created the brand in any company cannot be changed overnight, or for years for that matter. The situation at GM is the best example of all, the people that created the dysfunctional culture of the old GM are still working in the new GM – so how can it be new?
Where does the fault really lie? With the Board of Directors who don’t seem to “get it” either. All they seem to want to do is to pass the buck to another “star” to whom they offer a ridiculous compensation package and a situation where they are destined to fail.
Unfortunately, the victims of these misguided decisions are the shareholders, the customers, and the employees. 19,000 employees lost their jobs at JC Penney during Johnson’s brief 15 months as CEO.
Who is going to take over and destroy another well known brand?