J.C. Penney’s CEO on Listening to Front-Line Employees


After the previous CEO of JC Penney, Ron Johnson, was fired (see my post “Lack of PDSA made JCP CEO SOL?“), it seems that new CEO Marvin Ellison might be taking a different approach.

See this article from FORTUNE: “The CEO Who's Reinventing J.C. Penney.”

Whereas Johnson “just thought his ideas were right,” Ellison appears to test ideas:

He ran a test to see whether men's shoes would sell faster when showcased next to, say, men's suits; once the data showed that they did, he instituted that change last summer across the company's 1,000-plus stores.”

It does make me skeptical, however, to hear about any CEO being so involved in operational details like this. Is it the job of the CEO to propose and run tests like this or to create the culture and environment where employees and managers can test improvements?

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Ellison does seem devoted to a somewhat more scientific improvement process:

“He's a data devotee who grounds every decision in information–including that seemingly intuitive shoe move. “Pure intuition without any data gets you in trouble,” Ellison says. Referring to the Johnson era, he adds, “We went through 18 months of that, and we're not going to do it again.””

Ellison learned the importance of store operations by working as a retail security guard during college:

“Ellison's retail career started during college, almost by accident. To help pay for books and rent, he took a part-time job as a security officer at Target at $4.35 an hour. That gig turned into 15 years at the retailer, as he climbed the ranks in theft prevention. Those early jobs gave Ellison a close-up view of how retail works at the store level, everything from the cadence of markdowns to the science behind keeping shelves stocked. But the jobs also taught him something that would shape his management style: Too many managers don't listen to the troops on the frontlines, the workers in stores. Ellison had tons of ideas but didn't share them with managers, he says, because they wouldn't ask.

This is true, sadly, in healthcare as well. Too many managers don't listen to their employees and employees don't speak up because managers aren't asking them to. Leaders are responsible for creating a culture where it's safe to speak up. Leaders are also responsible for helping employees take actions on their ideas, such as in the practice of Kaizen.

Also from the article:

“Too many CEOs in retail like to be the smartest person in the room,” says Home Depot co-founder and former CEO and chairman Bernie Marcus. “Marvin's not like that.”

Is that also true too often in healthcare, with CEOs wanting to have all of the answers?

The article describes how Ellison observed details in stores:

“Face-to-face interaction helped Ellison quickly spot disconnects between Penney's executives and its store employees. Early on, he was irked to see senior management in stores wearing designer clothing far beyond the budget of a typical staffer or customer. A snappy dresser himself, Ellison implemented a rule requiring executives to wear J.C. Penney-made clothes when they visit stores and to wear the same name tags store workers do. (During the Frisco store tour, Ellison and the executives all wore Penney brands–Ellison and the other men in Michael Strahan and Stafford suits, a woman colleague in Worthington.)”

The idea of leaders wearing what their employees wear is interesting to me. Compare that to the gap between healthcare leaders wearing business suits and their employees wearing scrubs…

One other such disconnect from JC Penney:

“Senior management frequently felt that stores were sufficiently stocked, but in-store employees were constantly alerting Ellison to shortages.

JC Penney has long been on a path toward becoming irrelevant and bankrupt. I hope Marvin Ellison can right the ship through his leadership. I wouldn't necessarily call it “Lean leadership,” but there are elements here that remind me of that:

  • Going to where the front-line workers are
  • Encouraging people to speak up
  • Leading small tests of change before rolling out a change widely
  • Reducing some of the power in hierarchy by dressing more like employees

What do you think?

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


  1. Mark, thanks for sharing this piece about JCP’s new CEO. He’s certainly onto something with leading by example and narrowing the gap between executives and the front line.

    Is his technique truly “Lean”? Maybe not yet. But I like to think his process will reveal strengths and weaknesses in his own methods which is important for any leader to pay attention to. If he’s fully committed to the mission he will seek out help in improving HIMSELF, which hopefully takes him down the path of landing a great coach that shows him how to develop a Kata-esque system throughout his organization.

    Do you think the Kata is right for everyone, regardless of how mature they are in their Lean thinking? Or is it an advanced methodology that requires some “getting your hands dirty” first?

    • I think Kata is “right for everyone” if they are willing to try and they have somebody coaching them. I think Kata is more of a foundational building block (as is Kaizen or PDSA, etc.) than it is an “advanced methodology.” You get your “hands dirty” by giving it a try, right?

  2. You certainly learn a lot quickly by trying it. One thing I’ve witnessed people learn is that they have no idea how to coach (or be coached). If the minds are open, this is an opportunity to refocus “training” activities with outside help. Or at least regroup internally and address the uncovered need. I like that you consider it foundational – that doesn’t seem to be the consensus in my experience so far. Do you find that the tool-based approach sold by so many “Lean programs” skips over Kata because it’s more difficult to sell it than to teach it?

    • I don’t think it’s hard to teach per se… but many of us in the Lean community were trained in an era long before the term “Kata” became known or popular.

      So, some of it might be stubbornness or a lack of continuous improvement on the part of those who teach or coach on Lean.

      In the upcoming 3rd edition of “Lean Hospitals,” I worked with Mike Rother and Michael Lombard to include some material on Toyota Kata practices, so I’m trying to evolve :-)

  3. Insightful observations, Mark, about a CEO who’s facing many challenges. Listening to and involving employees is a great start, especially when customer service can make or break the in-store experience. Interesting about the hair salons, which may turn out to be one of the company’s few competitive advantages.


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