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Two Stories Every CEO Should Read

The two stories on J.C. Penney that every CEO should read.The two stories on J.C. Penney that every CEO should read.
The two stories on J.C. Penney that every CEO should read.Spencer Platt—Getty Images

The cover story in the March issue of FORTUNE magazine, which we release this morning online, is Saving Penneys by Phil Wahba. It’s about CEO Marvin Ellison’s effort to rescue the iconic but struggling department store. Every student of business should read it, and then go back and read Jennifer Reingold’s story from two years ago about prior CEO Ron Johnson’s effort to do the same.

Together, they capture the eternal tension in business between inspiration and perspiration, vision and data, strategy and execution.

Johnson, who got the job in June 2011 at the urging of activist Bill Ackman, came from Apple (AAPL), where he helped build the company’s phenomenally successful retail arm. He fashioned himself as a charismatic leader, bent on radical change, determined to make “JCP” a cool brand. He shared the Steve Jobs phobia of surveys and focus groups – customers “don’t know what they want until you show it to them,” as Jobs famously said. He undertook an aggressive remake of the stores that alienated customers, caused sales to plummet by a third, and left 40,000 out of work. In the spring of 2013, Johnson was ousted by the board, which brought back the previous CEO Mike Ullman.

Ellison is a different sort of leader. He grew up as one of seven children that sang as a gospel group in clothes they bought from JC Penney (JCP), and he started as a security guard at Target (TGT) for $4.35 an hour. He is a living embodiment of the adage that “retail is detail,” walking the store floors and repositioning merchandise to elicit more purchases from existing customers. He requires all his executives to wear JC Penney merchandise on store visits, to better identify with their customers. “We can convince ourselves that our core customers are a more affluent demographic,” he says. “But really, they are not.”

The jury is still out on whether Ellison will get the job done. But his journey, and the last decade’s journey at JC Penney, is a fascinating case study worth following.

Meanwhile, Donald Trump trounced his opponents in the Nevada caucuses, moving one more step closer to the Republican presidential nomination.

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