Power Sheet – February 25, 2016
I love learning about an inspiring leader I’d never heard of, and I just found a new one: J.C. Penney CEO Marvin Ellison. Fortune’s Phil Wahba profiles him in our latest cover story, and I suspect you’ll enjoy meeting Ellison as much as I did. He faces a giant challenge, which is often the kind that good leaders like best – in this case, restoring Penney to vibrant health three years after its near-death experience under former chief Ron Johnson, who had been in charge of Apple’s smashingly successful retail operation and brought sky-high expectations with him. He ended up creating the retail version of New Coke, throwing out the old formula and creating a new product that customers hated. The board brought back former CEO Mike Ullman to rescue the company, and last year Ullman turned the job over to Ellison.
His story is irresistible. He’s one of seven siblings who grew up in a financially struggling family, African-American in Brownsville, Tennessee, a town that remained segregated into the 1980s. His father was a voracious reader who worked two or three jobs rather than accept public assistance, modeling classic virtues for his kids. Marvin began his retail career during college as a security officer at Target making $4.35 an hour. By age 43 he was a top executive at Home Depot. That’s where Ullman found him in 2014.
Whether Ellison can restore Penney to its former glory is an open question; there are some jobs that nobody could do, and this may be one of them. Sales last year were an estimated $12.6 billion, nowhere near their 2006 peak of $20 billion. Sales per square foot ($155) and number of active customers (87 million) are also way below their peak.
But I got a good feeling about Ellison’s chances when I read a detail from his Home Depot career. He launched a weekly feature on the chain’s internal TV network, and instead of using the usual snooze-worthy model of a guy in a suit talking, he showed stories of employees doing great things for customers. As former CEO Frank Blake told Wahba, “They provided a ‘Wow, that’s amazing’ element to work so that people could see how impactful their work could be… It makes the associates stars.” That’s brilliant leadership for at least three reasons. First, we know that stories affect us more powerfully than all the facts and logic in the world. Second, stories about individual employee behavior create a company’s culture, and we live in an era when culture is more critical than ever. And third, those stories show employees something they might not believe if an executive told them, which is that the company’s fate really is in their hands.
Ellison’s to-do list is massive. He’s trying to fix such retailing basics as merchandising and supply-chain management while also trying to update the store’s app and e-commerce operations, which are behind the competition’s. I can’t predict how it will go. But Ellison is only 51, and he’s a leader I expect to be watching for quite a while.
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|Produced by Ryan Derousseau|