Ron Johnson, retail semi-legend, just gave an open palm slap to Big Data

The American business culture is often very “What have you done for me lately?” In that sense, you can argue Ron Johnson is a flop. He had big successes in the retail space, most notably with helping Target get into the designed-products arena and then with the Apple Store, but he lasted about 17 months as JCPenney’s CEO and that went up in flames. Still, anyone associated with the beginnings of the Apple Store probably deserves a chance to speak at Stanford Business School, and Johnson did that recently. It’s all summarized here but there are two aspects that stand out. Firstly:

Don’t just rely on numbers,” Johnson says. “If you rely on data, and the data’s going to drive the evidence that drives the decision, well, most companies would come up with the same approach. And, ultimately, when you have an approach that’s like a commodity, it doesn’t do very well. Most of the great businesses had a spark of innovation.”

This is refreshing to see, to an extent. Although we kind of know that generally, the C-Suite loves Big Data but doesn’t understand it, we also regularly see people preach its value in the modern age. That makes sense, because especially in the retail space, there is a ton of data on customer habits, and retail organizations should be (theoretically) exploiting that. But data can be misguided in some ways, too — have you ever seen one of those programs that tracks a user’s behavior upon entering a website? It looks like a bunch of monkeys jumped online. People click on things that aren’t links, scroll rapidly, etc. Technically, all that stuff is data. Data is imperfect because human behavior isn’t always logical, and data is imperfect because we’re not teaching it enough (or right) in terms of how to analyze it. 

Here’s the second cool section of the speech:

At Mervyn’s, Johnson asked to start at the lowest job instead of going directly into an office job at its headquarters. “I unloaded trucks for three months, and I got really fast at it,” he says. But he also learned how the merchandise got packaged, how it was on a trailer, how it was stocked efficiently, and how to make sure goods got to the floor. “It gave me lifetime knowledge, which I value today. So I can walk through a store and I see things, probably, that I wouldn’t see if I hadn’t done that.”

This is huge for me. How many people come out of Harvard Business School and say, “I’ll unload trucks?” Probably about 1 every 10 years. It is literally impossible to be massively successful unless you understand all nuances of a business (or have a ton of luck). You see this problem literally every day with something like Human Resources — they want to add value, but they don’t understand the business side as a general rule — or even in Sales/Marketing when the silos come up. If you want to be a COO-type of a company, you need to understand the day-to-day operations of said company. That might involve loading trucks. But arrogance is a big thing for people, and loading trucks is seen as more menial. Johnson even admits he fell prey to arrogance at JCPenney — so later career, but not early career. Maybe the lack of arrogance on the front side allowed him some of his success, eh?



Ted Bauer