Major strategy shifts need time to play out. Customers have their habits, employees are used to doing things a certain way, and fine-tuning a plan takes time in the market.
But what if you don’t have the luxury of waiting years to know if your strategy really is working?
“The question…is whether the strategy is flawed or whether we just haven’t given it enough time to take hold with customers,” says Harvard Business School senior lecturer Jill Avery, who wrote the fictionalized case study discussed in this episode—loosely based on Ron Johnson’s tenure at JC Penney.
In the case, a fictitious struggling retail chain is attempting to attract younger customers and boost its declining revenue, but early results aren’t good. Now the Board is pressuring the new CEO to walk back his changes, and he’s arguing that short-term losses are necessary to unlock longer term profitability.
“This is a retailer in trouble, as JC Penney was at the time of Ron Johnson’s tenure there. And radical change is probably necessary to turn these retailers around,” Avery notes. “[But] how much leeway do we have both financially and strategically to see our decisions play out over a multi-period time, to see if they’re actually working?”
If you’re struggling to make strategic decisions and accurately assess their success, this episode is for you.
Key episode topics include: strategy, customer experience, pricing strategy, strategy execution, retail and consumer goods, rebranding, experiments, change leadership, Ron Johnson, JC Penney.
HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.
· Listen to the original HBR IdeaCast episode: Case Study: Reinvent This Retailer (April 2015)
· Find more episodes of HBR IdeaCast
· Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org
