Growth September 12, 2012 Last updated September 18th, 2018 2,110 Reads share

Learn Before You Leap

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Back when I was at Procter & Gamble, and had made the difficult decision to leave P&G to move to Microsoft, John Smale, the retired CEO of P&G, gave me some good advice. 

In discussing my move he said, “You’re going to believe that how we do things here at P&G should be the way they’re done at Microsoft. Hold off those thoughts and instead try to understand why they do what they do. And only start making changes once you’ve thought through both sides.”

Invaluable advice

That turned out to be invaluable advice. It didn’t take long to realize that the technology industry was very different from consumer products.

  • You couldn’t test anything in a local region.
  • Also, the incredible speed of improvement of the underlying technology meant that your business decision making had to be very efficient.
  • No fancy memos or lengthy written proposals; lots of verbal communications and brief e-mails to move things along fast.

Smale’s advice helped guide my tenure at Microsoft. And though his words would never win a Pulitzer, they came from a CEO who brought Procter & Gamble to 23 new countries, added 15 business categories, and doubled annual sales to $23.5 billion. You don’t have to look far to find executives who too would have benefited from the mentorship of such a seasoned leader.

Related: Larry Page And Google: Individual Empowerment Requires Forceful Leadership!

JC Penny

In contrast is JC Penny, a vivid example of not learning industry differences before making big decisions. And they are really paying the price.  In July 2011, Ron Johnson, the longtime head of Apple’s stores, became the company’s CEO.

He quickly did away with coupons, eliminated traditional sales, and built branded boutiques within the Penny’s stores. All these steps mirror the Apple stores that he built – and quite successfully, I might add. The problem is that all of these things are completely counter to what low-end retail customers demand. The result:

  • Penny’s same-store sales dropped -2% in Q4 of 2011, -19% in Q1 of 2012, and -22% in Q2 of 2012.
  • The consistently profitable Penny’s lost $147 Million in the most recent quarter, and the stock is down 35% from the start of 2012.

One Wall Street analyst summarized it well: “Why didn’t Johnson test the no-coupon, no-sales, boutique strategies first in small test markets, like is traditionally done in this industry to avoid dumb moves?”

Related: Leadership Advice For Groupon’s Beer-Guzzling CEO

Moving to a new job

Here, a few lessons Johnson could benefit from as well as which should be applied by anyone moving to a new job – no matter what your title.

  1. The Orientation:  If you are moving to a new organization, the first step is to study how things work, both internally and externally.  Internally, you need to know the people and the practices used to get work done.  Externally, you need to know who your customers are, be they internal customers or external.  You also need to know how things operate externally to your organization.  For all of this, the key questions you need to probe are: what are the successful practices and what are the pitfalls.  This is what Ron Johnson didn’t do as he moved to Penny’s.
  2. The Vision:   Any organization should have two components: First, what are the ongoing responsibilities and the measures for success.   Second, what is the organization doing to improve; to contribute more, to operate more efficiently and effectively, etc.   After taking adequate time learn about how these two things are currently being addressed, develop a vision and related plan for execution for significantly improving things on both of these dimensions.  Test out the plan, as well as other possible options, with your key people, evaluate their feedback and modify the plan accordingly and then launch it.
  3. The People Once your plan is set, it is time to think about staffing.  While at the outset of taking your new role, you probably quickly developed first impressions of your people and others you have come in contact with; hold those thoughts.  As you go through the orientation and vision development stages, really carefully study/learn who are the strong players and who are the weak.   In the process of launching the plan, it is an ideal time to put the really strong players into the key roles, and deal with weaknesses, to help insure success.

The lesson is clear; in moving to a new job, learn before you leap!  On the other hand, do eventually leap!  That is where the fun is and that is how you make significant contributions.

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Bob Herbold

Bob Herbold

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