When Mike Ullman took over as chairman and chief executive at J.C. Penney in 2005, he was faced with an unusual situation and challenge.
The company under his predecessor, Allen Questrom, had accomplished something that many thought could not happen. It made a turnaround and became successful after many years of heading in the wrong direction.
So what was Mr. Ullman's problem? Although it had rebounded, the mood inside the company was not forward-thinking. Instead of building on how far Penney had come, it was more just a sense of relief that disaster had been avoided.
Mr. Ullman told The Dallas Morning News, the company needed to change the mindset of its own before it could ever really count on being able to accomplish anything similar with its own employees.
Although he had considerable experience, Mr. Ullman spent a great deal of time at first talking to Penney employees and executives at other companies that had turned businesses around.
"A group of us went to IBM to learn," Mr. Ullman said. "What we heard was not to celebrate the turnaround too long; you end up pleased that you're not dead. Their advice was to hit the accelerator. Don't coast."
Fred Foulkes, professor and director of the organizational behavior department at Boston University School of Management, said Mr. Ullman had the right approach.
"It's very difficult to change a culture, and it has to be done at the CEO level and then move it throughout the organization," he said. "It has to be pervasive.
"CEOs have to signal that this is really different because you will have people in an organization as old as Penney saying, 'This is a phase, and it will pass and we'll go back to the way things were.'"
Among the first changes at the corporate headquarters was a more relaxed approach to the business environment. First, restrictions placed on decorating cubicles were removed and the company instituted a casual dress policy.
The company held its first-ever Christmas party for employees and staff at corporate headquarters were told they could take 10 Friday afternoons off a year by working an extra hour Monday through Thursday.
Beyond those feel-good measures, the company began actively looking to promote the company and its workers from within. A new training program was developed and taught strictly by those from within the company. High-potential candidates (hypo in Penney-speak) were invited to join the company's Retail Academy.
Top executives including Mr. Ullman, company president Ken Hicks and others are all staff instructors. The company CEO taught 164 hours last year. Mr. Hicks conducted 101 hours of classes including two extended off-campus retreat programs.
One of the major advantages coming out of the Academy is that workers get to meet others in the company and discover new ways of working together to take care of opportunities that previously may not have been dealt with.
One example involved Clark McNaught, merchandise manager for men's clothing and accessories, at a J.C. Penney in Houston. During a training event, he made a contact with a district manager within the company.
Mr. McNaught believed he could sell higher-priced men's merchandise because the Foley's department store in the same mall was closing. "There was pushback on the idea because this store didn't usually get a full selection - there was no history to support the decision," Mr. McNaught said. "The district manager was in my class, and he called me and we worked it out. When you leave there, you have bonds like you form in a sorority or fraternity."
Discussion Questions: What lessons are there to be learned from the J.C. Penney's program to remake its corporate culture? What do you see as key components to it having, at least to this point, achieved its goals?