Penney’s Innovation Doesn’t Mean Dollars

The two ex-Targeteers trying to turn J.C. Penney into mucho dollars for investors and themselves got a big dose of innovation reality this past quarter when their new strategy failed to resonate with consumers.

The former bullseye boys, Penney’s CEO Ron Johnson and President Michael Francis saw same-store sales decline 19 percent—ouch! Analysts were only expecting a decline of 13 percent, and the street doesn’t take very kindly to unpredictability, especially when the news is worse than expected.

The innovation reality lesson for Penney’s—other than the two top guys’ wake-up call that the company isn’t remotely like their former employers, Apple and Target—is that sometimes markets and people just aren’t ready for the innovation you want, think, and hope they are.

Research showed that consumers aren’t big fans of keeping track of coupons and sales in order to get the best prices when they shop. At least that’s what was in the pipe Johnson and Francis were toking when they devised part of the new Penney’s strategy: no more coupons and no more sales. We’re going to give you our best price every day—no gimmicks.

Not a bad idea, but tell that to consumers who have been trained their entire lives to shop for sales, often using coupons and other promotional tools.

It looks like it’s going to take more than a few expensive flights of television commercials to change consumer behavior to the tune of 19 percent just to get back to where the old Penney’s, excuse me, “JCP,” was prior to the strategy shift.

Sometimes innovation is too far ahead of where the market and consumers are willing to go. Based on initial results, that seems to be the case for Penney’s.

The other part of Penney’s strategy—transforming stores into groups of specialty shops within a store, with entertainment centers at the core—hasn’t happened yet, so the jury’s out on whether the complete strategy is going to resonate with consumers.

Apple can direct consumer behavior, or at least strongly influence it, and to some extent so can Target, when it comes to affordable fashion and “design for all.” (I mean, did anybody really need a Michael Graves toilet cleaner brush?) But not everybody can expect to do the same, especially a retailer like Penney’s, which derives somewhere in the neighborhood of 40 percent of its sales from couponing and promotional discounting.

Innovation can create and drive markets, but sometimes those same markets just aren’t ready for the particular innovation—regardless of what research says.

Penney for your thoughts.

Studios of the Mind

The artist Doug Aitken has two buildings that are a part of his studio, each one representing a different part of his brain—one for the left and one for the right.

While we can’t all have dedicated studios for the different thinking parts of our brains—one more analytical and linear, the other more conceptual and artistic—we can design spaces or time to channel our thinking one way and then the other. For Aitken, the physical differences of the studios help him to think differently.

For us, creating our own right- and left-brain worlds can help us shift and balance the two thinking skills we need to not only generate new ideas, but to also evaluate them.

Think about how you feel when you’re at your desk (or wherever you get work done) and then the shift you feel when you physically move to another place. That’s why it helps to get a change of scenery, so to speak, when you’re working on something that requires more creative problem solving—although everything could use some of that thinking on a regular basis.

It could be as simple as having two different boards in your workspace: one for more critical, analytical pieces of whatever you’re working on, and another for all the wild possibilities.

Another way to look at it: Have you ever noticed how you feel more creative or innovative when you go to a particularly active city, like New York or London? That could be you visiting your right-brain studio, and it also explains why travel, or just an interruption from our normal environment, helps us generate new ideas.

Don’t Be a Sitting Target

How diversified is your portfolio?

I don’t mean the number that a vast number of Boomers scrutinize on a regular basis, wondering if they’ll have enough to live on if or when they retire. Retire? What’s that mean, anyway?

No, I mean your innovation—your “new idea” portfolio. You do have one, don’t you?

Ian Bremmer reminded me of this when he wrote about what he terms the ability of countries to “pivot.” Citing a variety of examples from Brazil to Indonesia to Canada, his point is that countries with a variety of economic resources and alliances are able to move to take advantage of changing conditions—the ability to pivot.

So, how does that relate to your innovation and new idea portfolio? Apply the same logic of the aforementioned countries.

Vary the resources in your portfolio and don’t become overly dependent on one. Brazil, for example, once had the United States as its largest trade partner but over the years developed a relationship with China, which is now its largest trade partner and enabled them to weather the recent U.S. economic downturn. Compare that to Mexico, whose fate is closely tied to that of the United States.

Putting yourself in a position to pivot when conditions warrant won’t make you immune to economic conditions—but the flexibility makes you more resilient.

When you look at your current pipeline of new ideas, are they all similar or tied to a single industry or resource? How much flexibility would you have, should conditions change?

Another way to look at it: Without the ability to pivot, you’re pretty much a stationary target.

Think Visually

While making a presentation last week and describing an “infographic” to a client, I found myself saying that when you have to consolidate information, it really makes you focus on what’s important. That’s basically what an infographic does—it takes a bunch of information, captures what’s most relevant, and represents it in graphic form.

That same concept is something to keep in mind when you’re creating and describing new ideas: Sometimes we need to challenge ourselves in new ways—for example, by not using words to describe something.

What if you couldn’t use a lot of copy and lengthy descriptions to explain your concept? What if you could only use a single visual?

One creative problem-solving exercise allows you to use only pictures to describe ideas. I’ve seen some very “interesting” visuals used to describe a company’s brand, not to mention employee benefits programs and customer service.

The same thinking applies to restrictive mediums like Twitter. What if you could only describe your new idea or innovation in 140 characters or fewer? In fact, you see some employers limiting prospective employee applications to a single tweet—talk about getting to your value quickly.

When you come up with your latest innovation, try telling the story visually first.

Play, Passion, and Purpose

Tony Wagner is an “Innovation Education Fellow” at Harvard with a new book about how education can help to create innovators. While he spends a lot of time talking about how innovative centers of education are successful (think interdisciplinary courses), his key finding about young innovators is something one of his peers at Harvard, Teresa Amabile, discovered a while back about innovative companies.

It’s all about intrinsic motivation.

Wagner found that the young innovators of today are intrinsically motivated—not very surprising. And the schools that do best at educating for innovation focus on what Wagner calls the three Ps: play, passion, and purpose. If you have school-age children, you may want to ask whether your school knows what your child’s passion is and what they’re doing to nurture it, versus teaching to score highly on a standardized test that ranks teachers and schools.

But Wagner’s findings and recommendations go beyond the classroom and can have real implications for the workplace, when it comes to encouraging intrinsic motivation in employees.

How many of us know what work-related interests and activities our co-workers are really passionate about that in time can evolve into a greater sense of meaning and purpose? And what, if anything, are we doing to encourage that through discovery-based learning and experience? (That’s a point that Wagner makes about the classroom experience.)

Wagner’s new book, Creating Innovators: The Making of Young People Who Will Change the World, is geared toward educators, but it’s just as valuable for anybody in human resources or organization development looking to raise the innovation quota at their organization.