Celebration of Fools: An Inside Look at the Rise and Fall of JC Penney

I've worked at JCPenney for over 25 years before reading this book. It is currently making its rounds through my store. It's a great book of JCPenney history for anyone who wanted to know or to remember where we were and where we're headed. It is current up until the time that Q & V took over, which is now another chapter to be written by another writer someday. P.S. I bet Mike Ullman, current CEO, has read it.

Celebration of Fools by Bill Hare is a narrative about the people and events at JC Penney that contributed to the company's growing success and about those that led to its decline in the 1990s when business and the economy were soaring. The company and its leaders lost, or forgot, the company's vision to bring value to customers and communities. Once the descent began, no one, not even the board, seemed to question that critical decisions were not being made for good business reasons. The company's story is told through an organized collection of stories, remembrances, personal accounts, archival data and the like. This approach gives the book a very human feel for the people who built the company and those who failed it.As for lessons to be learned from the book, major flaws seemed to infect the company. The decision to move the company to Dallas did not appear to have been made for any solid business reasons. The move took its toll on the quality of the company's leadership, its connection to the clothing industry and consistent merchandizing. The company lost its ability to select the right employees, which seems to be another major shortcoming. There didn't seem to be any thought to succession planning or how performance should be rewarded. The Penney focus on bringing value to the customer and communities seem to disappear. The book covers the "rise and fall" of JC Penney from around 1900 to 2000 when new management took over for a turn-around attempt. It will be interesting to see if the ground lost in competitive positioning, financial health and market image can be regained. But, as the author states in the Introduction, that will have to be another story altogether.I liked the book. It was well-told and clearly written. I appreciated the writer's perspective. It made me think about people in companies and how their decisions affect customers, other employees and communities they touch.

This probing look into the inner workings of the JC Penney company is one of the richest reads about the business world I've encountered since "Barbarians at the Gate." Hare tells the story with the drama of a screenwriter, the research of an historian and the insight of a novelist. It's a book I couldn't put down. And it's especially appropriate in these times of corporate chicanery, deceit and executive greed.

Hare suggests that CEOs W.R. Howell and James Oesterreicher as well as their associates were fools to abandon the cultural values and operating principles which enabled the J.C. Penney Company (JCP) to become the most profitable and highly-regarded retail merchandiser in the world. With all due respect to Wal-Mart's executive leadership, JCP's decline was the result of self-inflicted wounds. The "inside look" Hare provides is less the result of any privileged access he had than the willingness of those who did have such access to share their reactions to (and explanations of) their beloved company's deterioration. These insiders felt betrayed. More in sadness than in anger, they shared with Hare directly or through other sources their thoughts and feelings about JCP which "had shifted from being a company of merchants to an organization of managers, with its focus changing from serving customers and communities to maximizing sales and profits. Finally [during the regimes of Howell and Oesterreicher], the actions of its leadership became both soulless and silly." To appreciate what JCP had lost, Hare carefully explains what JCP once had. Rather than glorify James Cash Penney himself, Hare duly acknowledges the founder's importance while suggesting -- with all due respect to him, "The Body of Doctrine" (page 36), and "H.C.S.C." (page 37) -- that others deserve most of the credit for leading JCP to greatness, both as a retail merchant and as a human community. They include Jack Maynard, Earl Sams, Don Seibert, and Walt Neppl. In this context, I am reminded of David Glass and Lee Scott. When Glass became CEO of Wal-Mart in 1992, the company was doing $43.8 billion in sales. Just three years later, under his leadership, sales hit $100 billion. According to Robert Slater, Glass "took Wal-Mart out of Middle America and made it into a global brand." Glass and his colleagues stayed true to Walton's idiosyncratic management style while investing in the technologies and logistics operations that a multibillion-dollar company needs. After succeeding Glass as CEO while also remaining faithful to Sam Walton's core values, Scott was the driving force behind Wal-Mart's adoption of various advanced technologies which continue to provide a decisive competitive advantage. In this volume, Hare carefully traces a process of deterioration which began when Howell became CEO and he does so with a combination of sadness, anger, and dismay. The historical information and personal accounts which Hare provides leave little doubt that principles and profits are not mutually exclusive. On the contrary, they are interdependent. Mr. Penney knew that in 1902 when he opened the door to his first store, "The Golden Rule." We would be well-advised to keep that in mind 102 years later.