Unlocking The Secret Behind The Apple Store With Ron Johnson

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* Book: Shop Different: How Retail Revealed Apple’s Genius

Timestamps:
00:00:00 – Cold Start & Intro
00:02:24 – Meet the Man Behind the Apple Store
00:08:11 – The Secret Behind Apple’s Mobile Checkout
00:09:32 – Why Everyone Called the Apple Store a Terrible Idea
00:19:07 – The Psychology of Standing in Line
00:21:57 – What Is Personal Geography
00:26:07 – The Childhood Memory That Built the Apple Store
00:33:35 – Why JCPenney Became His Biggest Failure
00:41:15 – The Real Lesson Behind Leading Change
00:52:44 – Why Personal Geography Shapes Every Leader

Ron Johnson (00:02.00)
We were about 10 years ahead of mobile point of sale before anyone else in the industry really did it. We did that back in 2008, right after the iPhone came out. We didn’t want a customer to have a handoff. And we wanted the employee who helped you to complete the transaction so they could walk you out the door and give you a fond farewell.

Customers love being in a line outside the store. Remember, when we were launching the iPhone. You could order the phone online. That was a choice. But people came to the store to line up. And they came 8 days early in many stores to get to be at the front of the line.

Skot Waldron (00:48.00)
When I’m not hosting Unlocked, I’m speaking at events all over the world. I’m helping leaders and I’m helping teams communicate better. I’m helping them build trust faster and actually enjoy working together. I’ve spoken for companies like The Home Depot. I’ve spoken at national architectural firms. I’ve spoken for pharmaceutical company offsites. I’ve spoken at associations, you name it.

With 99% of attendees of all those events, over 1800 people have reviewed me at this point. 99% of them saying they got some value. That’s pretty awesome. Even the caterers have thanked me. And if they are thanking me and they’ve heard a lot of talks and they’re busy doing their jobs, that’s saying something. If you’re an event planner looking for a speaker who’s really easy to work with, trust me, I want to be the last thing you’re worried about on event day. I’m going to take care of you. And who actually delivers value for your audience that they are going to use on Monday morning when they return to the office, then let’s talk.

Have any of you heard of the Apple store? The Apple store, that one building, that glorious retail outlet that you see where you’re like, ooh, that’s a little striking. Ooh, that’s a little bit different. Ooh, I’m going to go in there and see what’s going on. And then you have this experience. And you’re not really pressured to buy anything. You just do stuff in there. And then you come back maybe later because it was kind of this experience. And then you come back because, yeah, you’re curious and you want to poke around on some Apple devices, and then one day you end up buying something.

Well, I am going to talk today to Ron Johnson. Ron Johnson is the brains, along with Steve Jobs, behind the Apple Store and what it was and what it was meant to be and how it came about. And you’re going to hear all of that today. And we’re not only going to talk about Apple, but we’re also going to talk about his journey as CEO of J.C. Penney and a little bit of Target as well. And because these journeys are what shape him and his perspective and his new book that is going to help us all think about how to shop differently, which is the name of his new book. But it’s a mindset. It’s not about retail; it’s about a mindset. This whole interview is about mindset and about the things we learn that shape behavior, about who we are and what we do and the impact we’re going to have.

Apple Store creator Ron Johnson is a sought-after speaker, board member, and he’s the author of his new book, Shop Different: How Retail Revealed Apple’s Genius. He also founded Enjoy, the first mobile retail store, and served as the CEO of J.C. Penney. He is best known for creating the Apple Stores, working directly for Steve Jobs while serving as a member of Apple’s executive team. Prior to his time at Apple, Ron was highly regarded for the work he did with Michael Graves to bring good design to all as a merchant leader at Target; their collaboration set
the stage for the brand’s hundreds of later design partnerships and cemented Target as America’s premier upscale discount retailer. Ron lives in the San Francisco, and he was so gracious as to hang out with me today and you. So here we go.

All right, Ron, it’s good to have you, man. Thanks for joining the show.

Ron Johnson (04:22.00)
Yeah, I’m happy to be here. It’s a pleasure. Thank you for including me.

Skot Waldron (04:25.00)
Wow, do you smile this much in the morning all the time?

Ron Johnson (04:28.00)
I smile all the time. It’s just preternatural. I don’t know why.

Skot Waldron (04:33.00)
That’s amazing. It’s funny, you’re one of those people. There was you know, listening to a psychologist the other day talking, he talks about positive psychology a lot, right? And he was just out there, and he was telling a story of his little sister falling off the bed when they were little. And you know, she falls off and lands on like kind of all fours, and he says, you know, how extraordinary it is that you fell off the bed and landed on all fours and she got all perky and positive and got back on the bed, although she had a broken leg, you know? So, it was like.

Ron Johnson (05:09.00)
Yeah, I don’t know if I’d smile if I had a broken leg off, fallen off the bed, but maybe I would.

Skot Waldron (05:13.00)
I feel like you’re one of those positive guys, Ron. Yeah, that’s so cool. Let’s kick this thing off. I want to ask you about Apple Store stuff. The Apple Store model is just like holy moly, like so like it’s just rethinking retail. People know the Apple store. But people don’t really remember…

Ron Johnson (05:34.00)
Let me ask you, it’s your show, I haven’t got this belief that we remember like the first store we went to, the first experience. Do you remember when you went to your first Apple store and where it was?

Skot Waldron (05:50.00)
It was in Chicago. It was the Apple store in Chicago, and it kind of blew my mind. Not I mean, as a graphic designer, we adopted you know, I’ve been using Macs my whole life and you know, doing the whole world and the beauty of the idea of Apple and what it created, a movement of design and simplicity and the thinking behind it, I wasn’t surprised. Let’s just say that I wasn’t surprised when I went into the Apple store. If it was, you know, the stickers everywhere and like, you know, black shelving with little hooks, and you go in there and buy stuff and you’re in and out just to, I would have been disappointed. Let’s just put it that way. So, it met my expectations. And yeah, it was solid. The Genius Bar was something totally different for me though, that was smart. That was smart. Why do you ask?

Ron Johnson (06:52.00)
I’m just curious, you know, just curious because I really think first impressions make a big impact on people. You know, first impression when you meet somebody, first impression when you walk in a store. And I was just curious what your initial impression was. Because today the stores kind of have a, in the culture there’s a sense that they reinvented retail, etc. I don’t know that everyone walking through the first day understood that. It was after they experienced the store, going to the Genius Bar, meeting the employees, buying their first product, that it really came to life. But I was just curious.

Skot Waldron (07:33.00)
Well, you know, the other thing that impressed me is that when you meet somebody there, they’re not trying to sell you a watch. You know, they’re not trying to sell you a computer. And it’s about that experience. And the other thing I loved about it was y’all were one of the first people to have, like, you empowered your people to make the transaction on the spot, right? Like it was, I want to buy something, pull out the machine, pay for the thing, leave. Brilliant. Like that was like I was like, couldn’t every experience just be this.

Ron Johnson (08:10.00)
That was hard. You know, we were about 10 years ahead of mobile point of sale before anyone else in the industry really did it. We did that back in 2008, right after the iPhone came out. But we just wanted, we didn’t want a customer to have a handoff. And we wanted the employee who helped you to complete the transaction so they could walk you out the door and give you a fond farewell. But this idea of handing people off in a store always felt bad to me. Now, you go checkout, it’s a transaction. When they just take that out and say, let’s take care of this. You know, it feels more personal.

Skot Waldron (08:53.00)
It feels like my person. Like this is my person, you know, and I can go back into the store and know that that person handled me from start to finish. And like I feel this kind of connection, right, to that person. I think that was interesting. I’m going to be so bold as to say when the Apple store was the idea what kind of when it launched, people thought it was a terrible idea. Like, I mean, there was some kind of thing there, but I mean, Steve and the rest of you coming up with this idea, I mean. What did you all understand that other people missed?

Ron Johnson (09:32.00)
Well, here’s what we understood. First, everyone thought it was a terrible idea. And I understood that. You know, we launched the stores in 2001. The dot-com boom was just taking off. The internet was going to be the future of buying things. And especially in the PC industry, Dell was the big winner. You know, people were buying PCs, they were all ordering them custom from Dell. And then Gateway, which had rolled out 300 stores, was shutting them down. They couldn’t make money selling. Windows PCs, which were 95% of the market. Apple had 5% market share, and it’s going to open stores. And they’re not only doing that, they’re putting them in these expensive malls, you know, premium real estate, building huge stores, filled with employees, not on commission. When people heard what we were doing, they thought we were absolutely crazy, right? But there were two insights that we had that nobody else understood.

Apple didn’t have an option. It had to do stores. Because when Steve came back to Apple in 97, he created arguably one of the most influential products of the decade in the iMac, Johnny and him. It was on the cover of Time magazine. No, it reinvented the personal computer in a lot of ways. But it didn’t change the business for Apple. It sold the Apple Faithful. And when you would go to try to buy a Mac, I mean, at that time in 2000, Best Buy wouldn’t carry the Mac. It wasn’t high volume enough. Circuit City didn’t carry the Mac. So, if you’re not in the top consumer electronic stores, you’re relegated to Sears and CompUSA, you’re never going to have a chance to suit up.

So, Steve learned from the iMac experience that if he wanted to win, he had to control the customer’s spirits. So really stores were not an option. It was just how we would do them. Right? But the insight we had that people didn’t expect, a lot of people thought we’d, you know, design a store for the Apple Faithful and deepen our relationship and try to grab a few more customers who might come over to the fold. Our insight was that half of America hadn’t bought a computer yet. And we’re at the beginning of this digital revolution.

In 2000, 90% of the people owned film cameras. No one had digital cameras. Very few had digital camcorders. Music players were starting to come, like the iPod eventually came out after we opened the stores. But we’re heading to this digital world and that could change the game. Because a Mac combined with a digital device where you could then do things with it on the Mac and share it was a big deal. And so, no one really understood the future or the necessity for why we had to open stores. So that was a bad idea. Now, none of us could predict how successful the stores would become. That happened because customers love the experience.

Skot Waldron (12:44.00)
Well, I mean, I would almost argue, and this is almost you know, this is Apple mantra, right? Think different. About you didn’t necessarily just, I mean, sure you wanted to sell a product, right? And sure, you wanted to reach people in different environments and you built these amazingly beautifully designed retail spaces in central locations where they were highly visible. I mean, you paid top dollar for the real estate for sure. But I don’t think Apple, and tell me if I’m wrong, didn’t necessarily build these stores to like, sell products.

Ron Johnson (13:21.00)
No, we did, we did, we did. Steve said No. No, he said we don’t need the stores to build a brand. We’ve got a great brand. We need the stores to build a business. The outcome, they had to sell products, and they had to make money on their own, or we couldn’t have built so many. But I believe strongly, based on my upbringing in Minnesota and how I like to shop, like you said right away, I don’t want to talk to a commissioned salesperson. I want that person looking in my heart, not my wallet. You know, I want someone who’s going to try to really address what’s right for me. And so, we’ve worked hard to hire interesting people, train them on the technology, people that love customers. We never push them to ask for a sale, to do a transaction before the customer’s ready. They’ll come back. If you have a good experience, they’ll come back. You just have to talk to enough people, you know, and the average person bought a computer on their fourth or five visit. When they came back, they knew exactly what they wanted. You know, but we didn’t push sales, we pushed how the Mac could change your life at the start.

Skot Waldron (14:40.00)
That is what I want to talk about. I wanted to talk you know, ’cause I led into the idea that you didn’t. Okay, hold on with me for a second. You didn’t buy, you didn’t build the stores to sell products initially, right? I mean, the thing how they, or else you would have trained your people on transactional sales tactics. Commissions, right? You built an experience for people. So, they wanted to come back four or five times and just go to the Apple store.

People would go to the Apple store for the experience of clicking around, of looking at a watch, of looking at it, flipping around on an iPad. You had different apps already installed on the stuff, and I could play games and I could do different stuff. And my kids would go in there. If we went to the mall, my kids would go sit in the Apple store for an hour on those beanbag chairs and like play around with the tablet, you know? Like you’re creating something regardless of whether we were going to buy something right then. Right. That wasn’t necessarily your concern. That’s why I’m saying, like–

Ron Johnson (15:48.00)
I hundred percent agree. And let me take you back. When we launched the stores, we only had four products. We had two desktop computers; we had two desktops and two laptop portables. And we built these big stores like that one you went to on Michigan Avenue. So, we had to create an experience, right? And so, we put in all these things because all we wanted to do was get people into the store. Because Steve always believed if they got their hands on the Mac and they felt they could get support to buy it, they would love the experience. So, traffic was our friend. We wanted as many people that would come to the store as possible. You know, so we did everything to get people who are walking down a mall or walking down on Michigan Avenue to turn right and go 10 feet out of their way to try an Apple store.

But the benefit we had at the start, you know, nobody had computers, very few did. There weren’t really mobile phones that you could do email. You couldn’t surf the web on a phone back then. Phones were just phones. The Apple store became like a free internet cafe for people. And people would say I’m going to meet you at the mall. Don’t worry, I’ll go to the Apple store. I’ll hang out there. Whenever you get there, I’ll be fine. And the stores were packed. Every computer is taken. Every kid’s table is taken because we had games loaded for kids. And like you said, your kids would love to go and hang out there and play on the computers, you know?

So, we create an experience that would pack the stores with people and eventually believing that they’ll say, well, why don’t I buy one of these? I like this store. And as they spend time there, they say, well, they’ve got support. Look at that Genius Bar. What does that do? And they’ve got classes in a theater room. And if I go buy a Microsoft PC at Best Buy, I’ve got none of this. I want to be a part of it, you know.

Skot Waldron (17:51.00)
I think that’s amazing. I mean, I remember when you know when the iPhone was launching and you know, you would have the three-hour, four-hour lines, people camping out outside of an Apple retail store. And that was, I mean, was that intentional? I’m curious just from like experiential extent.

Ron Johnson (18:13.00)
I love lines. Customers love being in a line outside the store. They don’t want to be in a line inside the store. Remember, when we were launching the iPhone, you could order the phone online. That was a choice. You could activate it online. But people came to the store to line up. And they came 8 days early in many stores to get to be at the front of the line and the lines, lines have their own culture. We see it today at a Taylor Swift concert or whatever, you know. There are people who affiliate with a brand, they want to be a part of it. That’s what the connection they’re looking for.

And so, when you walk through those lines, you’d see fathers and sons, mothers and daughters. People would bring tents to sleep overnight. You know, we’d go out there and bring, you know, water and food, and if it’s raining, umbrellas to people. But it was a sign that they loved Apple. Our employees love the lines. They love going every day. How much longer is it? They get to know the people in the line, you know? So, I think lines are a really interesting thing, you know?

Skot Waldron (19:26.00)
That is interesting. There’s a community, right? And let’s say, these are my people, these people think like me and we can connect on something, right? I mean, regardless of background or whatever it is, we are unified in this.

Ron Johnson (19:45.00)
Absolutely. I could write a book on the lines at the Apple store. I heard so many beautiful stories from those lines. You know, I remember we opened our first store in Tokyo, and everyone was telling me, you know, Ron, what have you done to tailor the store for the Japanese customer? And I said nothing. I said, I’m assuming they want to connect with Apple and Cupertino. Not what Apple thinks of Japanese customers want. And people said, but they don’t respect people wearing T-shirts, the employees. They don’t wait in lines. When they come in, they see your openings. I see these videos; you’re high fiving the customers. They try to keep germs away. They’re not going to high five anybody. What are you doing to make this different? I said, we’re going to open the Apple store and let them connect with Apple.

And so, two days before the store is ready to go, and Steve actually flew over and Laurene, his wife for the opening was Thanksgiving weekend 2002. There’s a typhoon warning. So now we got a big typhoon coming, and it’s just stormy as heck the day it opens. But the line was 10 subway stops long. You’d measure the line in miles, not feet. They showed up and we opened the store, and they all come in, they’re all high fiving our employees, you know, and they love being there, right? Now that says a lot about Apple. But it also talks about how the stores, opening a store became a moment in and of itself. Because wherever we open a store, the same thing happened. It became kind of a cultural event. But again, people are choosing to wait in line. That store is going to be open the next 30 years. Why do you wait in line for a week when you can go in the store, it’s open eighty-four hours a week? They want to be a part of something and that’s what it takes to be a good retailer. You have to feel, really what a customer’s looking for. And that varies by store and everything, but it’s, I think you need to have an instinct for that.

Skot Waldron (21:57.00)
Can we talk about this idea of personal geography? This is, I don’t know, I know you talk about this. I don’t really know what this is. I’m interested to hear what you think about it or what you say about this. I mean, what does it mean? And why do you think most leaders completely overlook it?

Ron Johnson (22:13.00)
Because here’s what I’d say is for a lot of years we talked about diversity, right? It’s really good to have employees with diverse backgrounds, but unfortunately that puts peoples into buckets because you have to measure what percent of my employees are this, that, and the other thing. But people are much more unique and nuanced than you’d find with a statistic, right? And when I look at today’s world in particular, in an age of AI, common knowledge, all the knowledge the world has accumulated for thousands of years is a query away. So, the only knowledge, new knowledge we get, comes from what’s inside a person. Tends to be revealed in conversation, revealed in conversation. But each of us comes to the world every day with a personal geography.

So, my personal geography is my live-life. It’s where I grew up, the culture of where I grew up, how my parents raised me. What were those experiences, formative experiences I had in elementary school, middle school, high school, leadership opportunities, where I went to college, where I’ve worked, who my friends are, the books I read. You know, every one of these creates a unique experience that only I have. So, when I met with Steve, when I launched the stores, his personal geography is completely different than mine. And he’s a California kid. He loved technology. He had dropped out of college. He spent a lot of time in India. He had founded a company. I was a Minnesota kid, grew up in a loving family. Went to college at Stanford, went to Harvard Business School. He never remembered that. It didn’t matter to him. But I had and I’d been a retailer all my life. I started unloading trucks. I had a very different personal geography.

So, when Steve and I would talk about the stores, what mattered wasn’t my retail knowledge. He could get that from a thousand. Not a thousand, but twenty good candidates who could talk about retail. He wanted someone that had the values and the inner voice that would speak to the Apple customer. Does that make sense? And so, I really think this idea of personal geography is important. And most people don’t appreciate their personal geography. Every day they look at where they are today and I’m going to work. And if someone asks me my opinion, I’m going to tell them what I think the company wants me to say. So, I’m on the right path to get promoted. You know, what answer are they looking for? The only unique knowledge I bring is what I really believe in my bones. So, when someone asks me a question, I’ve got to dig deep and say, no, here’s what I believe. Does that make sense? You know, so that’s your geography and how we have to apply it.

Skot Waldron (25:27.00)
I guess I’m curious about how this shapes behavior. How does our personal geography, how does that shape behavior and then how do, what do leaders do with that?

Ron Johnson (25:44.00)
Well, I’ll give you an example. So, I grew up, my first memory as a child was, I was 4 years old. I was walking into my, I was in an office in an elementary school with the principal and my mom. And it turns out I was interviewing to see if I could start school one year early. Because my birthday was on the cusp. What do you do? And the principal said to me, you know, Ron, what color was George Washington’s white horse? And I said black. And I walked out and my mom bent over, put her hands on my shoulder and said, Ron, no matter what happens, I will always love you. That was pretty powerful, right? My first memory as a child was making a mistake, getting the question wrong. But the second was, I’ll always love you. Right?

So, I grew up in a neighborhood, a family that was filled with love. And my mom made her house a place to belong. All the neighbor kids were always welcome. When I was captain of my high school soccer team, before every game, the team would come to her house, and she’d make dinner for everybody so we could be together. Yeah, she created a place to belong.

Fast forward to the Apple store. The Apple store is a reflection of how my mom treated people. The Apple store became a place to belong. I really don’t think you can, because I led the stores and worked with the team to craft the vision of how we’re going to do this, but I don’t think you can separate what the Apple store became from my personal geography. My love of retail, my love of how customers should be treated. You know, when I used to go into luxury stores in my thirties, I didn’t feel like I belonged. I was nervous to be there. I didn’t want that to happen when you walk in a technology store that you don’t really feel like you belong. All these things, all the decisions I made as a leader were based on my personal geography. Right? And that’s really important. Because in business, there’s head issues and heart issues. Right? Steve understood that. Apple’s marketing always appealed to the head and the heart. But the heart is a huge influence.

So often in business, we’re trying to make the right strategic business decision. What’s the right profit generating decision? But that’s not always aligned with the long term. What’s going to make a real difference? And that’s when you connect with someone emotionally. Right? And to do that, you have to really have an inner voice that’s connecting with what you believe the inner voice of the customer will be. You know, we did that with Design at Target. You know, I had this idea that, why should good design be expensive? And people thought it was crazy. And we took a mass market retail and brought in this designer product from Michael Graves and really told the story. And it turned out it’s exactly what people wanted. And Target became just this amazing brand during that period. It really elevated and got a new customer into the store. Right?

But all those things aren’t coming from a business case study. You know, if you went back to 2000 and asked ChatGPT or your favorite AI partner to, I’m going to meet Steve, what should I do for to build a store? Everything you would have said would have been the opposite of what we did. Locate 10 miles away where it’s low cost, they’re going to buy something every 4 years. You’re not going to have much traffic. Get really good commission salespeople to take advantage and know how to close people. You know, hide the service. You know, don’t let people know that the thing might break. You know, you got to serve people but put it somewhere in the back or next door.

Everything we did was different. We located in the most expensive real estate in town. Right? We built big stores. We took the Genius Bar and stood it out and said, “we know you’re going to have problems. Don’t worry. We’re here for you. We have the smartest people in every city right here to help you out.” You know, but none of that would have come through common knowledge. That came from inner knowledge, from a personal geography. Does that help?

Skot Waldron (30:11.00)
That’s amazing. I mean, so from our past experiences and things we grow and the things we experience in life are going to shape who we are and what we believe and what we want for others and the impact we’re going to create. And to know that you’re this is incredible. I’ll never walk into an Apple store ever again and not think that a little piece of Ron Johnson’s mom is in this Apple store. Like that her legacy is what helped shape her impact on you is what helped shape that entire experience for me.

Ron Johnson (30:51.00)
Yeah, yeah. No, I remember one year we were in our third year or so, and we still weren’t quite hitting our profitability. The iPod hadn’t gone to windows yet. And I just loved having people in the store. And you’d go in the stores at 10 to 12 in the morning, they weren’t very crowded. And I remember one year going, God, my mom loved us to go to summer camp. I loved going to summer camp. She was a volunteer nurse at the camp I’d go to. And I said, what if we did camp in the store? What if kids could sign up and we could have 20 kids running around the store on their computers. Our employees would teach them for a week. Every morning from you know 9 to 12, they’d come in the Apple store, learn something, and at the end we take our theater, and the parents would all come in and they demonstrate what they learned for the week.

Now that’s not going to sell anything, but that’s really fun. That’s going to connect with people’s hearts. And then my employees, but what if someone comes in and wants to buy? I said, they’ll be so impressed that Apple is doing this, that they’ll come back another time. You know, we just did the right things. And we have filled the stores of campers, you know, for a few years, you know. But that’s another reflection of what I grew up with and the kind of experiences you could create that turn a moment into a memory. That’s the art of life is to turn a moment into a memory because our memories we remember. Our memories we share with friends, right? That creates the virality. You know that today we do through online things. They’re kind of temporary. You know, we share odd stuff, but they don’t. That’s part of life today. It’s just quick, quick, quick, quick. Memories are different, you know.

Skot Waldron (32:42.00)
That’s incredible. How about okay? Let’s pivot a little bit to your JCPenney experience because you’ve experienced extraordinary success. I mean, you’ve worked with one of the most legendary minds of our day and launched one of the most innovative products of our day in the retail space. I mean, that in and of itself is quite amazing. But you’ve also experienced very public failure at the same time. I mean, and so looking back at that season of JCPenney, what did that teach you that Apple never could?

Ron Johnson (33:20.00)
I completely failed at JCPenney. Let’s not kid ourselves. I went in with a really big vision, and most people even today think it was the right vision. But I failed in how we went about it. I really believe that.

Skot Waldron (33:32.00)
So, what was the vision?

Ron Johnson (33:35.00)
Well, let me tell you, basically everything that made the Apple store successful, we’re in the vision of the JCPenney experience, but the way we did it was completely different. Okay. And I should have been either advised or smarter to understand what I was getting into. So, when I joined Apple, we’re going to build the stores. Apple is a mature company, but it was an innovator. It’s always looking for what’s next.

The leader, Steve Jobs, wants to do insanely great things, right? And I’m coming in there to imagine the stores. Well, I have ideas for what the stores are going to become, but I had to build a team. So, I went from one, the only retailer in the company, by the time we launched, we had a 100 people at headquarters working on the stores. We built our first stores 18 months later. We put them out there. They were good. People liked them, but they weren’t great. For the first 3 years we kept revising them and then boom, they took off and now we look back and they were all as successful, but it took time, right?

When I went to Penney’s, you know, part of it was I didn’t want to go unless the board was completely bought in to what I would do. Because I didn’t need to go run JCPenney’s if it’s going to continue the same business model. You know, my thought was that the department stores in the US had gone from 60, they were down to four. It had become largely irrelevant in shopping at that time. 2012 or 2011. You know, people were buying online, going to specialty stores, going to Apple stores. No one wanted to go to these big stores filled with racks of apparel that were kind of messy that I had to go navigate. And you saw that. All the department stores, the business was just terrible.

The JCPenney’s stock price was below what it was in 1963. You know, in 2000, 40 years later, whatever that was, you know. And so, I said, you know, I’ll come if you want to transform the department store to appeal to a younger customer because Penney’s customers were 55 to 65. You know, and they’re ageing and they don’t buy a lot. I wanted them to go after a customer, young families like Target had. I knew what that was like. How do you appeal to a 25 to 40-year-old that can get involved with you and stay with you for a long time? And so, I developed a vision to do that, right? But I developed that vision during the 6 months from when I was announced as the CEO to when I would start.

Because Steve asked me to stay till he passed away. Yeah, he called me up the day, literally 2 days before the announcement. He goes, Ron, there’s something I got to tell you. You know, sadly, I don’t think I’m going to make it more than 6 months, and I’d love you to stay till I’m gone. And of course, I said I’d do that. And then we had to announce that Ron was coming, but it’d be a while. During that time, I put together the vision for JCPenney and actually went to the board and put on a presentation of what I wanted JCPenney to become. I was like a retail scientist in a lab just doing this on my own. You know, I didn’t really have the team yet. I met a few of them and learned what they were like, but they were involved. And I had this big vision. You know, we’re to take this big department store and we’re to break it into a hundred small specialty stores with wide aisles. And each one’s its own brand.

We get Martha Stewart to have her first store, a Martha Stewart Home Store. We take Levi’s, which is a really popular thing. We’d create a Levi’s store within JCPenney. We’d have skateboarding stores with all the brands for the really young kids. You’d walk in and you could try skateboarding. Just make it an interactive, beautiful store instead of a big mass of clothing on hangers. Yeah, we do that. That was number one.

Two, that would let us bring in the kind of new products that would appeal to a younger family, right? And they didn’t have to be limited apparel. They could be all kinds of things. Yeah.

Number three, but to do that, the world had gone to everyday pricing. Nothing we bought required a coupon or a sale. And Penney’s it was running 13 sales a week. 13 sales a week. Every day the employee just ran around changing signs, blah, blah, blah, blah, blah, blah. And there’s only less than one out of a thousand items that were bought at regular price and the average thing was about 60% off. So, I said, why not let truth begin on the price tag? You know, and so we took $40 eds. What if they were just 10? That’s what people are buying them for. And then they could shop every day. Customers wouldn’t need a PhD in pricing to figure out how to get a $10 out of a JCPenney. You know, so on and on. All this would just clean up the store, create a new shopping experience. We have a town square where the kids would come in for fashion shows and all that, you know, just like the Apple store is a place to be.

So, I had a really good vision. And the board really seemed to like it. So, we had a meeting literally the board meeting after I started. I said, well we’ve got a vision here. Choice, we can either go. You got to start in retail if you’re to make a big change. The time to do that is February. You’ve come out of Christmas, you cleared out the old music merchandise. Let’s get started fresh. And so, we can do it this February, which is faster, we can wait a year. And during that year, I could build the team, we could work on our inventory, all stuff. And Mike Ullman, the former CEO, said, Ron, what do we have to lose? Let’s go. And the board said, Let’s go. And I like, I’m a risk taker, let’s go. But we went so fast, we didn’t have time to think through how to communicate this change, this huge change, to customers. To investors, most importantly to the employees of JCPenney.

Now, the people in the stores actually loved it, but the headquarters team didn’t understand it because they had all spent, you know, 10, 20 years on this old model. And what are we doing here? And they were implementing my vision. We weren’t implementing our vision, right? So, we moved way too fast. And that was the big change to me. And I didn’t bring in really new employees unless there was an open position. I kept the entire team. That was in hindsight a mistake, because you know, if your leadership team doesn’t buy into the change, it’s going to be hard to get the employees that work for them to buy into the change. So, I was way, I was wrong on that. We launched with an ad that kind of alienated the customers, it was to get their attention, it wasn’t to explain what we were doing. Yeah, we just made a lot of mistakes. And the sales were not that far off what we planned. We had planned to be down 15% for the year. We ended up down 20. Which, you know, it’s a lot.

But when I was at Apple in 2002, our sales, that’s 2 years after I was there, at robing stores, our sales went down 38%. As we transitioned the computers to Intel, made some strategic moves. In the tech industry, it’s pretty common to go through these cycles, but in retail it wasn’t. And so, no one understood it. And it just became really hard. And so, I eventually went to the board and said, look, because they weren’t happy, you know, they’re getting pressured from their friends. And what are you letting this tech guy run the stores for? And he’s running into the ground; he’s firing the customer. And I understood why people would feel that way. But yeah, so I went. I just finally told them and literally 12 months later, you know, hey, if you want to go back to the old model, you can do that, but I’m not going to do it. You can find anybody to do that. I’m not going to do that. I’m committed to what we’re trying to do. And we talked about that each of 3 months.

Finally, in April, they came and said, Ron, we’re going back. We can’t do it. And I said, fine. You know, I wasn’t resilient enough to because I had been successful most of my career. I’d never been through a real tough time. Because like you said, it was a really public thing. I didn’t expect it to be. I thought, who’s paying attention to JCPenney? I’ll just go make some changes over here on the side. It became a big business. It seemed to me it felt like a big business story at the time. And it was really hard. And so, I didn’t have the resilience to stick it through. So, I think if I had said to the board, we’re going to get there, here’s what we’re going to do, here’s the change we’re going to make, I think we’d have done fine. It might not have been great, but we would have gotten through it. Instead, they went back and you know, history is history.

Skot Waldron (42:45.00)
So, I hear a couple of different things in this story.

Ron Johnson (42:48.00)
Sure.

Skot Waldron (42:50.00)
I love the my vision versus our vision thing. I see a lot of that happening with leadership where even them and their executive team sit up in their glass tower and they make, you know, they determine the values for the entire company without asking what the values are from you know the people that live it every day. I see them making big decisions without bringing everybody in. I see them undermining their influence before they try to bring about the change in the first place. And people don’t know this person or what their agenda is. And you got self-preservation all over the place. And then the change happens and then the leaders wonder why nobody’s jumping on board. It’s because, you know, like you haven’t communicated the value, the change. Like you’re taking something that was certain and you’re creating uncertainty. And our brains associate uncertainty; uncertainty and danger are the same thing to our brain. And when you do that, you’re sparking so much.

So, I mean, I hear different pieces of your story, but the lesson for you, if you had to advise anybody going into this position or think back about what the big lesson was for you at that time, what was it?

Ron Johnson (44:05.00)
I would say one, I should have spent time truly understanding. From the employees who had worked at Penney’s a long time, why they were doing what they were doing. And given the need to get to a younger customer, what should I be thinking about? I would have included people in the process. Just like the Apple store. You know, I was the leader, but that vision was developed by a group of people working together very closely. It was our vision. So that’s number one. When you’re going to make transformational change as a leader, you’ve got to have the people you’re leading bought into what you’re doing. Because as you said, change is hard. When business is tough, creates a lot of emotions. You got to get through it. And that takes resilience. You know? That’s number one.

But two, I would have taken a year and not implemented the change at the speed I would have. And maybe thought of other ways to implement, you know. Could we have you know, every time there’s a new shop, that’s going to be everyday price. But we’ll, you know, where we haven’t changed yet, we’ll let the sales continue to happen and just ease our way out of it. There’s, we could have probably a more gradual transition, which would have been a little confusing for the customer, but it might have kept the business going better, you know. Time and buy-in were the two things I would change. And I think we would have ended up at a similar strategy if I talked to people, because I think they would have understood. Everyone thought the vision was great. That’s why the stock went up big time when we announced the vision. People were going, wow, this is going to be great. But then the moment the first quarter of sales happened, sales were down 18% or whatever that first quarter, the press and analysts started just pushing, this isn’t working. What are they doing? And the employees are hearing from their friends and family. And they didn’t understand it; they couldn’t explain to their friends and family why we’re doing this. It was always; there’s this new guy from Apple who wants to do this. But there was no understanding. Does that make sense?

And so then when that fear naturally came in, fear for my job, you know, are we going to make it? You know? It just became, it was a very difficult period for the employees, for everybody because of the speed we went at and the lack of understanding of the vision. You got to understand in your bones why we’re doing what we’re doing. You know, or you’re not going to do it.

Skot Waldron (46:50.00)
A lot of leaders, l work with a lot of leaders and they get frustrated at having to explain the why, especially to a lot of younger generations now that demand explanations for why we’re doing this and why we’re going here and a lot of the top-down approaches, just do it. I’ve got the idea, just do it. And oftentimes I will say this is not as much about you pushing the gas harder, it’s about getting them to take their foot off the brake, and I want you to help understand there’s resistance and fear there. And your goal is to lessen the uncertainty and help them feel comfortable in coming along. And that is done through trust building and influence building, through clear communication, through laying out a clear plan of implementation, getting buy-in, asking their opinions. I love this idea that you said about what you would have done is leaned into those legacy people who probably felt like, oh, this big Ron guy coming in from Apple thinks he’s going to change everything here. Who does he think he is? He doesn’t know us or our business or what we do.

So, there was a lot of that coming in too. So, I love it.

Ron Johnson (48:01.00)
The other thing is I agree with you completely. The other one is, you know, if I’d learned from Steve, Steve was never in a hurry. You know, you look, he was taken from us really young but look at all he accomplished in his life. Steve was never in a hurry. You know, we go through a meeting, we’d talk about it as long as we can. A product didn’t come out until he felt it was absolutely great enough for Apple. You know, the Mac we had four products in 2000, 25 years after the company started. And Steve had come back and paired the product line to those four. You know?

Then we launched an iPod. But until that was successful, he didn’t think we had earned the right to launch a phone. That was 6 years after the iPod. After that was successful, he launched the iPad. That was 3 years after the phone. You know, most companies would be as layering on product after product. Steve was never in a hurry. You know, at Pixar, when he got there and you know reinvented movies, he’d only let the studio do one movie a year. He said it’s all about quality. If these movies are great, like Snow White, which was at that time 70 years old, it was still generating money. He said, we’re creating something that’s got to last. And he took his time making movies. But you look at what he accomplished in his life, not being in a hurry. So why was I in such a hurry to move faster Penney’s? You know, it was just a bad decision, you know.

Skot Waldron (49:37.00)
Interesting. Interesting. I want to pivot to your book a little bit because I think this whole thing sets up your book, Shop Different. I mean, I think that when you think about industries and retail and shopping different, I mean, what sparked the book and what industry do you think outside of retail needs to start shopping different? Because I don’t think this just applies to retail.

Ron Johnson (50:10.00)
It’s a retail case study.

Skot Waldron (50:12.00)
It’s about how we think, right?

Ron Johnson (50:16.00)
It’s how we lead, how we think, how we build cultures, how we innovate. Everything. And it’s interesting as we were writing the book. I had a co-author, because I’ve never done anything myself. Everything I’ve done is with teams. So, I wanted someone to help me. I got a young guy who’s never written a book before, but I liked him. And we did this together. But as we wrote the book, I got into it and after about 8 months, I said, Zander, this is really boring to read. I said, because we’re writing this book in the third person. It’s like a business story.

What’s interesting is not what we did, it’s why we did that. You know, and I said, let’s write it from my perspective in the first person, almost like a memoir. And I want someone to feel like they’re a fly on the wall, as Apple imagined these stories as it went through this period. But beyond that, they were inside my head. And so, to do that, we had to tell the story through my lens. But then it came down to what influence. That’s what got the geography mind. So, we had to back up a little bit to my childhood, to what I learned at Target. And then from there to what happened at JCPenney.

And so, the book, I think, will be appealed to anybody because it really amplifies lessons that you haven’t thought about before, like the one we talked about. What is a personal geography? What is your inner voice? How do you build a store based on love? Loving customers, you know, that’s what we did on Apple and how we you know, everything. How did we create something, imagine something like the Genius Bar? How did we imagine putting the store underground at Fifth Avenue and ultimately change the skyline of Manhattan at thirty-two feet when that’s typically done at 55 to 60 story and more high. You know, so as you read these stories, it’s going to inspire you, I think, to work different, think differently, imagine differently, treat your teams differently.

I think it’s, you know, I love the book because I spent a lot of time trying to tell the story in a way that people would take away lessons, you know. Because books influenced my life. And but usually I’d read a whole book, and it wasn’t like I took a framework. There was one thing that happened that I go, aha, I understand that. That’s what I want to do. It wasn’t the whole book. It was a little snippet. And I hope when people read this book, everyone might find something different that appeals to them. Yeah, it sounds like you’re curious on geography. That’s one of the important themes of the book, but it’s not the only one, you know, so we’ll see.

Skot Waldron (53:16.00)
Yeah, I think that personal geography is fascinating. I mean, we think about it in marketing is, you know, some of us, right? And it’s different. I think it’s much deeper than just persona development or, you know, your avatar or whatever that is, right? But I think it’s more about understanding your own inner workings to understand your behavior. And I think that’s kind of what this whole interview, this whole journey has kind of been about for me, is really thinking about how great organizations, how great leadership can design human experiences that actually influence behavior. And when we think about that, isn’t that what we’re here to do is influence behavior. I mean, for the positive, right? Not manipulate, but influence. We all want to influence, be an influence. And those people that have influenced us in life, we honor them forever. And I hope one day that I can be that for somebody else.

Ron Johnson (54:21.00)
Yeah, that’s good. That’s good. Well, it’s kind of like if someone were you know, I want to, I believe in healthy eating. I want to communicate the value of eating healthy. I’ve got a product I want to do. But if they were trying to not just sell a product but change how a customer valued food, they’d communicate to them differently. This is one piece of how you’re going to eat the food. You know what I mean?

The Apple store wasn’t about selling a product, it was about improving your life overall. How communicating with your loved ones, how making digital scrapbooks and movies and capturing moments of your family would improve your life, you know? And if more businesses looked at the impact of their connection with the customer on how it changed their life and not how they just sold a product, I think we’d have a big impact, you know?

Skot Waldron (55:20.00)
I think so too. I think so too. No, I think we all get it. I think we all get it, Ron. And Apple’s a beautiful example of that. I think the Apple store and what you’ve created there, I think is, you and your team, I mean, is going to be ingrained in the souls of our culture forever, right? It’ll be down in the history books of something that did retail different, and it was just and it wasn’t about retail, it was about thinking. It was about how do we approach the human experience in a way that connects with people on an emotional level and helps them feel seen. And I think that’s what we all need to do.

So, thank you, Ron, for sharing your thoughts and your stories with us. This has been amazing, great experience for me. I was excited to have you on the show. I’ve been looking forward to this a lot. So where do people get in touch with you if they want to just, you know, chat it up with you Ron?

Ron Johnson (56:22.00)
You can just reach out to the website, ronjohnsonshopsdifferent.com. It’s kind of long, but it’s the title of the book, Shop Different. And they can go on there and connect with me, learn about the book. The book comes out September 22nd. You know, it can be pre-ordered today, you know, I think it’s a good book. So, I’d hope people are interested in what we’ve talked about. I think they’d find they’d enjoy the book as well.

Skot Waldron (56:47.00)
Good. Well, I hope you think it’s a good book, Ron. So, thanks, man, for sharing your thoughts with us. I appreciate it. Good luck with the launch. If you’re listening to this after it’s launched, then you know, you can get it wherever books are sold, I’m sure. with Harper Collins, I’m sure that it’s out there.

So, thanks again, Ron. Have a beautiful day.

Ron Johnson (57:09.00)
You too, thank you.

Skot Waldron (57:15.00)
I’ve got a little bit of the good feelings there. A little bit of the good feelings, especially when I had the little aha moment. You probably heard it in my voice about how I’m going to think different when I go into an Apple store now. And you probably will now too, as well as you think about Ron’s mom. Ron’s mom wanting to create a space where everybody belonged, where everybody wanted to come together and she cooked for them and created an environment where they felt welcome. That is what the Apple store was meant to do. And I believe that it accomplished that on several fronts. Regardless of what you think about Apple and what they do and how they do things, that was something that was way different than a lot of other retailers at the time and what they were establishing. That was amazing.

This JCPenney experience that we talked about as well was very impactful for me to hear, I mean, what can we learn from that experience? Most people, that’s you don’t talk about that. But when we talk about it, we reveal the gold that was hidden behind that experience and what we can all learn from that about change and implementing change inside of an organization. I’m talking a lot about change right now, y’all. Whether it’s a keynote, whether it’s a breakout, whether it’s you know, with my clients, there’s always change going on.

And Ron taught us a few things. Number one, let’s seek to understand, let’s get buy-in. From the people that have been establishing this thing for a long time. Let’s understand what’s going on. I’m going to argue that a little bit of this fast movingness, a little bit of this whatever was Ron’s self-preservation, him trying to prove something, him afraid of losing something, him trying to answer to the finite game of the stock market and shareholders. Like there’s all of this that those probably building up in him, I’m going to argue.

The second thing, slower change implementation. And I know, I get it, I hear it all the time. Leaders that just want to push, push, push, go, go, go. We have no time to waste. Well, what are you doing while somebody’s foot’s on the brake and your foot’s on the gas? All you’re doing is burning a bunch of stinky rubber and creating smoke and debris, and you’re burning out your tires faster. And everybody’s like, what’s that smell? Well, that is your company burning up because that’s what happens when you implement things too fast. When you implement things without considering other people and how they want to move along.

73% of the population, y’all are present-oriented, meaning there’s going to be potential there for 73% of your organization to have their foot on the brake. Okay? Potentially. Not everybody, but potentially. Think about that. Three-fourths of your organization may have their foot on the break. Wouldn’t it be advantageous for you to try to bring them along in a way that helps? Y’all, this is all about human behavior. This is all about what we can do to implement change in a way and create experiences in a way that get buy-in, that help us build influence and help us, ultimately, create the impact that we want in life.

If you want to find out more information about me or check out the show notes where there’s going to be more information and links to the things referenced in this episode, visit skotwaldron.com. And lastly, I’m asking for a little bit of love, just a little bit. So please take a moment, follow, rate the show. The algorithm is like that; it helps me get the word out. I really appreciate it.

Thank you. And until next time, stay Unlocked.