Does Ron Johnson’s Flame-out Hurt Apple’s Aura?

There have been a lot of stories written over the last few days analyzing the departure of former Apple Inc. executive Ron Johnson from the top post at J.C. Penney Co.

The Wall Street Journal, where I work, wrote that Johnson’s failure showed how hard it was to run a struggling chain, a challenge made worse by Johnson’s refusal to follow industry practice of testing price and product changes first before widely rolling them out.

Shoppers were turned off by Mr. Johnson's decision to reduce clearance sales and didn't come back when Penney started to reintroduce markdowns last year.

The New York Times cast Johnson’s stint as a clash between fast Silicon Valley ways and the stodgy culture of a 111-year-old retailer. Johnson never relocated to company headquarters in Texas and ordered slim cut suits and other merchandise that did not play well with Penney’s conservative customers.

But does Johnson’s departure have anything to say about Apple as a talent magnet? With Apple stock down more than 35% in the last 7 months, the fall of Johnson seems to reflect Apple’s fading fortunes and cred as much as anything else.

When Johnson was tapped to run J.C. Penney it was hailed as a brilliant and bold move. A lot of that praise had to do with the fact that Johnson was a senior executive at the most ascendant company in the world--Apple.

Surely the Apple magic would wear off on J.C. Penney. But clearly it did not, at least in this case.

The saga of Johnson underscores a perennial challenge with management and recruiting. How much of a person’s success is attributable to the person or the company they’ve worked at? Or put another way, when you recruit a thoroughbred star, are you betting on the jockey or the horse?

The same whispers were heard about Tim Armstrong when he was lured from Google four years ago to take over AOL. Armstrong is still in the job, and AOL’s stock has been on a tear lately as AOL showed its first overall revenue growth in eight years. Investors are signalling that Armstrong's consistent strategy of turning the one-time Internet access company into an advertising-led digital media company is finally making progress.

For a counter-example look at Hewlett-Packard Co., which recruited a respected software executive from SAP, Leo Apotheker, to run the company after Mark Hurd stepped down. Most observers agreed that HP needed to beef up its presence in software, but Apotheker was fired 11 months later after strategic flip-flops on PCs and mobile devices and an expensive software acquisition that backfired.

One lesson, it seems, is that companies sometimes overestimate the value of a person’s workplace in their performance. Of course, people gain valuable experience working at certain companies, experience that may not be obtainable elsewhere.

But in retrospect, it seems like the magic of Apple stores had less to with Ron Johnson and more to do with the great products of Apple. A great product will sell in practically any environment, whether it's an iPhone or a Google search ad.

Psychologists refer to this as "attribution error"--the tendency to ascribe success or failure to innate characteristics, even when context is overwhelmingly important.

The bottom line: Making sure a person has the right personality, strategy and overall skill set for a job seems just as important if not more than their golden pedigree.

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