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Posted: September 30, 2013

A half-caf, nonfat strategy

It's not going to work

Todd Ordal

Taking a hard right with your strategy is a harrowing experiment. Just ask Ron Johnson and Bill Ackman, JCPenney’s former CEO and his previously supportive board member, respectively, who’ve both been bounced out of the company. Reed Hastings at Netflix also understands this, but so far he’s been relatively successful.

The difference between the JCPenney and Netflix stories is fascinating. Both companies realized their business model would no longer work (see JCPenney and Netflix). Both charted a new course, both required dramatic change and both initially lost many customers. Netflix recovered. JCPenney didn’t, at least not yet — and I don’t like its chances.

I think Johnson, who’d previously run Apple’s retail stores, was probably courageous, as is Hastings (see Courage). I don’t want to oversimplify this, because I don’t believe the JCPenney strategy was thought through as well. However, it’s also entirely possible the difference was because Netflix was all in while JCPenney caved in.

When business demands that you take a hard right, you can’t waiver. If you’re like the woman in front of me at Starbucks today — unsure about the size, caffeine dose or foam — you won’t have a shot at success. My favorite coffee shop calls a decaf, nonfat cappuccino a “why bother.” A close cousin of “why bother” is “I can’t decide,” like the strategy embodied in the sign below. Specialists in… everything!

When a fast-approaching brick wall confronts you, there’s no guarantee that a new direction or strategy will be successful. But it’s certain that if you do the same things, you’ll get the same results. Hope is not a strategy. Make a choice and give it the time and energy it deserves!

Todd Ordal is President of Applied Strategy LLC. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He speaks, writes, consults and advises on issues of strategy and leadership. Todd is a former CEO and has led teams as large as 7,000. Follow Todd on Twitter here. You can also find Todd at http://www.appliedstrategy.info,  303-527-0417 or todd@appliedstrategy.info

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