JC Penney Silo Master


Well, they fired the JCP CEO.  While I never want to see anybody lose his job, this one was certain to happen if the company has a snowball’s chance in Hades of surviving. And it might not.  It took too long for everybody to figure out what they needed to do.  I saw this one coming when the new CEO threw away his customer base and tried to replace it with youngsters with no money and no desire to shop where grandma shopped.  He failed to realize that there are FEWER of them than there were of the original customer base, and more choices for them to utilize.  Duh.  And, JCP stopped offering quality merchandise and instead packed the stores with junk NOBODY wanted. And…these stores are usually an anchor store in a mall where the lease is HUGE.  Is this ROCKET SCIENCE?  No.  I’ve done rocket science.  This ain’t it.  JCP used to be my only place to go for great quality sweaters.  Even the higher end stores couldn’t match their value and quality with regard to, in particular, their Spring sweaters. I went there for sweaters; and I bought everything else I needed.  I loved their housewares department before they stocked it with junk.  But that’s not THE main reason JCP failed.  It failed because the new guy wanted to build a silo.

I see this kind of thing happen all the time, and it’s not new.  One author I read recently  (I can’t remember his name) coined ‘silo building’ (Google him and find his book; it’s really good).  Here’s how it goes…

First, a paradigm is created where one or more entities within a company have a need to break out from the pack at the expense of the team (maybe not even realizing they are nuking the team).  Maybe it’s not a paradigm; maybe it’s just one giant ego being brought on board who wants to MAKE HIS MARK (dogs just pee on it and maybe if people did that we’d all be better off). So that person creates his own little empire (his goal all along and in fact his NEED) and starts stacking these slightly curved blocks… building a silo…around himself and a selected few.  Silos don’t have windows, mind you; they don’t need them.  But the PROBLEM with that is that there’s no communication possible and the problem is, also, that once the underground competition sets in, you CAN’T communicate because all you could say is, “I’m trying to beat you.”

Once the silo builder starts building his tower, others have to do the same or risk being overshadowed.  Besides, in the beginning, the silo builder looks like a star; he’s having all kinds of success!  He makes others look like they’re napping…but there’s a reason for that.

Okay, let’s have an example; let’s say you’re in retail.  Retail establishments are RIFE with silo builders.  So the first silo builder essentially forces other entities within the company to follow suit, and before you know it, you have building blocks half way up and resources become GOLDEN.  You need resources to build silos after all, and the higher the walls the more resources (people, money) you need.  Chances are you’ll get them because…well you look like a star right now, remember?  But what’s really happening is that the first nail in the coffin of the organization as a whole, has just been hammered in.

So there becomes a built-in, destined competition for resources, usually the low wage earners who are running like horses to make the managers’ wishes come true.  Silo builder number one gets most of the resources because at first, he’s the only one who knows what he’s up to AND he probably doesn’t realize or care that he may be killing the host.  He’s just focused on making his vision a reality and that’s not a bad thing in and of itself, but it’s very dangerous for an organization that needs balance and nimbleness to respond to customer needs and desires.

Okay, so let’s say he’s in charge of the stock room, only that.  Once he has the lion’s share of the resources, the stockroom is going to start to look VERRRY good. The shelves will be stocked neatly; everything will be labeled, the floor will be swept.  It’ll be GREAT…At the expense of the appearance of the store, the place where CUSTOMERS are, and in fact at the expense of customer service…which is the supreme savior of retail.  Also in the crosshairs now, is the morale of the others who are trying to make their retail establishment competitive and customer friendly, who are trying to do their job and that of at least one other…who is now in the main silo.  Everybody outside the primary silo becomes frustrated, exhausted, and a failure…because nobody can sustain that kind of workload and because the workload BECOMES unmanageable. Individuals can do the work of one, maybe two, on a sustained level, but not three or four.  Plus, these people, remember, are the low wage earners.  There’s not a lot of incentive to run a marathon every day, month after month, particularly if you’ve already failed at the start because the workload outside the primary silo, has become…unmanageable.  If, in retail, the employees outside of the primary silo become worn out and unhappy, frustrated and edgy….guess what happens to CUSTOMER SERVICE, the supreme savior of retail?  Right.

The primary silo builder grabs the best of the best resources…because that’s what he needs to make his vision a reality (it’s what anybody would need or want, right), leaving the other lagging silo builders to compete for the other, less desirable or maybe less qualified ones.  Nobody’s happy at this point except the primary silo builder and his resources.  The primary silo builder is getting recognized, and his resources are getting good pay, nice hours.  And by the way, the workforce budget is spent behind the walls, where the customers never go.

Now that’s not all bad.  There are good reasons to have a neat and organized operation, where you know what you have and where it is and where everything’s clean and neat.  But…not at the expense of the appearance of the shopping areas, where the customers are, customers, who can kill your operation just by NOT going there.  If you consider that customers are more entitled than they have ever been, more demanding of stellar service…it wouldn’t make sense to deliberately erode that service, would it?  No.  And silo builders usually don’t realize they’re doing that.  They are just trying to make their mark, make their vision a reality, get a raise, get a promotion, be recognized, prove their worth…all that jazz.

So, the lagging silo builders have not only been crippled with respect to the best and the brightest, but now they have to try to make it work with FEWER of the middle of the pack employees. If they DON’T make it work, their upper management will tear them up, comparing them to the primary silo builder (not realizing he’s sinking with the REST of the ship), and hence eroding the morale of the other silo builders.  The morale of the workers is already tanking and now the managers, the secondary and tertiary silo builders, are falling too.  Uh oh.  Too bad the higher level managers can’t see this.  Don’t feel bad; they didn’t see it at JCP either.

There are places where silos are okay.  Farms.

Retail is the WORST place for them because in retail, things change on a dime and the entire operation has to be able to not only change direction in a second, but also do it while making the customers ecstatic.  So they’ll come back.  So they won’t go to the PLETHORA of other places they COULD go…and WILL go if their needs are not met. And…this is important…the workforce here MUST be happy, because they sure aren’t there for the money.  And they won’t stay if they aren’t happy.  So if you’re already running lean and you lose your best ‘leftovers’, oops.  Real trouble.

What seems important to me, a real nobody, is that teamwork is important in retail and so is foresight!  JCP turned their focus inward, onto themselves, and worked like all get out to build a great little silo with little lounges and vignettes…but they forgot to ask the customers what THEY wanted.  It does no good to make a mark if nobody SEES it, or, more importantly, if it’s a colossal failure.


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