Mitchell Schnurman: J.C. Penney’s ex-CEO went rogue after a back channel failed

Mel Fugate, management professor at SMU's Cox School of Business, talks about JCP ex-CEO speaking out against the current efforts of the current CEO.

By: Mitchell Schnurman

Some rants are spontaneous, more by accident than design. But Allen Questrom’s attack on the leaders of his former company, J.C. Penney, was calculated for maximum effect.

Questrom, a retailing legend, went public last week, telling CNBC and The Dallas Morning News that the retailer should dump its top executive and his failing strategy. The former Penney chairman and CEO said he wanted to pressure the board to act before it’s too late and more jobs are lost.

“I had so many calls from employees, [asking] ‘Can’t you do something about this?’” he said in a phone interview, adding that he probably should have spoken out earlier.

Questrom said that he contacted a director last year, urging Penney to test its new strategy in limited ways. By going through that back channel, Questrom was playing the usual corporate chess game and trying to wield influence without a lot of drama.

But the board didn’t change course, and results only worsened. After Penney reported a steep drop in sales and a full-year loss of nearly $1 billion last week, Questrom went unplugged.

He said the board couldn’t be delusional like Ron Johnson, the current CEO. Johnson wasn’t reliable, Questrom said, and was putting nails in the company coffin. Penney shouldn’t wait another quarter, he said, and it was a travesty that the board cared more about Johnson than employees.

He also said he had no second thoughts about airing his criticism.

“This wasn’t a complicated decision for me,” Questrom said.

Maybe it should have been. Penney is in a tough spot, early in a transformation, and employee morale is flagging. At most companies, even troubled ones, a beloved ex doesn’t rip a successor, and not just out of respect and professional courtesy. It makes the situation worse, not better....

“I would be surprised if the board did anything” in response, said Mel Fugate, associate professor at the Cox School of Business at Southern Methodist University....