Tuesday, November 12, 2013

Fearless at J Crew

What if you could triple the size of your business in 10 years?  Would you be happy?  That could be pretty easy if you were a $1/2 million small business but what if you were J Crew and generated hundreds of millions of dollars in sales in 2003?  That would be an accomplishment.

In a recent article in Fast Company they profiled J Crew with a special emphasis on Jenna Lyons, the President who makes interesting tabloid material in the New York area and in particular the business relationship she has with CEO Mickey Drexler, the former GAP CEO.  That combo did exactly that in 10 years and put J Crew back on the map in the retailing world.

Possibly even more exciting than the result is that they did it by being brave.  They have a risk taking culture with design, understand the value of a long-term perspective, and deeply understand the individuality of their business and the people in that business.  Lets look at their comments from the article for all three areas of bravery.

1. Risk Taking -  one of the key areas that J Crew has been able to revive their brand has been through fresh and exciting design.  But that didn't happen by accident and it took fresh thinking and risk taking to create a buzz necessary to regain its stride:

"Under Drexler and Lyons, J. Crew would become a company of constant and freewheeling experimentation, iteration, adaptation."   

 This is borne out in its constant churning out of new brands that are spun out from great hits and an identification with a niche customer group such as The Ludlow Shop and the Liquor Store that serve as Petri dishes for new products and concepts.

"Before Drexler came to J Crew designers were ordered to develop products that would meet specific merchandising goals.  'We were told we need this bucket and this bucket', says J Crew head of women's design Tom Mora.  'I need a merino sweater that is $48 that has a stripe.' And you are jamming your design into that bucket and that's what you get a design in a bucket.  Drexler told Lyons not only to scrap the buckets but also she says, 'Don't tell me what you're doing, don't show any of the merchants, just go and do it and then show me.' In generating those designs, Lyons' style and manner give her staff implicit permission to take risks."

2. Long-term perspective - Despite spending a little time during the past decade as a public company, J Crew was taken private again 5+ years ago.  It left an interesting mark on their view of how investor pressure creates fear and short-term thinking that is not best for good decision making:

"Its aggravating to be a public company.  People who own stocks could not care less about the long run.  Everyone in the world has a quarterly report.  Your owners and investors are looking for a result.  But it takes 5 or 10 years to build a company." - Drexler  

The article goes on to say, "when I ask Lyons how going private in 2011 helped the company, she immediately cites the freedom to invest more in IT infrastructure - not the first thing you'd expect to hear from a native creative.  'It's hard to make those kinds of capital expenditures when you're public.'"

3. Individuality - In addition to being unique individuals who express their own individuality in a world that can be unforgiving to those who are not the prototypical beauty we get a glimpse of how Lyons and Drexler have been able to create a culture that now only supports individuality but uses it as a competitive weapon.

"When experiments don't work out as well, all Lyons requires is for her staff to assume responsibility 'Jenna really loves people who are themselves, flaws and all"
The last quote from the article doesn't exactly fit neatly into one of the three components of fear cultures but is a revealing anecdote of what creates fear in corporations today.  The quote is from Drexler and speaks to the root of many of the causes of fear in our corporate cultures - and that is protecting what you have....
"America's companies are built to destroy creativity.  If you become the head of a big company today, you're not the youngest person in the world.  You have a contract.  You get a jet.  You have a huge overpaid salary.  You get bonuses.  Do you think that CEO is going to screw around with fast, creative change?  No.  And the board of directors, the last thing they want is someone who's going to change things."