As Apple’s (NASDAQ:AAPL) retail chief, Ron Johnson walked on water. It’s one thing to be the mad genius behind the iconic Apple Store and Genius Bar; it’s another matter entirely to build the most valuable retail space in America … selling computers and consumer electronics, of all things.
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You’ve got to admit that’s pretty heady stuff. Besides, it’s hard to imagine what it must have felt like to be a chosen disciple to join in the second coming of Steve Jobs and lead Apple’s remarkable ascension to the top of the corporate world. Come to think of it, it’s not that hard to imagine. I bet it felt great.
And yet, Johnson gave all that up to run J.C. Penney (NYSE:JCP). Just think about that for a second. You’re one of the top guys at Apple. You helped build the most valuable company on Earth. Then you’re CEO of a commodity clothing retailer.
Yes, I know Johnson worked at Target (NYSE:TGT) before Apple. I can almost see going back to run Target. At least Target has some cache. But Penney? That’s sort of hard to make sense of. Maybe the guy fell and hit his head on something. Who knows?
No, that couldn’t be it. The madness continued well into his tenure. Lest we forget that the guy gutted the company and its stores from top to bottom essentially betting the farm on a bizarre and grandiose strategy to remake the retailer into an apparel version of Apple. All without test-marketing the idea first. Not a good move.
You all know what happened next. Customers fled to Macy’s (NYSE:M), sales plummeted, and investors shouted Sell! Sell! Sell! Everyone abandoned ship except the mannequins, although I’m sure even they were pretty depressed just standing around doing nothing in all those empty stores.
When he was ousted by the board, Johnson’s reputation was worth about as much as Penney’s share price. Wonder if he has any regrets about leaving Apple, grasping that particular brass ring, or thinking he could somehow magically turn coal into diamonds. We may never know.
Snarky cynicism aside, there is a much bigger question here. Why did he do it? More to the point, why do they do it? After all, Johnson is far from the only successful executive to give up a prestigious gig at an industry giant for the chance to run the corporate equivalent of a popsicle stand.
Don Mattrick left Microsoft (NASDAQ:MSFT) where he was president of the software giant’s interactive entertainment business – aka Xbox – to become CEO of troubled social gaming company Zynga (NASDAQ:ZNGA). Investors applauded Mattrick’s move to FarmVille, but a year later, revenues and the stock are heading south while the losses continue to pile up like, let me see, what would be the farm analogy? Um, never mind. Let’s just say that Wall Street is holding its collective nose.
Hotshot executive Marissa Mayer quit Google (NASDAQ:GOOG) to take the reins at Internet also-ran Yahoo (NASDAQ:YHOO). While the self-proclaimed workaholic has stayed very busy handing out free stuff to employees, buying companies, selling Alibaba stock, and hiring and firing executives, stemming the slide of Yahoo’s core advertising business remains considerably more elusive.
Those are just some recent high-profile examples but there’s plenty more where they came from. I myself once left a sweet gig as the number two guy at a high-tech company with an IPO in the works to roll the dice as CEO of a startup that had a very good chance of going nowhere. And it got there, all right.
So what makes highly accomplished executives quit the life to take a flying leap into the great unknown without a safety net? Five reasons come to mind:
Because it’s there. Why do people attempt to climb Mount Everest? It’s the challenge. What about the risk? As I told my wife just before leaving a small fortune on the table and making the biggest mistake of my career, “Never tell me the odds.” (Nod to Han Solo in The Empire Strikes Back)
They were passed over. By my observation, Marissa Mayer was stuck at VP, having been passed over for a coveted senior veep role at Google. Likewise, when Satya Nadella was picked to run Microsoft, Tony Bates bolted. Now he’s president at GoPro (NASDAQ:GPRO).
They’re like sharks. Some people can’t sit still, even if it is in a plush chair at a cushy job. They’re just not good with complacency. They’re never content. They live to learn, to grow, to try new things. Gilded cages can only hold them for a while. Like sharks, they have to keep moving to survive.
The Peter Principle. Robert Browning wrote, “a man’s reach should exceed his grasp.” And how do we know that we’ve taken our skills and the gifts God gave us as far as they’ll go? When we reach our level of incompetence, of course. Peter was right.
Ego. You’ve got to admit, CEO does have a nice ring to it. Some people get off on being #1, the boss, the head honcho. Considering how many leaders of one-person companies now call themselves CEOs, this may be a more common reason than you’d think.
For those that say it’s all about the money, au contraire. Johnson actually paid big-time for the privilege to be CEO at Penney, investing $50 million in stock warrants worth zero if the stock is less than $29.92 after six years. And Mayer was already worth a fortune when she joined Yahoo.
When it comes to decisions like this, money is usually not a primary motivator. It certainly wasn’t for Johnson. I just think that, after years of living in the shadow of other leaders, he had an opportunity to reinvent a storied company. To put his experience and vision to the test. He just couldn’t pass that up. And I don’t blame him one bit. Neither could I.