Columbia Business School Professor Rita McGrath asks an interesting question on her blog this week. She ponders whether the situation unfolding at Lands' End may be eerily similar to the fiasco that took place at J.C. Penney when Ron Johnson was hired as CEO. She's commenting about a Wall Street Journal feature story about the culture clash taking place at Lands' End as new CEO Federica Marchionni attempts to revitalize the apparel retailer. The former Ferrari and Dolce & Gabbana executive has taken over as CEO of the Wisconsin-based retailer, and she's trying to make the brand more fashionable. She tells the Wall Street Journal that her goal "is to evolve Lands’ End into a meaningful, global lifestyle brand.” The key question: Can she reignite growth at the firm without alienating traditional customers as well as her long-tenured employees?
Why has a culture clash emerged? For starters, Marchionni has decided not to work primarily from the corporate headquarters. The Wall Street Journal reports:
As part of her contract, the Lands’ End board agreed to let Ms. Marchionni work primarily from an office in New York’s garment district—an arrangement that rubbed some in Dodgeville the wrong way, according to former employees. Her employment agreement says she must be in Wisconsin for holiday parties and other social events that the Lands’ End CEO “historically has attended.” Joining her in Manhattan is a small group of fashion veterans including Joseph Boitano, a former Saks executive who serves as the company’s chief merchandising and design officer.
Marchionni has also been critical of some of her own company's clothes, describing certain traditional Lands' End items as "ugly" in one presentation. There are other changes that have made some waves:
The CEO ordered up a slate of new ads to run in the September issue of Vogue and other fashion titles. She commissioned celebrity photographer Bruce Weber to shoot a major holiday campaign. The full-page newspaper and magazine inserts showed patrician-looking models in coastal settings. Spiked red heels now featured alongside comfy slip-on moccasins.
Professor McGrath acknowledges that Lands' End faces substantial challenges and needs to change. She wonders, however, whether Marchionni can lead in a way that brings her people along. Can she create an inclusive vision for the key employees? Or, will culture eat her bold new strategy for lunch? I don't know the answer to these questions, but I cannot imagine how leading a company from 1,000 miles away makes much sense. It creates problems at two levels. First, symbolically, it sends a message to employees that you don't want to engage with them, be available to them, etc. Second, substantively, it isolates you from the rank-and-file, making it more difficult for critical information (including bad news) to reach you in a timely manner.