A lesson in radical management: iterative development
Mr. Johnson set out to delight his customers, which was good. What wasn’t good was assuming that he knew what would delight the customers. Delighting customers is tricky. An iterative approach is always critical. As Peter Drucker noted in 1973, what the manager thinks is value is never exactly what the customer sees as value. It is only by continual iteration that the manager can learn what works.
Above all, Mr. Johnson destroyed his existing business model before the new business model was put in place. As David Cush, Virgin America CEO said this morning on CNBC’s Squawkbox: “Don’t destroy your old revenue model before you have proved your new revenue model. That’s the box that JCPenney has put themselves in.”
Was Johnson’s idea itself flawed? Offering Better product and being more honest with the consumer. Was it too much too fast? Or was the idea itself ok?
Mr. Cush said, “It was a great idea. But you have this massive structure that you need to support. Revenue supports your structure. You’ve got to make sure that the new model works before you destroy the old one.’
