ADI IGNATIUS: I’m Adi Ignatius.
ALISON BEARD: I’m Alison Beard, and this is the HBR IdeaCast.
ADI IGNATIUS: So Alison, today we’re going to look at an executive who has had a fascinating business career, who achieved phenomenal highs and then endured humbling lows. Someone who brought the same playbook to two different companies, and it worked at one and it failed at the other.
ALISON BEARD: Okay. I’m definitely intrigued. Who is this?
ADI IGNATIUS: So this person is Ron Johnson, who killed it at Apple, working closely with Steve Jobs to invent and then roll out the Apple Store. He eventually left Apple to become CEO of JCPenney, a more modest department store chain, and there his big ideas simply didn’t work.
ALISON BEARD: Okay. I followed both of those stories as they were happening, but I don’t know all the details, so I’m interested to hear more.
ADI IGNATIUS: Well, here we go. So Ron is the author of a new book, Shop Different: How Retail Revealed Apple’s Genius. And we talked about how he delivered on an ambitious vision at Apple, even bringing along an initially skeptical Steve Jobs. And we talked about what he learned when the same brash approach didn’t work at JCPenney. Here’s our conversation.
I want to start with your time at Apple. You’d come from Target, you had developed an expertise in retail, Steve Jobs brings you in to create the Apple Store, the challenge of a lifetime, right? Talk about what you learned from that experience, but particularly in terms of how to serve customers.
RON JOHNSON: Yeah. Well, I had the privilege, as you just said, of creating the Apple Stores alongside Steve Jobs. And I had been 15 years in retail. But it was a whole new thing because at that time there really wasn’t a good technology retail experience. They tended to be operated and owned by people that knew technology, but didn’t know retail.
So I had the chance to think through what the experience should be from scratch. And the big challenge was, like anything you do in business is, who’s your customer and what problem are you trying to solve? And Steve and I decided that Apple’s big opportunity was to go after all the people who had yet to join the computer revolution.
In 2000, we were moving from analog to digital, and so we were trying to get people who had never bought a computer before, and we thought the Mac offered a much easier, better to use solution, and we could differentiate the stores and serve customers in a unique way by going after people that were technology novices.
ADI IGNATIUS: So it was on a hunch, right? I mean, you’re opening stores in malls for a product that people typically buy once every few years.
RON JOHNSON: Right.
ADI IGNATIUS: I know you had a lot of people saying, “This is ridiculous.” Talk about, I guess, how you deal with confidence in your vision versus questioning your vision and the lack of certainty. How do you make the decision, we’re going to do this?
RON JOHNSON: Well, you got to remember, as you know, Adi, back in 2000, the world had a lot less data to rely upon. I came from Target. We didn’t use email. Our sales reports would come in once a week and all of our data was based on weekly sales reports. Sure, if I worked really hard, I could find out what I sold yesterday, but it was a different world. And so people were trained to operate on their instinct.
Steve famously believed that the only way to create something great was to imagine something that’s never been done before and do what you believe is right, and people will understand it when they see it. So I was working for a boss who wasn’t that much data-driven or didn’t work with focus groups. So when we created the Apple Stores, we had to trust our instincts.
So for example, the question is, where do you locate a store? As you mentioned, the history had said if someone’s going to buy something every four or five years, you want to locate in a low cost location, they’ll come to you when it’s time to buy because it’s much more expensive to be in a place that depends on frequency. It’s like the Gap would want to be in a mall because people are buying their clothes all the time. They want to see what’s new. A computer will come to you. However, Steve and I knew that it was unlikely that someone get in their car and drive 10 miles to go check out a Mac. If we were in a mall where people shopped, we had to get them to go 10 feet out of their way. And that seemed like a lot easier problem to solve, and we believed in our bones that if we got people into the store, got their hands on a Mac, talking to one of our highly trained people, we had a chance to win. But the big thing we couldn’t do was afford to open a store and not have traffic.
ADI IGNATIUS: So I want to get back to this instinct versus data question because look, Steve Jobs was incredible. We know this. He had these visions, but he had failures, and our most confident instincts are not always going to play out successfully. So this one worked, but what would you say, what’s your advice in terms of, all right, you’ve launched something, and in this case it’s like we’re not going to know until we launch it what we’ve got and how the market will respond. But how far can you push that before you have to say, “All right, maybe this wasn’t the perfect idea”?
RON JOHNSON: Well, you’ll know, you’ve got to read the results of what you did, but I am a believer, and I’m pretty well known for this, for trusting your instincts. I really believe that especially now, we’re in a world with AI where what’s common knowledge, whatever’s been learned in the entire universe up until today is a query away. So common knowledge is easy to find. If I were creating the Apple Stores today and I was going to interview with Steve, I could say, “Go to ChatGPT. ‘I’ve got to build technology stores for Apple. Give me a 10-part strategy. What should I do?’” Not a single thing it would’ve recommended back in 2000 is what we did at Apple.
And so it shows the power of what we bring to work is our own inner voice. It’s that instinct that is formed through our personal life experience, and it’s really important. So example, you wouldn’t put stores in a mall. We put stores in a mall. Then the next thing people said, “You got to hire really high technology people who love technology, know technology, and put them on a commission because you’re not going to have a lot of traffic and it’s really hard to convince someone to buy a $2,000 computer.” Well, we didn’t have anyone on commissions. We hired people from bookstores who loved people first and we taught them technology.
We built a store that was 6,000 square feet. In retail, they’d say the size of the store should relate to the number of products you have. And so if you have a small product line, you can have a small stores and be very productive. But when I talked to Steve, we’re trying to get people to believe in Apple as a brand, you’re going up against Microsoft, which has a 95% market share.
Is the Apple brand as big as the Gap? Was the question I asked him. He said, “Bigger.” And I said, “Well, if we’re going to be in a mall and we want to look relevant, we ought to have a store the size of the Gap.” And that got us to the 50 yard line where you want to be in retail. But none of these things would’ve been supported by data or by some consultant that we might’ve hired to go do the stores.
So we made all these bets, but the problem we were trying to solve is we had to get traffic into the store. The mall did that. We knew people would take four or five times to buy it. We had to have friendly people to get them back, and we had to get their hands on a computer. And once we solved those things, volume started to come. So I really think we got to be very careful about depending too much on data because data’s going to study what’s been done before. All innovation stems from your imagination. By definition, innovation is something that’s never been done before, from my perspective.
ADI IGNATIUS: I want to talk a little bit more about Steve Jobs. I think we’ve written an article called The Leadership Lessons of Steve Jobs and the Real Leadership Lessons of Steve Jobs. People want to figure out was he unique or are there things that he did that people can apply in their company? What was his business genius, maybe things that you encountered that people even today aren’t that aware of that contributed to his success?
RON JOHNSON: The thing about Steve, he was never in a hurry. Now think about that. Look at all he accomplished in his short life from launching the first computer to bringing us digital movies through Pixar, to coming back to save Apple, to the iPod, the music player we all owned and loved that had 80% market share around the world, to reinventing the smartphone, reinventing the phone. Steve did all these things in his life, but he did things one at a time. When he was at Pixar, he would only let them make one movie a year. And he said, “Because we can only do one great movie a year, and we do a great movie, we earn the right to do another one.”
At Apple, we had four products when I launched the store. We decided to do another product, the iPod. Steve spent a year plus designing that with the team. We put it up. It took six years until we launched our next product, which was the iPhone. But Steve said, “We haven’t earned the right to have another consumer product till the iPod was successful.” So one, he was never in a hurry. He did one thing at a time.
Steve was always available to his inner core. Anytime I called Steve at night, he would answer the phone. Anytime he called me, I was available to him. He worked with a small group of people who he trusted, and worked with them in painstaking detail on every little detail. So he loved the detail, and he didn’t want to bring out a product until it was ready.
So some of these products, the phone took a lot longer than people know to get ready to launch. Our stores, we basically were ready to open, and a conversation we had said, “They’re not ready. They’re not right.” And Steve said, “Okay, let’s delay the stores for six months and make them right.” So he was a perfectionist. Everything Steve did, one product at a time, willing to do things that have never been done before, actually loving to do things that have never been done, that’s how you innovate to him.
And then getting it out there and willing it to success. Steve was famous for not backing off on a strategy that he had. These things take time. Steve was very patient.
ADI IGNATIUS: All right, so talking more broadly, I mean, you invented the Apple Store, the Genius Bar within the Apple Store. Before that, you made Target trendy, people who never thought they’d shop at Target suddenly became part of your customer base. What are some things that everyone needs to understand about the customer experience from your perspective?
RON JOHNSON: Well, they’re very simple. You serve one customer at a time. When you’re in the customer service business, the way I always told my team, we’re not in the service business, we’re in the relationship business. Everybody that walks in the store is either it’s their first time at the store where you’re launching a relationship with that customer. They’re coming back again. They might own a product, they might not. You’re deepening the relationship, and if they have a problem, you’re restoring the relationship.
And so I just let people know that, “Look, we’re going to build a great business by converting one customer at a time.” Today, there are two billion people in the world using Apple products, but I remember every one of those, we earned one at a time.
Our stores, when I left, were getting a million visitors a day. The vast majority of them had an experience with an employee, and we always told the employee that, “What you have to do is give them a warm welcome for every customer. What brought you into the store today? How can I help? Answer their question. When you’re done, welcome them back.” You don’t worry about what you sell every day, you worry about the quality of experiences you deliver and then the sales will follow.
ADI IGNATIUS: Well, so you just mentioned good customer service, people on the front lines being whatever, pleasant and paying attention to the customer, but what beyond that? I mean, it can’t just be training the staff to be nice, right?
RON JOHNSON: Obviously they have to love the products. They got to love the products and they got to love Apple, like in our case. But ultimately they got to tailor every solution to every unique customer. That’s the other thing. You got to personalize every experience for every customer. Retail business isn’t about here’s the formula, here’s what you tell to everybody, blah, blah, blah. Every customer has unique needs. They’ve got a different reason why they want a phone, why they’re upgrading the phone, and the employee has to be trained to discover that, and then present a solution that can meet their needs.
ADI IGNATIUS: It sounds like you want to empower people in the front line. It sounds like part of the secret is giving people flexibility to not just have the boilerplate response and have authority.
RON JOHNSON: No, we need flexibility. No. The leadership, you have to hand down. When an employee’s with a customer, they are the leader of that relationship, and they have to feel empowered like a leader, and they’ve got to be told not to be in a hurry. Figure out what you want to do to make a great experience for that customer, personalize it, get to know them. That’s what it takes. When we launched the stores, nobody really knew how to convert someone to buy a computer that never bought a computer before.
But we knew that if we put the employees in and had them talking to customers through those conversations, ideas would emerge. And when good ideas would come up, we’d roll them out everywhere. So example, customer said, “I think I could eventually learn, but I don’t know how I’ll ever get started.” And one of our employees said, “Well, why don’t I set it up here in the store for you?”
First time it probably took an hour, but that customer went home happy. Then we tried it again. And a few years later, every product in the Apple Store was set up before the customer left, whether it’s an iPad, a phone, a Mac, but we learned that through a customer experience. That wasn’t learned through a focus group. In effect, you’re running a focus group every day if you have a way to get in touch with your employees because they’re having real life experiences every day. So then the art for retail is to stay small enough that those ideas quickly move from the floor to the decision makers to get implemented.
ADI IGNATIUS: So fast-forward to the present, 2026, we buy a lot of stuff on our phone. The question is how important is a public facing retail presence in 2026? And even with computers. We know how computers work now. We’ve demystified them.
RON JOHNSON: It is still the most important way to go to market. If you ask people on the street, “Are stores dying?” They’d probably say yes, but we know that’s not true. Look at Simon Mall. Simon’s the biggest mall operator in the U.S. They’re at 96% occupancy. They’ve never been busier. Their rents and their sales per square foot are the highest they’ve ever been.
Stanford Shopping Center where I live in the Bay Area is probably the hardest parking place in the Bay Area, right? People go to stores. Today, 85% of all retail revenue worldwide is coming from a physical store or the physical store’s omnichannel strategy, their online store. So an example, let’s take Walmart. People would say Amazon will compete with Walmart more than anybody. They both have broad assortments of low price goods. Walmart stock today is eight times higher. The market cap is eight times higher than it was in 2000 when the dot-com boom was going and everyone said stores wouldn’t exist.
It just took a while for Amazon to build an online store, move to omnichannel, and leverage that to a better business model. So Amazon’s actually the one that’s struggling in retail. They struggle to make money in retail. The reason they make money now is they have all these ads on their sites. Now they’ve been experimenting with physical retail multiple times over the past decade. Right now they’re building a superstore outside of Chicago to see if that can help them compete better. So the reality, we’re in a world today where people have stores and online, and they serve customers omnichannel-ly. Everyone is doing that. There are very few successful online-only retailers.
ADI IGNATIUS: I want to talk about customers and listening to customers. It’s conventional wisdom, you need to listen to customers, you need to be consumer-centric. So many companies don’t do that well. And why do you think so many companies miss the mark when we all realize it is essential to business success?
RON JOHNSON: Well, because they don’t have ways of doing that. And that’s the beauty of having a retail strategy. Because when you have stores every day, you have a chance to learn from customers. Look at all these new brands that are coming out like Skims. Skims is opening 55 stores this year. They’re funded by venture capitalists, but their go-to-market is physical stores. Well, every time you want to learn something, all you have to do is go to the store and talk to your employees because they talk to customers every day. So by asking questions of employees on the front line, it’s the best way to get real time feedback on a customer. You don’t have to create some artificial focus group and do something online.
And the retailers who have good connections between their headquarters and stores have the most knowledge of what customers want, and that’s where the best retailers. Look at Inditex out of Spain, all the Zara stores. These guys are unbelievable. All of their brands are good. They have the best stores and the best communication systems between headquarters and stores to get feedback. So it’s really important to listen to customers, but it’s hard to do. And so if you don’t have a way to do that, it’s not going to be a part of what you do.
ADI IGNATIUS: So when you look around at other retailers now, you just mentioned some in terms of their Zara stores, for example, but there’s some who just have an experience, you just think, wow, okay, that’s a model. They really get it. That is exciting.
RON JOHNSON: Yeah. I see it in every category.
ADI IGNATIUS: Yeah.
RON JOHNSON: Across all retail and luxury. A brand like Zegna, over 50% of their volume now comes from, 97% of their volume’s in their stores, but over 50% comes from a contact between a store employee and a customer that’s done digitally. It’s not online shopping, but it’s reaching out to that customer that they have great relationships with. So these luxury brands, like the LVMHs, whatever, it’s amazing what they do on serving their customer in a physical store, but through a digital connection, through the relationships they built, through the databases they have, and that’ll get better and better all the time, right?
ADI IGNATIUS: So at Apple, you and Steve Jobs were able to ignore conventional wisdom. It turned out you were spectacularly right with the Apple Stores. At JCPenney, which you went to afterwards, in some ways you did something similar and it didn’t work out the same way. Talk about what was different in the two experiences.
RON JOHNSON: Yeah, the big do. So I went to Penney’s after 12 years at Apple, went there to transform the department store. It failed. I mean, it failed massively, but the difference was this. When we created the Apple Stores, I spent 18 months. I was the only employee. We didn’t have a retail store. I built the team. We were all bought in, we launched, and we succeeded. When I went to Penney’s for a variety of reasons, I brought a vision for the stores that the employees didn’t embrace.
I was the transformation they didn’t want to have. And when I went there, I assumed, I had been told that this company wants to change, but the reality is the employees believe they had survived. All these department stores have failed. In 1960, there were 150 department store nameplates in the U.S. When I went to Penney’s, there were maybe 10. They felt they had survived, and they were the winner of serving lower income middle Americans.
So the employees didn’t feel a need for change, and I misread that. And so if I did it over again, I would’ve taken at least a year working with that team to understand, do I have the right people to lead a transformation like this, to get people on the same page, because everyone’s got to believe, to hear their input, to spend time with customers, to understand how to best position the changes we’re making so they would understand and appreciate it.
But we went so fast. We went way too fast for the stakeholders and they weren’t ready for it. Those stakeholders include customers, board members, employees of Penney’s, investors. Nobody really understood what we were trying to do other than me and a handful of people.
ADI IGNATIUS: That resistance to change among employees is probably pretty typical, right? I mean, every institution that’s survived for a while, the employees think we have special sauce. We approach things in a certain way. If an outsider comes in, even if they have great ideas, the initial reaction at least is going to be, wait a minute, this person doesn’t get the special way we do things. I mean, this is not novel, and were you not coached to expect that or did you just think, look, I feel this so strongly, it worked at Apple, we’re going to do this?
RON JOHNSON: I don’t think I’m an arrogant person, but I was clearly situationally arrogant. I had had 25 years of uninterrupted success at Target, at Apple, and I went in there thinking that I understood how to reinvent the department store. Nobody on the board challenged me to say that, “These people are going to be resistant. You’ve got to navigate this.” This is a turnaround.
Everything I’d done before was a startup – especially at Apple. And so I could have had better coaching, but I think they expected me to know that. But I think the board was just intoxicated with the idea that the Apple guy had left Apple, which was the highest performing store in the world, to come to Penney’s. And they bought into the vision and figured I knew how to make that work. But I was honestly naive.
I’ll give you an example. Safra Catz, who’s a good friend of mine, she’s president of Oracle. After I went through that tough year, I went and chatted with Safra one day and she said, “Well, of the leadership team, how many people did you keep of the Penney’s team?” And I said, “All of them.” She goes, “All of them?” I said, “Yeah, I filled some open positions with people I knew, but I figured they’re experienced. I wanted to have their history.” She said, “Ron, do you know at Oracle, we don’t keep a single person from the company we hire.”
ADI IGNATIUS: Wow.
RON JOHNSON: “We learned at Oracle all these acquisitions through the years, PeopleSoft, whoever, that all it takes is one passive aggressive leader who the culture respects, and they are going to derail your transformation.” And she said, “No wonder it failed. You kept the entire team and they didn’t want to change.” I don’t know if she’s right, but that’s an example of where with time or the right guidance, the first thing I wrote it down and said, “Okay, how do I build a team that can execute a change of this magnitude?”
ADI IGNATIUS: What would your advice be for first time CEOs, particularly who are in a transformation setting beyond change out the leadership team maybe?
RON JOHNSON: Number one, don’t be in a hurry. Take a period of time, six months to a year, get to know everybody, talk to everybody, ask them, “What are the issues? What do you think? What would help us win?” I would go on a listening tour like some of the great CEOs do, because you can’t afford to start a transformation in the wrong direction. Every journey begins with a first step, but you’ve got to know where you’re headed, but those steps are really critical, those first ones. So the number one thing I do is get to know your team, make sure the team that you retain is bought into change. And then put together the right team before you launch.
But I really think you’ve got to go slow to go fast. And that’s the lesson I learned. I went fast and went slow. When I was at Apple in 2002, our sales went down 38% that year. Our stock was trading at cash value. We had to make a huge change in our processor roadmap, our operating system, to get to the other side. Well, we all understood that.
When I went to Penney’s, I said, “When we pull off the promotions, our sales are going to drop at least 15%.” This is a company that 99% of the revenue comes from promotions. It’d be amazing if we… Well, our sales dropped 20%. It was more than we anticipated, but from my perspective, it’s 5% off. And the customers who kept buying the 80%, the NPS was through the roof. They loved it. Every day is a great day to shop. The stores are clean. The presentation’s better. The employees liked it.
But the board and the employees didn’t understand why after a hundred years would you basically fire 20% of your customer base? Because that’s what happened when the coupon people didn’t come in. But to get to a new customer, you had to give up some of the old to then have a chance to earn new customers. And we were trying to get to a younger customer. The Penney’s customer was 55 to 65. How do we get young families to shop at Penney’s again?
So we built a store for them. But again, because no one really understood these issues like missing your sales plan by 5% became a huge issue for the board and for investors because they didn’t really understand why you would let that happen.
ADI IGNATIUS: I think you wrote that you needed more humility at JCPenney. What would humility actually look like in a CEO’s calendar, whether it’s more time in stores, more customer research, more dissenters in the room, slower rollout. What would humility have meant in that?
RON JOHNSON: I think listening. Listening. Listening to customers, listening to employees, back to listening tour, make sure in meetings you’re not presenting your ideas, you’re asking questions. It’s really taking the time to listen carefully. The best leaders are great listeners, and then they communicate.
Steve asked such great questions. Steve spent all his time getting to know people, talking to them. He wasn’t saying, “Here’s what we’re going to do. Here’s my vision,” blah, blah, blah. With Steve, the vision emerged through conversation with people that he found very smart and good to engage with.
And here’s what I think one of the big lessons is, is you’ve got to mix people together who are having a conversation that come from very different personal geographies or personal backgrounds. Steve and I were a perfect match. I was from an analog world. I didn’t own a computer. I didn’t have an email. Steve was inventing all of the digital technologies we were going to use, but the two of us together are what made our solutions great because I could represent the customer we wanted to get, and Steve could represent the customer we have. But Steve was willing to listen. He wasn’t saying, “No, you’re not smart enough. You don’t understand.” He valued the perspective that I brought coming from an analog world, and that was the right mix.
So I think part of the thing you have to do is you’ve got to get the right people in the room. You can’t have a conversation like an echo chamber amongst people of all the same background and all the same experiences because they’ll just tell you what you already know.
ADI IGNATIUS: So Steve Job would say, “Surround yourself with A players, but they should not be clones of yourself,” is really what you’re saying.
RON JOHNSON: They’re not clones at all. They’re very different than that. I had a windows designer, a guy who came out of Bloomingdale’s. Steve loved to talk to Mike, because he was a creative from a different perspective, and he learned from Mike, but they were very different people in every which way. So Steve was really curious about people and he liked lots of different types of people. He told me, “Ron, the number one thing you should hire for, find interesting people.” He said, “Because they’re curious, and they will always bring you new ideas. Find interesting people.”
ADI IGNATIUS: So you’ve spent your career maintaining that people want to do significant things. So after Target, Apple, JCPenney, and others, what does significant mean to you now?
RON JOHNSON: Well, significant to me is doing something that is very simple, but that matters, that has meaning, but significance is a individual thing. We all find meaning different. Everything I did, I love to do things that improve people’s lives. I just got excited doing that. I brought design to Target. I thought everyone deserved good design, design for all. That was something that mattered to me.
When I took over the kids area at Target, I just knew that kids grew out of clothes so fast. What if we standardize their sizing and instead of having a four and a five and a six, so customer has to buy four, the next time buy a five, let’s just make four or five and let them grow into it. That was trying to improve the life of someone. We went to the Apple Store, we created a store that devoted all this energy, half the store to people, once they bought, to come in and just get free help, attend a class, go to a personal training session, belly up to the Genius Bar and get help.
It was all about improving someone’s life. And so that to me is what’s significant. How do you do something that can improve someone’s life?
ADI IGNATIUS: The book ends with you advising, I suppose, yourself and others, readers, to choose kindness, which is a great sentiment, but I’m wondering, is it addressed in some way to people who have authority and are clearly not choosing kindness? I mean, is this a response or simply an ideal?
RON JOHNSON: I grew up in Minneapolis, Minnesota nice. I grew up in a family that taught me to choose kindness, and my whole life I’ve tried to choose kindness. And the reason if people have wanted to work for me, the reason Steve hired me is not just my retail, it’s who I was as a person. The Apple Stores are a reflection of my upbringing, the neighborhood I grew up in, it’s a place to belong.
And I really believe that most of us are way too hard on ourselves. What everyone needs is a chance for someone to have their back and encourage them, and there’s a huge value in that. And so I really believe that kindness is one of the few choices we make in the world. Kindness is a choice. How do you think about every day, who’s the person in front of you who you’re interacting with, how do I enable them to be their best? How do I interact in a way that lifts their spirits, that boosts their self-esteem, that allows them to be their best self? And that’s what kindness does. I think it could be practiced more frequently, especially in business.
ADI IGNATIUS: Ron, I appreciate that, and thank you very much for being on IdeaCast.
RON JOHNSON: My pleasure. Nice to see you, Adi.
ADI IGNATIUS: That was Ron Johnson, former CEO of JCPenney, and the Apple executive behind the Apple Store. He’s author of the new book, Shop Different: How Retail Revealed Apple’s Genius.
Be sure to come back to the feed on Thursday for the third in our AI series, How AI is Changing Innovation with Cisco Chief Product Officer Jeetu Patel.
If you found this episode helpful, share it with a colleague and be sure to subscribe and rate IdeaCast in Apple Podcasts, Spotify, or wherever you listen. If you want to help leaders move the world forward, please consider subscribing to Harvard Business Review. You’ll get access to the HBR mobile app, the weekly exclusive insider newsletter, and unlimited access to HBR online. Just head to hbr.org/subscribe.
Thanks to senior producer Mary Dooe and senior production editor, Kristin Murphy Romano. And thanks to you for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Adi Ignatius.
