Apple Retail crap storm

Linky….

One of the “back of the mind” concerns going forward after the passing of Steve Jobs was how the leadership structure at Apple would change over time.  For the most part, the company remained in good hands with a deep bench due to the longetivity that the executives had with the company.

 

When Ron Johnson, the former Senior Vice President of Retail, left to become to CEO of J.C. Penney in November 2011, a significant hole in the solid executive ranks was created which needed to be filled.  The position remained vacant for several months which signaled that finding a replacement to fill Johnson’s shoes, was likely proving to be a challenge (more so when someone internally was not selected).

 

Apple eventually recruited and hired John Browett in January 2012.  This would serve to be CEO Tim Cook’s first major executive hire.  Browett last served as CEO of Dixons Retail, a United Kingdom electronics chain.  Apple went the external route because they wanted someone who had experience running a chain outside the U.S. because one of the objectives was to enhance Apple’s retail presence internationally.  Immediately after Apple made the announcement public, the forums at Apple related web sites lit up with some not so very glowing feedback about the way Browett ran his retail operations and how the customer experience was literally non-existent at Dixons.

 

Retail as I’ve mentioned elsewhere on this blog, is a strange beast.  The bottom line is obviously to maximize profits.  Apple Store’s on the other hand were created in order to highlight the products, to allow customers to try them out, to allow customers to ask questions, and to feel like they weren’t being pressured to make a purchase decision.  The stores in other words were created in order to provide a certain level of user experience which Apple entirely had control over because at the time, the other retailers which Apple partnered with weren’t always entirely on the same page.  By that, we’re talking about systems which were heavily locked down, often times ill-managed to where you could not test it out, or you had retail associates who had their own personal agendas/biases and would therefore, give out bad advice and recommendations.

Over the years though, Apple’s retail operations has become a highly profitable one while still attempting to balance the need to cater to the entire customer experience.  Thus, anyone who oversees this entire operations, has to understand these core reasons as to why the Apple Store has been highly successful to begin with.  Maximizing profits by nickel and diming worker hours, benefits, or head counts, is not what you want to occur at an Apple Store.  Because if that happens, it ends up becoming just like any other retailer, where outwardly, they give the appearance of satiating the customer, while the reality is for the store leadership to carry out orders to meet corporate dictated profit objectives without really giving a damn about the front-line workers who are key and critical to the overall success of the operations.  I’m not saying that all corporate goals are bad; Apple can’t just run their retail operations entirely on goodwill when many of them are located on high rent/lease properties – there has to be some return on that investment.  Likewise in Apple’s case, some of that return should not be measured solely on profit per square foot or employee (which they do have one of the highest out of all retailers).  One of the key things Apple is known for is their customer service.  It isn’t perfect by any stretch but having this as embedded as part of its corporate DNA is one of the intangible reasons that many end up becoming captive customers for the long haul.

The fact that Apple PR had to make a statement addressing some of the rumors about layoffs or cuts to hours (and stating that it was a mistake), does not speak well as to what went down internally.  This also sets off red flags for me as long time shareholder.  Why?  Because it starts at the corporate level; you can start off with a solid bench but once it starts becoming infiltrated with clowns (the ones who got to where they are by asskissing their way up the ladder and stabbing who knows how many in the back for the purpose of making a name for themselves), then that cancer will eventually begin weeding its way through the entire company.  It takes awhile but the end result is always the same where the mighty ends up falling.  Apple already went through that once and almost paid the ultimate price where if it weren’t for a series of events that occurred in 1996, would likely be a footnote today.

To date, I’ve been nothing but impressed by Tim Cook as CEO in terms of the companies continued operational prowess.  However, Browett is his first major executive hire and Cook therefore, does bear the responsibility and accountability for those that the selects to run Apple’s key business segments.  The problem with operational minded people though is that sometimes, it is all too much about efficiency and productivity.  When it comes to dealing with supply chain, logistics, and just the overall numbers involved, these sort of people are really great.    That mindset however needs to be balanced when you are dealing with actual people.  From what I can gather, Browett is also an operational type of person like Cook.  Thus I can understand why from the point of view, it seemed like a natural fit.  To Cook’s credit, he has also shown a remarkable “people person” side of him where he does seem genuinely concerned when it comes to such issues.  As CEO though, he obviously cannot be the babysitter when it comes to that angle – that’s what the rest of the management team is tasked with.

I cannot say how Browett is on that front though (on whether he is an all by the numbers sort of person or balanced).  If  Browett intrinsically does not subscribe to the Apple way in terms of the entire customer experience (but only talked the talk in order to get hired) which means you can have store metrics in order to gauge employee productivity but ones that are tempered to basically weed out the good from the bad, my personal opinion is that he needs to be cut loose quickly and fast before any more damage is done.