In 2011, American retailer JCPenney hired Ron Johnson as its new CEO. Johnson was the celebrated architect of Apple’s wildly successful retail stores, and the hope was that he would bring the same sleek, modern magic to the century-old department store. Within 17 months, he was fired.
So, what happened?
Johnson arrived with a bold vision to completely remake JCPenney. For decades, JCPenney had operated on a “high-low” pricing model, marking items with a high initial price and then offering a constant stream of sales, promotions, and coupons that its loyal customers had come to expect. Johnson saw this as deceptive and inefficient.
His new strategy eliminated the endless cycle of discounts in favor of “Everyday Low Prices”. The goal was to offer transparent, honest value without the games.
That sounds pretty good, doesn’t it? Unfortunately, Johnson fundamentally misunderstood the company’s DNA.
For the JCPenney shopper, the brand experience wasn’t just about the final price paid. It was about the psychological thrill of the hunt. Customers loved the sense of “winning” by stacking coupons and catching a great sale. By removing the discounts, Johnson removed a key source of perceived value and delight. Customers, confused and alienated by the new approach, fled in droves.
Sales plummeted by over 20%, the company lost $163 million in the first quarter, and the stock price plunged. Johnson was fired, and JCPenney quickly reinstated its old, familiar pricing model.
Understanding Your Brand’s DNA
In the 7 D’s Business Alignment Framework, DNA represents your business’s core identity–its founding mission, values, and purpose. It’s the answer to “Why does this company exist, beyond making money?” When a business is young, its DNA is usually front-and-center (after all, it’s born from a founder’s vision).
But as time goes on, that DNA can get diluted or obscured, especially under growth pressures or leadership changes. Aligning with your DNA means ensuring that every strategy, hire, and product resonates with your core purpose and values. It’s about authenticity. As Simon Sinek says, “Start with Why.”
Your DNA is your “Why.” If everything you do stems from that, you create a coherent brand and culture that people trust.
Every Dimension of a Business Must Work in Harmony
Now you might think that Johnson had the right idea. JCPenney’s lived purpose was to “serve customers to their full satisfaction.” Transparent pricing could align with that purpose.
But there’s more than one dimension to a business, and they all must be aligned. If Johnson had run a pilot program (Design) he could have tracked metrics like traffic and customer satisfaction (Data), which might have helped him understand that value-seeking families loved the feeling of finding a great deal (Delight). “Fair & Square” killed that feeling by scrapping coupons and big markdowns, so the shopping experience no longer matched what customers expected.
Ultimately, John wanted to alter the company’s Destiny. He wanted to serve a more upscale clientele. That’s not an impossible shift to make, but it’s critical to be aligned in every area during the transition.
Symptoms of DNA Misalignment
How can you tell if your company’s DNA is out of alignment? Here are a few red flags:
- Inconsistent Messaging. Your marketing says one thing, your sales team says another. Employees themselves aren’t sure what the company stands for anymore, leading to confusion or mixed signals externally. The “Fair and Square” campaign is a prime example. The new pricing system was advertised as simple but was confusing in practice, and the message became completely inconsistent when the company, seeing poor results, began reintroducing the word “sale” in its marketing while trying to maintain the new pricing in stores.
- Culture Drift. The original values on the wall have become mere slogans. You notice behaviors or decisions that clash with your stated principles (e.g., saying “customer first” but cutting corners on customer service). The culture of JCPenney was built for decades around the value of the “deal.” When Johnson’s new strategy eliminated this core experience, it represented a massive drift from the company’s established principles. His attitude that customers needed to be “educated” and weaned off coupons like a “drug” showed a clash with the existing customer-centric culture.
- Identity Crises. Chasing trends or copying competitors has made your brand identity murky. JCPenney’s attempt to impose an Apple-like DNA of sleek simplicity onto its value-driven brand is a classic example. Johnson’s strategy was aimed at attracting a more upscale shopper who might normally frequent Target or Macy’s, but in doing so, he alienated the core customer base that had kept the company afloat for decades.
- Founder/Team Disconnect: In a founder-led business, the founder feels “this isn’t what I envisioned,” or longtime team members say, “it doesn’t feel like us anymore.” While not founder-led at the time, the JCPenney overhaul created a profound disconnect with its most established stakeholders. Longtime, loyal customers felt the company no longer valued them, and employees faced a daily barrage of confused shoppers asking what had happened to the coupons and sales they loved, reinforcing the feeling that “this isn’t JCPenney anymore.”
Consequences of Ignoring DNA
If DNA misalignment persists, the consequences can be dire.
- Morale drops as employees lose the sense of meaning in their work.
- Customers lose trust, sensing a lack of authenticity and may jump to brands that do stand for something clear.
- Internally, decision-making gets erratic because there’s no guiding star.
The JCPenney case illustrates that a company’s DNA is co-created with its customers.
The established “game” of high-low pricing was an implicit part of the brand’s identity. While the new “Fair and Square” prices were often comparable to the old sale prices, the psychological value was lost. Customers derive satisfaction not just from the final price, but from the perceived discount.
A shirt marked down from $50 to $25 feels more valuable than a shirt that is simply priced at $25. By removing the “sale,” Johnson removed a core feature of the brand’s value proposition. This demonstrates that DNA misalignment can occur when a leader correctly identifies an operational inefficiency (the cost of constant promotions) but fails to recognize that the “inefficiency” is actually a beloved part of the brand’s identity.
In the long run, companies that abandon their core values can face reputational crises. In the mid-2000s, Starbucks expanded so aggressively and introduced so many efficiency measures that it “watered down” the Starbucks experience.
Howard Schultz observed stores that “no longer have the soul of the past“. Profits suffered and Starbucks had to close hundreds of stores.
The cure? Schultz re-focused the company on its original coffeehouse values. He closed every U.S. store one day in 2008 to retrain baristas on making a perfect espresso, signaling a return to core quality. This shows a successful DNA re-alignment.
How to Achieve Brand DNA Alignment
Fixing a DNA misalignment starts at the top. It requires some soul-searching:
- What do we really stand for?
- What mission, beyond profit, drives us?
Engage your leadership team (and if possible, your broader team) in revisiting your mission statement and core values. Make sure they’re not just pretty words. They should reflect your true beliefs.
Had JCPenney’s leadership paused to reaffirm their DNA, they would have acknowledged that “providing value through exciting deals” was a non-negotiable part of their identity. From there, practical changes could have flowed. Instead of eliminating sales, they could have sought to simplify them or make them more rewarding, preserving the core experience while improving efficiency.
Realigning DNA often means making hard choices to say no to opportunities that conflict with your core identity. But those choices liberate you to double down on what makes you truly special.
A Case Study in Brand DNA Done Right
One company famous for staying true to its DNA is Patagonia. Patagonia’s core mission is environmental stewardship. “We’re in business to save our home planet.” Every decision they make filters through that purpose.
When Patagonia noticed that pitons (metal spikes for rock climbing) were damaging rock faces, they stunned the industry by stopping production of their best-selling product and pivoting to safer alternatives. That was a DNA-driven decision: they put the environment over short-term profit. It paid off in customer loyalty and brand integrity.
Even their marketing reflects their DNA. On Black Friday 2011, Patagonia ran a bold ad: “Don’t Buy This Jacket,” urging consumers to buy less and recycle, even if it meant less sales for them.
And customers loved them for it. Today Patagonia is a billion-dollar company with a fanatically loyal customer base, precisely because they never lost their soul.
Quick Wins to Strengthen DNA Alignment
You might be thinking, “This sounds abstract. What can we do this week to reconnect with our DNA?”
Here are a couple of quick, practical steps:
- The Mission Post-it Challenge. Write your company’s mission (or core purpose) on a sticky note in plain language. If you struggle to articulate it, that’s a sign to spend time defining it! Stick it on your monitor or wall. Encourage your team to do the same. For one week, before making any significant decision or when you start your day, glance at that mission and ask: “Is what I’m about to do advancing this mission?” This simple habit strengthens your mission-minded thinking muscles.
- Team Meeting Storytime. At your next staff meeting, devote 10 minutes to sharing “origin stories” or “values stories.” For example, ask: “Who has a story that exemplifies one of our core values?” It could be how a team member went above and beyond for a client (reflecting your value of service), or how someone admitted a mistake openly (reflecting integrity). Sharing real stories reinforces what your values mean in action. It also reconnects everyone to why you do what you do, which boosts pride and belonging (key ingredients of DNA alignment).
By focusing on your company’s DNA, you build a strong foundation of authenticity. Employees gain clarity (“this is what we’re about”) and motivation (“I’m part of something meaningful”), and customers sense the integrity and consistency. Like a human body’s DNA, your corporate DNA should inform every cell of your business. Nurture it, align with it, and you’ll create a company culture that can weather storms without losing its essence–a beautiful company from the inside out.
