Terry Lundgren on Ownership, Change, and Retail Leadership

Episode Summary

Terry Lundgren, the former chairman and CEO of Macy’s, Inc. and former CEO of Neiman Marcus, grew up in Long Beach, California, and was the only one of his siblings to go to college. He chose the University of Arizona because his friends were going to college, enjoyed the freedom so much that his grades slid, and was cut from the basketball team after 10 days of practice. After his first year, his father, who worked in a factory assembling speakers and sold real estate at night and on weekends, told him the family could no longer pay. When Terry protested that his father was ruining his life, his father replied that it was Terry’s choice. Terry took ownership. He talked his way into a job cracking oysters and peeling shrimp at a fish restaurant, pleading for a chance after a flat interview, and three years later he was managing the restaurant while working full time and earning straight A’s. Today the Terry J. Lundgren Center for Retailing at the University of Arizona bears his name, and he co-chairs the university’s fundraising campaign.

At 29, he became a store manager at South Coast Plaza in Orange County, responsible for 400 people, most of them older than he was, and he learned to ask what each of them needed to succeed. He credits his rise to doing more than the job description asked: bloom where you’re planted, he says, and do the job better than anyone has done it before. When he became CEO of Neiman Marcus at 37, as he recalls, following Richard Marcus, he sought out the company’s legendary former leader, Stanley Marcus, who initially brushed him off. After months of building the relationship, Terry asked Stanley to endorse his strategy in front of 1,000 employees. Stanley did, and Terry says the strategy took hold in about four months rather than the two years he expected, followed by five straight years of strong performance.

Terry tells Adam that leadership comes down to assessing the people around you and managing them situationally, and that you don’t need the best player at every position to build the best team. He candidly describes two senior hires who looked great on paper but were wrong for the culture, and how he dealt with each. He explains why leaders must make it safe to deliver bad news, why indecision is worse than an informed call, and why a sign in his office read, “There’s no limit to what we can accomplish as long as no one cares who gets the credit.” He recalls using the 2009 financial crisis as the moment to consolidate divisions and restructure the company, and he describes Macy’s early, money-losing commitment to e-commerce, which he says made it one of the country’s largest online retailers by the time he retired. He also explains why he announced meaningful changes every February, even in strong years: what worked last year will only deliver last year’s results.

What You’ll Learn

Take ownership of your own life, Terry says: when his father stopped paying his college tuition, Terry went from mediocre grades to straight A’s while working full time, and learned he performed best with his back to the wall.

Attitude is often what gets you hired, as Terry learned when an oyster-cracking job he was about to lose became his the moment he showed the manager how badly he wanted it.

Bloom where you’re planted, Terry says: do your assigned job better than anyone has done it before and look for a better way to do it, because that is how people notice you.

Sometimes you have the right message but aren’t the right messenger, as Terry learned when Stanley Marcus’s endorsement got Neiman Marcus employees behind his strategy in months instead of years.

Make it safe for people to bring you bad news, then decide, Terry says, because the CEO is often the last to know and indecision is worse than an informed call.

Keep changing even when business is strong, Terry says, because competitors catch up and what worked last year will only deliver last year’s results.

About Terry Lundgren

Terry Lundgren is the former chairman and CEO of Macy’s, Inc., the parent company of Macy’s and Bloomingdale’s. He became CEO of the company, then known as Federated Department Stores, in 2003, led it through its merger with May Department Stores and its renaming as Macy’s, Inc., and served as CEO until 2017 and executive chairman until his retirement in 2018. He earlier served as chairman and CEO of Neiman Marcus after starting his career at Federated’s Bullock’s division. He sits on the board of Procter & Gamble, has chaired the National Retail Federation, and was named an executive in residence at Columbia Business School in 2017.

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