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MINNEAPOLIS — Target Corp. has hit a “rough patch” and needs to take aggressive steps to change the way it does business.
Target Corp. has hit a “rough patch” and needs to take aggressive steps to change the way it does business.
So acknowledged Target chief marketing officer Jeff Jones in a candid post on the social networking site LinkedIn. Jones said the company is “not standing still,” even as it actively searches for a new chief executive officer to replace Gregg Steinhafel, who stepped down in early May.
"To say that the last five months at Target have been difficult is an extraordinary understatement," Jones wrote.
"The data breach we suffered rocked consumer confidence and ignited a nationwide discussion about phishing, cybersecurity and the realities of living in today’s data-enabled world. Thanks in large part to social media, it looks like this will have been one of the most covered business crises in American history.
"And just last week our CEO stepped down after six years in the position and 35 years at Target. His departure has already spawned over 6,000 articles wondering and speculating about what happened."
Target’s board of directors announced on May 5 that the company needed new leadership, and that Steinhafel was stepping down from his positions as chairman, president and CEO. The move came less than a week after Target named a new chief information officer, and announced a series of technology enhancements designed to prevent future data breaches.
Target chief financial officer John Mulligan was named interim president and CEO. Roxanne Austin, a member of Target’s board, was appointed interim non-executive chair of the board. Both will serve in those roles until permanent replacements are found. And Steinhafel will serve the company in an advisory capacity during the transition.
"It has been an honor and privilege to lead this great brand and work alongside what I believe is the best team in retail," Steinhafel said in his resignation letter. "Over my nearly 35-year career at Target, we have earned the trust and loyalty of millions of guests by delivering a unique value-driven shopping experience.
"The last several months have tested Target in unprecedented ways; from the beginning, I have been committed to ensuring that Target emerges from the data breach a better company, more focused than ever on delivering for our guests."
In its own statement, Target’s board noted that Steinhafel led the response to the data breach.
"He held himself personally accountable and pledged that Target would emerge a better company. We are grateful to him for his tireless leadership and will always consider him a member of the Target family,” the board said.
The board also praised Steinhafel for leading the company through such challenges as "navigating the financial recession, reacting to challenges with Target’s expansion into Canada, and successfully defending the company through a high-profile proxy battle."
What prompted Jones to comment on the situation was a blog post, attributed to an anonymous Target employee, that complained about the company’s corporate culture and argued that its leadership needed a new vision.
"If Target doesn’t make a serious change in their leadership and culture, it will end up being a Kmart, a Sears or, even worse, a Circuit City," the employee wrote.
While he acknowledged the challenges the company faces, Jones noted that Target has many assets and will do what it takes to recover.
"The culture of Target is an enormous strength and might be our current Achilles heel," Jones wrote. "In the coming days and weeks we will embrace the critiques of Target — whether it’s from outsiders or our own team — like an athletics team puts the negative press on the wall in the locker room.
"We are accelerating our innovation pipeline. We are simplifying how decisions are made. We are exploding cultural symbols of bad behavior. We are searching for a new CEO … but in the meantime we are not standing still. Yes, the truth hurts. But it will also set you free. Our job now is to create a new truth, and that is exactly what we’re doing.”
Interim CEO Mulligan made similar points in published interviews following his appointment.
"Interim here does not mean idle," he told the Reuters news agency. "We are going to make progress and continue to make progress. This is about driving our business forward and not just maintaining it."
