Did you happen to shop at Target over the Christmas holidays? I went to one of their stores a few weeks ago to purchase an item and was pleasantly surprised by a redesigned interior--everything from attractive gray wood flooring; neatly stocked shelves; deliberately locating women's apparel closer to the front entrance, but especially the spotlights and circular lighting making the Big Box store glimmer with a new look.
And that's one of the messages Target is wanting to send to the marketplace.
At least some of the physical components of a turnaround by Target's CEO Brian Cornell and the leadership team were right before my very eyes.
|(C) Target Corporation|
In 2017, up against giants Walmart ($514 billion revenue) and Amazon ($232 billion revenue), Target's board and top management bet $7 billion that more affluent shoppers still want an in-store experience provided the environment and customer service were inviting enough. As a part of recreating itself Target ($75 billion revenue) raised wages for a large number of its 320,000 employees as "guest" and "team member" satisfaction are one and the same.
Developing a corporate strategy and implementing it close to the original plan is something to behold. Few leaders pull that off as looking ahead and seeing short is hard to do.
The leadership agenda
Reversing direction requires clear priorities. What made up the centerpieces of Mr. Cornell's leadership agenda? *
o Spruced-up stores. Better lighting and longer sightlines. By 2020 almost 1,000 stores (out of 1,800) will have the new look.
o Integrated e-sales. An upgrade to store locations makes it possible to pick up online orders near your home. About 80% of Target's e-commerce sales involve the stores.
o Speedier delivery. Rather than building capacity from scratch, which would have taken a lot of time, Target bought Shipt and Grand Junction to allow for faster deliveries.
o Fresher brands. New and more profitable store brands, 20 at last count, earn higher margins and appeal to younger households.
o Selective tech. The goal with tech was practical and immediate payoff so experimentation was pushed aside.
Is yours a strategic mind?
Long before the first piece of flooring was laid, or lighting hung, someone had to have an idea as to what a refurbishing could look like, and how that investment might change Target's direction.
How else would a leader be able to communicate the main goal?
Author Henry Mintzberg once observed that strategic thinking was "seeing." The strategic mind sees ahead, of that, there's no doubt. The greater question is how do they see ahead?
Here are five ways of strategic thinking that Dr. Mintzberg uses to qualify a leader as having a strategic mind:
1. You cannot see ahead unless you can see behind. Any good vision of the future has to be rooted in the past.
2. Strategic thinkers have to find the gem of an idea that changes their organization. That comes from a lot of digging which is where gems are found. There's no big picture ready for seeing; each strategist has to construct his or her own.
3. Strategic thinkers see differently from other people. They pick out the precious gems that others miss. They challenge conventional wisdom--the recipe, the traditional strategy--and thereby distinguish their businesses.
4. Creative ideas have to be placed into context, to be seen in a world that is to unfold. Seeing beyond constructs the future--it invents a world that would not otherwise be.
5. For a thinker to deserve the label "strategic," he or she must be able to see it through, (something only about 10% of leaders appear able to do according to a global study by PwC).
What's held in common
If there's one leadership tactic that improves a strategy's chance of success it's this:
The more an organization shares in common the less likely personal interests will prevail. The less an organization shares in common the more likely personal interests will prevail.
An absence of common understanding can cause a corporate-wide initiative to get off to a false start. Therefore it's well worth the time and effort to engage employees, customers, and vendors early on. Workforce studies consistently show that individuals at all levels rarely understand the purpose and strategy they are expected to fulfill.
You can believe there were a lot of experience-based judgments to determine the direction that Target has chosen. That said, no one can know everything from the beginning. The real learning is in the doing, now underway.
Is the strategy working?
Like most large enterprises, some things work and others don't.
Target reported sluggish holiday sales with toys and electronics a disappointment. "We faced challenges throughout November and December in key seasonal merchandise categories and our holiday sales did not meet our expectations," Chief Executive Brian Cornell said.
However, Simeon Gutman, a retail analyst at Morgan Stanely, said: "Target's ability to manage the business well through weaker sales is the silver lining."
*Published in FORTUNE Magazine, September 2019.
© Bredholt & Co.